It’s time to break the bias and knockdown stereotypes when it comes to investing. Having just celebrated International Women’s Day, what better time to discuss and highlight the different ways women are investing.
While the gender wage gap is still alive and well, women are gaining more financial independence than ever before! For many women who are single parents or the income earners in their households, this means taking control of their finances. However, on average, women are still earning less than men. In fact, for women aged 65 and older, their income is typically 25% lower than that of men. Furthermore, as men and women age, the gap widens to 44% by age 80.
Now, it is essential to understand that there are in fact differences between men and women when it comes to investing. Did you know that Australian women now make up to 45% of all new investors? According to a study by Openfolio in America, women lost 2.5% of their stock portfolio value in 2015, while men lost 3.8%. Even though women invest less in stock markets, they make better decisions with other studies suggesting that female investors earn a better return than men.
Investing can seem daunting, but it doesn’t have to be. There are plenty of ways women can start investing their money and watch it grow. Of course, this comes with the help of professional investors or automated programs specifically catered to their needs. It’s important to understand what you’re investing in, knowing the risk and remember this one simple thing, never stop educating yourself.
Invest wisely – all your investments should succeed, but you want to position yourself where the most success is guaranteed. The benefits of investing for women are many. Research has shown that women entrepreneurs who see investment as a long-term instrument are risk-averse and quite conservative. The reasons for this low-risk behaviour include lack of time to understand investments and lack of knowledge about various products. Risk comes with all types of investments and it’s usually the ones with higher risks that lead to better results.
It is more important than ever to be financially savvy and invest wisely in this current economic climate. While we can still get away with just sitting on cash or term deposits (or certificates of deposit in the US), in this low-interest-rate environment, earning any return at all can seem like a challenge these days. Putting your money into trustworthy financial investments such as stocks/bonds will give you greater access when needed and ensure yourself a passive income stream no matter what happens around us.
Stocks, bonds and other types of investments provide an excellent way for people to boost their finances but don’t have much money, to begin with. Going back to the point about educating yourself, start by educating yourself on how these things work before you invest anything. Investing is a great way to grow your wealth and increase its value over time. For many, investing can be daunting because it is not their primary area of expertise. However, have no fear, as there are some tried-and-true strategies you can follow. These strategies will help you feel confident in the investments you make with your money. “Money, The Book” by Shaun Fox also has some excellent information on how women can start investing without a lot of money.
If you’re a woman that’s thinking of investing, it is essential to know the many strategies available to help minimise the time you put into investing. One approach may be minimising the number of trades per month by using dollar-cost averaging. Another option might be automating your investments with pre-authorised transfers or setting up automatic deposits into an RRSP account every payday. The critical point here is to take advantage of any tools available so that your money can grow without being tied up in trading activities all day long.
We would love to help empower women across Australia by teaching them how to invest brighter than ever before.