Why aren’t women investing as much as men?
Contrary to popular belief, there isn’t as significant a financial literacy gap as a confidence gap between men and women. The financial confidence gap of 60% has more with women not tapping into what they already know about money when making investment decisions. Women tend to be more conservative in investing, which prevents them from significantly building their financial fortress. It’s good to know as much information about your investments as possible. To feel that you must become an investment expert before fully participating in building wealth in the markets can often get in the way of women creating their financial fortune.
The difference between saving and investing:
Women might consider saving money in their savings accounts as investing. However, this might not be the reality. Saving is holding your money in a safe account for a temporary period, and investing is putting that money in investments to grow for an extended period in the hopes of becoming a significant if not primary income resource. With the meagre interest rates of savings accounts, money that goes into these accounts can only be considered ‘savings and not investment accounts.
Is time your friend or foe?
By taking advantage of compound interest, you can grow your investments significantly over time. On the other hand, keeping most of your money in a savings account can dramatically miss out on investment opportunities, especially as you get closer to retirement and have a shorter window to invest.
How can women break the confidence barrier and start investing?
A significant way to fix the confidence issue is to truly understand the worst outcome and how we might react to that. Do the potential benefits outweigh the potential costs? Working with a financial expert who can explain all the details of your investments can help you answer these questions and make educated decisions without the fear factor. If you can handle the worst possible outcome after understanding the return potential of an investment, you can consider taking the risk.
How can we gain this knowledge power? By having money conversations!
If you have questions about your investments, you should always ask your financial planner. There are no stupid questions when it comes to handling your money! If you are working with someone who makes you feel this way, you have permission to move on. As much as you might perceive your questions as silly or embarrassing, you are entitled to have a complete understanding of how your money is invested and managed. This builds the trust element between you and your advisor and helps you take advantage of better-investing decisions.
How can women build their money confidence to make investment decisions?
Get out of your comfort zone:
Talking and asking about money might be uncomfortable; however, they are vital for stepping out of your comfort zone and taking the reins on your finances. By asking questions and getting clarity on what you need to know, you can build your confidence, gain significant financial knowledge and better understand your economic opportunities.
Reach out to others:
You aren’t the only one who might be having some challenges with money! If you have friends or a community you feel comfortable with, encourage conversations about topics you want to know about that are financially based. Are you curious about whom to work with for investments? Do you have pressing questions you want to answer? You might be unaware that your social network might be working with great financial experts. By reaching out, you can broaden your perspective on financial topics and get timely advice. Expert insights may be beneficial if you have a very complex or specific financial question.
Outsource financial knowledge!
Working with a financial professional can significantly lift the weight off your shoulders when it comes to investing. Even if you feel good about your money matters, working with a financial expert with years of experience might help you to take advantage and identify new financial opportunities. They may also be able to validate your assumptions about your financial circumstances and put your mind at ease! A certified financial planner is an excellent option if you want to have greater peace of mind around your investments. As professionals, they can give you a written plan that leverages all the financial opportunities available based on your specific situation.
Protect yourself from risk:
Do you have a financial plan if you lose your job, spouse or health? Having investments that become a source of income can protect you from these life risks you might not be expecting. If you want to start investing planning, book our complimentary 30-minute consultation session with our team!