How To Invest Like a Girl
LADIES 👀 Yeah, I’m lookin’ at you. I’m here to help you get started with investing. In fact, it’s one of the main reasons I founded Female in Finance, LLC in the first place.
No offense to my boys, but I personally believe the financial future is female. Could I be wrong? Yeah. But women are a market force as investors. However, there’s one thing holding them back when it comes to wealth building.
It’s fear.
Unfortunately, 41% of women have no plans to invest their cash, simply out of fear.
But, investing isn’t just for men in suits on Wall Street like Jordan Belfort, a total finance bro. It’s for women too, if not even more so.
Let’s talk about the gender wage gap for a second. Women have yet to earn more than 82% of the median earnings of their male counterparts. I could get into things like asking for raises and how some women are steered away from science, tech, and engineering jobs which are typically higher-paying, but I’m not sure that’s AS common anymore. I could be wrong though.
Additionally, the median salary is 18% higher than that of women, and due to COVID-19, women (especially women of color) faced disproportionately higher unemployment rates than men as well as wage penalties.
Some will argue that it’s solely because of the differences in career choices. However, when men and women with the same employment characteristics do similar jobs, women earn $0.98 for every dollar earned by an equivalent man. There’s no reason a woman with the same qualifications should earn 2% less for the exact same job. But they do.
So how can women narrow this gap and be more prepared for retirement? Investing 📈. But, “investing is scary”👻. It’s not, it just may seem that way if you don’t understand investing.
I do not want you to not invest because of fear. Period. And let me guess, your fear may be losing all of your hard earned money, or you feel you don’t know what you’re doing, or you’re afraid of making a mistake. I’m here to tell you this: Women are better investors than men.
In fact, women have outperformed men by 0.94% PER year.
What makes women better investors than men?
With investing, women are typically less confident at first. Over time, their investing confidence increases. So how do they outperform men? Women keep their emotions out of the game. They are more likely to stay the course and not change up their asset allocations as frequently as men.
Some men invest like it’s some sort of competitive sport. Women, buy their investments and hold for the long term, which sounds boring, but performs best.
I don’t say #investlikeagirl for no reason 💅🏼
There’s one main thing that makes women better investors.
It’s the same thing getting in the way of women getting started with investing in the first place. It’s fear. But what if a modest amount of fear is exactly what you need to become a successful investor? Would you feel more inclined to invest? I’d hope so. Use a little bit of that fear to your advantage.
While the stock market goes up and down, this drives more male investors to make impulsive decisions. Yet women are more undaunted when it comes to market fluctuations, and trade 41% less than men (according to Vanguard).
It's clear to me that women make great decisions when it comes to investing. And gentleman, I’m not saying you don’t. I’m just trying to level up my girls.
Ladies, if you can increase your risk appetite a little, and start investing in the stock market, I have no doubt that you too can accumulate an impressive amount of wealth for your retirement.
The price of being afraid to invest is greater than you think. The value of each dollar you save instead of invest, decreases each year by 2-3%, if not more due to inflation (This year is closer to 6.8%). That means, if you have $10,000 in a savings account, by next year, it’s now worth only $9,700, and the next year, $9,409. And the year after that, $9,126.
Okay LeAnDrA, bUt hOw dO I iNvEsT?
I’m so glad you asked, because as soon as you take action, you’ll drive the confidence within yourself to start taking ahold of your current finances and your future self.
The first step to getting started is to educate yourself. I’d recommend reading the book “I Will Teach You To Be Rich” by Ramit Sethi, and The Simple Path To Wealth by JL Collins.
If you want to educate yourself a step further, I’d recommend an investing course. I will be coming out with a course on the fundamentals of personal finance, as well as a course to learn step-by-step how to invest. Having both of these, will be your ticket to financial freedom.
In the meantime, I’d consider a roboadvisor like Betterment or Wealthfront. Both of these roboadvisors have low fees of only 0.25% and they will choose index funds for you based on your age and risk tolerance, all while diversifying your investments for you.
You can go to their sites, create a new account, and invest within less than 10 minutes. And when I say less than 10 minutes, I mean it.
If you need a little hand holding, feel free to sign up for a 1:1 zoom coaching call with me where we can share screens and I can show you exactly how to get started. You can sign up here.
Get out there and invest like a girl 💅🏼.
Cheers.
