In the latest in our Finances after 50 series, we talk to Sumita Paul, a financial advisor whose business is focused on guiding women over the age of 50 on issues of investment, financial planning and estate management.
I grew up in a household where there was enough, but not plenty. My father was very strict in having a budget, and my earliest memories are of him, every evening, writing in his diary all the expenses for the day, and balancing what was spent. So I grew up knowing that yes, there werre some luxuries we could afford, but you had to be careful.
India is a land of extremes. You see opulence at one end, and utter poverty too – and it’s all right around you, you don’t have to go very far. My circle of friends at school ranged from people who literally lived in shacks to people who lived in houses with marble floors and chandeliers. My parents were, I guess you could say, middle class. They were quite entrepreneurial and willing to do things that weren’t the norm – they set up a school. I think we would have qualified as asset rich but cash poor.
The share market was something I became hugely interested in at around the age of 15. This was in the 80s. The major share markets were in Bombay and Delhi, but a new one opened in Kochi in the state of Kerala, where I lived. In those days there was a central pit where everyone was with their pink and green slips, shouting out share prices, and they were blackboards with share prices written on them. I remember standing on the balcony and looking down at the pit, and there was so much energy.
That must have been just before the ’87 crash, a catastrophe in India. Fortunes changed for lots and lots of people. And that got reinforced when I started talking to people here in New Zealand, where there was the same experience. That sowed some seeds for me. I was asking, why did people end up losing so much? How did they not see what was happening? Trying to dig deeper and deeper to understand how, yes, when it comes to investment there are facts and numbers and risk profiles and calculations and models. However, a lot of it is driven by human emotion. And what happened was as basic as fear. Fear and greed.
I came to New Zealand at the age of 23 and... egalitarian is the word that comes to mind. There are wealthy people here and there is poverty, but the poverty I saw when I first came was nothing like what you see in India. And with the wealthy people here, again, there is a humility. It’s not as ostentatious as some of the things you see in India.
In India you always call your superior ‘sir’ or ‘madam’. It was a culture shock to be here and to be in the kitchen at work making a coffee, and the CEO comes in, and she might be making a coffee beside you, and you have a chat. That was a huge, huge shift. And it was just inspiring and refreshing actually.
My first job here, at age 23, 24, was working for AMP. I was talking about their insurance products and what they were offering, but I could not understand them. I could understand the value of investing and saving for the future, but... why are people spending so much money on something that may not even happen? That's a lot of money wasted! Dead money! It just goes to show my immaturity. It was only when I had my first child, my son, in 2001 that I started to understand. You’re thinking oh my god, you're responsible for this little person, and what would happen if you weren’t around?
I met my husband at business school in India. We had a very similar view of the world, similar goals, and we understood what drove each other. My husband has also had a career in finance, and he's an engineer as well. When I was retraining as a financial advisor, while also working fulltime, he would take the children on a picnic, if I had assignments at the weekend. And when he needed to travel, I would take care of all the children’s needs. I have been touched by fortune in my choice of partner.
As a financial advisor I meet couples where the two people’s own personal money stories can be very different. What they want in life, their goals, their priorities – all that is similar. When it comes to what kind of lifestyle they want, the things they want to do together – they’re on the same page. But when it comes to the decision of, 'OK, how do we get there?' - that is where you see very, very different personalities. Your personal money beliefs, your risk tolerance, the way you were brought up, all those things come into play.
Women were traditionally the CFOs of households – they managed the bills, they managed the expenses, they made sure the kids' needs were met, the school fees were paid, everything was done. Then they would put money in a savings account. But when it came to the step beyond that – investment – there would be a hesitation, or a reliance on someone else to make that call. Through my career I saw that gap and it played on my mind, so when I set up my own practice, I made women my focus.
There's a lot of financial information out there now from influencers, social media, all those things, and it’s heartening to see. But a lot of it is targeted at young women who are starting their lives. I could see with my friends and my acquaintances that, because of how gender roles were defined when we grew up in the 70s and 80s, there was still a hesitation around investment.
After the age of 45 or 50, you see a lot of changes happening in women’s lives. They've had a 20- or 30-year career and been there, done that. And some of my clients are in that boat where they say, I'd like to do something different, but I’m not sure if I can chuck my day job. Or maybe your children have grown up and it’s a bit of a vacuum. So you see people in this age group start focusing on themselves and what they want in life, and sometimes deciding to make changes. You see divorce happening, transitions in life. And all these things impact your finances. It’s all the more reason to have a clear understanding of where you're at, what you want, what you need to change to reach your goals, and to enjoy the next phase of your life.
We save our money for travel. When you come to a new country, the focus is to settle. My husband and I didn't come with lots of money, we had hardly anything, but we came with education and skills and the focus was always on career, doing a good job, saving money, giving it a shot. Now we have a bit more time. Our two children are independent adults. We’re not too hung up on the bach, the BMW, that kind of thing – we live within our means and our budgeting is for travel. We are doing our OE at the other end of life.
This interview has been edited for length and clarity.
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