Women have come a long way in recent years. We’re making strides in our careers and leveraging our influence on the consumer market. We’re more financially independent than ever before.
But, where do we stand when it comes to investing in our futures?
According to a report released by Market Wired, although women now control 51%, or $14 trillion, of the national wealth, we still face unresolved challenges resulting in financial consequences.
The good news is that we can limit the impact of these challenges if we take measures to secure our financial future.
Read on to get the inside scoop on women and investing!
Women and Investing: What You Should Know
Investing is a smart and practical way to make sure that you are prepared for life’s curveballs. Here’s a look at why more women aren’t investing, and why they should.
Why More Women Don’t Invest
While it doesn’t apply to every woman, there are still too many of us that haven’t begun investing for what might lie ahead. And, why not?
Here are a few of the most common reasons that we came up with.
1. Women Earn Less Than Their Male Counterparts
Although the wage gap might not be as wide as it once was, it still exists. According to Business Insider, women currently earn 80.5 cents to a man’s dollar.
If you happen to be a woman who is also a racial minority, you’re earning power tends to be even less. Statistics show that the greatest disparity in earnings is typically between Hispanic women and white males.
Unfortunately, The Institute for Women’s Policy Research estimates it might be as late as 2059 before we reach pay parity.
2. Certain Expenses Tend to Weigh Heavier on Women
Even though women may make less, this doesn’t cut down on their costs of living. And, these sometimes can include higher expenses for females versus males.
For example, 66% of primary caregivers (single parents, for example) are women. Naturally, the costs of raising children or caring for a family member is greater when only one person is bearing the biggest financial burden associated with this role.
Also, women tend to live longer, according to the Market Wired report mentioned earlier, which may result in higher health care costs.
When we’re forced to stretch every dollar, it tends to be more difficult to sock any money away for future use. But, even on a limited budget, it’s often possible to save.
3. Women Aren’t Always Comfortable With Investing Their Money
A recent UK survey published by Financial Times indicates that 40% of women consider themselves “less knowledgeable about investing compared with others,” less informed regarding household investment decisions, and twice as less likely as men to value risk-taking versus returns (in regards to investment-making).
Since playing the stocks is largely dependent on one’s willingness to take risks in favor of reaping returns, these findings, seem to suggest that women are uncomfortable with the behavior that’s necessary to win big on the stock market.
But, the survey also helps to unravel why women are skeptical of investing. 40% say that the financial industry doesn’t design products “with people like me in mind.” And, in fact, they may be onto something.
5. Women Are Less Likely to Receive Investment Practice During Their Early Years
According to an article by Forbes, research shows that parents tend to discuss saving and budgeting with their daughters. Yet, parents also share the tendency to discuss investing with their sons.
Additionally, young men are twice as likely to have an investment or IRA account than young women.
It’s no wonder many women don’t feel as comfortable as men when it comes to investing.
Here’s why women should make the effort to invest anyway.
Why Women Should Invest
Women may not feel comfortable when first approaching investments. But, don’t let this scare you away from saving for your future.
1. You Will Likely Be Responsible for Your Finances During Your Lifetime
CNN reports that 90% of women will be the sole financial decision maker at some point in their lives. This means that 9 out of 10 women can expect to be responsible for their own finances, eventually.
Therefore, we should be proactive in planning for when that day arrives (if it hasn’t already).
2. Peace of Mind About Your Financial Future
According to research by Fidelity, 60% of women are concerned that they will not have enough money to last through retirement.
When you have set aside a nest egg, you can put your worries to rest. Investing in your future offers you a peace of mind that makes the sacrifices that you’re making now well worth it in the long run.
3. Your Retirement Depends on Present-Day Investments
If you plan on retiring someday, investing is a must.
By the time that you retire, inflation will have deflated the current dollar’s value. However, in the last century, investments have typically yielded a return of more than 10%. This means that your investment will more than make up for any value lost via inflation.
4. Statistics Show that Women Are Better at Investing than Men
A recent report published by Berkeley found that women tend to possess better-investing skills than men. But, of course, you wouldn’t know this if you never tried investing for yourself.
Also, even though only 28% of women report confidence in their investments, the majority still outperform their male counterparts. This goes to show that even if you may be unsure of yourself, there’s a good chance that you still have what it takes to invest successfully.
5. It Doesn’t Take Much to Start Investing
According to Glamour Magazine, almost 40% of millennial women think that you need at least 1,000 dollars to start investing. But, the truth is that you can get started with much less.
For example, FP Markets makes it easy to invest with only a $100 dollar-deposit.
Try approaching your initial investments with an open mind. Find a company that you trust and feel comfortable working with. Then, start with a small amount and don’t be afraid to ask questions along the way.
If $100 is too much to spend right away, start saving $10 or $20 a week or every two weeks. No matter how much you can afford, saving anything is better than no savings at all.
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