By Amy Jones
As a 24-year-old woman there are a lot of life lesson I am continuing to learn every day, and one of the most important lessons has been building financial stability for the future. As I continue to progress in my career, I’m learning that relying on others or parents to give me money for a house deposit or University is not the kind of habit I want to get into. Earning money and saving up for big ticket items like a car or house is something I have to do for myself. But it isn’t just about getting a job and paying bills, or putting money into an ISA so I can afford a house deposit. It’s about investing in my future, expanding my knowledge and being prepared for whatever financial circumstance that is thrown at me.
Since graduating University, I have begun to think about investing and how it can benefit me long term. Starting my own business is something I really wanted to do, knowing that savings alone might not be enough. But I know I will need a solid financial foundation to begin, and for that I have set my sights on other ways to build it – namely investing. And in our tech-saturated world, there are many tools available at our fingertips to help us do that.
Investing isn’t really spoken about among women, especially from a young age. When I think about it, I don’t think I have discussed investing with any of my friends, and neither have they brought it up. It just isn’t part of our general conversation, but it should be.
We talk about savings accounts, buying a house, starting a business and other things. We even talk about credit card debt, the gender pay gap, and the ways women are disproportionately impacted financially in life when they have children and take time out from their careers. So why shouldn’t we talk about investing?
Women See Investing As Too Risky
There are many reasons why a woman doesn’t invest but the primary reason is because of the risk. Investing is seen as betting by many people; however, that is not the case. Data shows that men typically aren’t intimidated by risk in a financial sense, whereas women tend to take a more conservative route and play it safe.
Furthermore, women are more likely to view money as something to benefit those we live with, with whereas men are happy to take more financial risks because they view their money as their own. Ironically, research also shows that women are not only better with money, they also see better returns for their investment overall, which is great encouragement for more of us to dip our toes into this world.
If we have learned anything from the pandemic, the uncertainty in our economy, and political instability in the world that can make us panic about the future, it is to control the things we can. Investing can become a powerful way for us to determine our own future, regardless of what happens around us.
Women Tend To Lack Confidence With Investing
Another reason why women wouldn’t invest their money is because they lack confidence. They doubt their knowledge too much to put money into an investment whereas a savings account is easier. A survey from NerdWallet said that only 48% of women invest compared to 66% of men. According to Scottish Friendly, 43% of women are put off investing because there are too many funds to choose from, making it feel like an overwhelming and confusing landscape where financial literacy is absent.
I was also put off from investing because of the jargon, mentioned in different forums and videos. However, you don’t need to understand much about the business world. All you need to do is the basics of it all and that is relatively simple to learn. There are so many great female-driven organizations and leaders who have created businesses to literally help women be less afraid of money, and look at it as something they can have great success with.
Robo-investing is something that many people are now doing. It is something I recommend, especially if you are not willing to commit hours to learning about different companies and investments. Wealthify and Plum are both great robo-investing apps. With these apps, you can choose investments based on their risk level. For example, some stocks won’t be that risky but others will be.
Remember, high risk means high reward so if you are willing to risk more money these apps will help you do that. The best part about robo-investing apps is that it adjusts your investment, depending on how it is doing. Robo-investing apps do all of the hard work for you.
Why Should Women Start Investing?
Investing is not just about the present, it is also about the future. You never know what is around the corner which could cause you financial difficulties. Whether it be another global pandemic, a family illness, having a baby or losing your job. Although society has come a long way, the gender pay gap still exists, and many career women are impacted by taking time off to have children, knowing that their ability to build wealth on the same track as men is disrupted. This now has a name – the “motherhood penalty”. Childcare has become so expensive, and women are still facing pregnancy discrimination, despite laws existing to protect us from this.
By choosing to invest early in your career or wherever you are right now, you can potentially mitigate the long term impact from the aforementioned issues.
In a study from BBC, Women’s retirement savings are 35% less than the average male. Again, this highlights that financially, we are not there yet as women. We should no longer be relying on men. We should be funding for our own future, using the tools that are now available to help us gain financial independence.
Changing The Financial Narrative For Women
Investing is something that I have now put a lot of thought into. Although I am very happy with my job, I know it won’t contribute much to my future in the way of building generational wealth. I don’t want to be reliant on any partner for my financial stability. To do that, I needed to invest, and given the many tools such as apps and educational organizations, I am empowered knowing that I am not alone.
Investing is one of those ventures every person must do their due diligence and research about before diving in. If you choose to use a robo-investing app, you need to ensure it is protected by the FSCS (Financial Services Compensation Scheme). This ensures your money is protected and regulated.
It is also important to be aware of who you you trust for advice. Don’t invest with random people who have reached out to you. This is usually an online scam, especially if you don’t know them. Even if it is someone you know, you must assume they have been hacked. These types of scams are very common across social media which is why it is important you are aware of them.
Investing can be a very effective way to build financial stability for your future, especially for women. For more resources on how you can get started, follow organizations such as Ellevest or Dow Janes, which are dedicated to empowering women with the right advice and guidance as you begin your investing journey.
Amy Jones is a freelance writer based in Manchester, UK. She loves writing about wellness and investment trends. In her spare time, she enjoys reading mystery books with a cup of tea or planning her next travel destination.
