When women invest, they do better than men.. So why don’t we all invest ?

The majority of women aspire to be financially independent and investing is one of the tools that can create this goal. Research has found that when women do invest their portfolio’s perform on average 0.40% better than men’s.

Contrary to popular belief this research has further shown it is not women’s cautious approach to investing that has kept them out of the market, but rather the fact they have historically had significantly less investable income than men. Given the societal pivot that is seeing more and more women building up significant financial pots why are we still investing 40% less than men?

A recent study produced by Kantar TNS “Winning over Women” identified some barriers women have said they face when it comes to investing. This article takes a look at these limitations and offers some tips to overcome them.

I don’t trust the system

The world of personal finance has long been a pale male boys club. The jargon and branding seemed designed to alienate anyone who didn’t fit this profile. Women got the message and stayed clear for the most part. How the winds of change have blown through this status quo. Investment firms, banks and even investment advisors are scrambling to understand “women speak” to get us on board.

 Yes, we don’t trust them and rightly so, they did their best to keep us out of the investing clubhouse. Now, they are chasing us to get onboard the investing train and it’s about time they started talking our language. We owe it to ourselves to speak up. If we don’t understand, ask questions. If we don’t like what they offer, how they offer it or simply do not trust them, we need to speak up. We are speeding past the era of being made to feel foolish, financially illiterate or unimportant. When we speak, they will listen. If they don’t, we will simply move on to the next eager suitor.

I feel stupid asking questions and not understanding

This is the way the system was designed to make us feel. Bluntly we did not fit into the club. The shoe is now on the other foot, our “stupid” questions are not stupid at all. They are gold nuggets to the Investment providers who want to hear what we have to say and change their offerings to meet our needs.

It is a challenge to speak up and ask given our years of being investment outsiders, but we are facing an unprecedented opportunity to build our knowledge, get investing and grow what is predicted to become a significant amount of wealth.

It’s risky

To coin a phrase  “Life is risky, none of us are getting out alive”. Quite frankly doing nothing is the greatest risk, rising inflation will guarantee that your cash savings will become worth less and less. How do you hedge against this? You invest. It is a given that markets will go up and down. These schizophrenic upwards and downwards movements are generally on an upward trajectory as a result of growing technology, efficiencies and evolutions in the market. If you can get clear on your goals and plan to be in the market for the long term you will have enough time to ride out the market rises and falls to achieve your aspirations.

It will impact my day to day with more to do’s

Unless you are planning on becoming the next Wolf of Wallstreet or Warren Buffett, you are not going to be watching your investments every day. This is a big positive and women generally do better at this then men. Our stable and consistent approach to investing generally plays out better than a strategy of chasing quick wins and rushing to buy and sell 

I don’t understand

Saying this out loud is the most empowering action. The second one is asking, “so how do I learn?” There is an endless supply of personal finance books, courses,  webinars and financial education platforms specifically targeted at women. Find what works for you, join investing groups, start talking and asking questions. The investing world is your oyster, don’t hesitate to exploit all the information available to you.

I don’t know who to talk to

Women in particular have seen money to be a taboo topic. The failure to speak up and speak openly has led to us feeling isolated, unsure and hesitant about which financial actions to take. The first step is to start the money conversation flowing. Chat to your partner, your closest friends and trusted colleagues. Find out what they are doing with their finances. Investigate, learn and start to get financially educated. From this place of knowledge and understanding take action either by starting an investment strategy or by seeing a financial advisor.

I don’t have enough to invest

There is a misconception that you need a truckload of money to invest. Those that invest regularly  can commit as little as £20 per month. Many online platforms offer the option to invest a monthly sum into a stocks and shares through a menu of investment products  from passive index tracker funds to actively managed funds or directly into individual shares and bonds. These investment choices make it as simple as possible for you to build a well balanced diversified portfolio which suits your risk tolerance and long term goals.

You’ve tackled the hurdles , now what ?

Investing is a building block in your wealth arsenal. It is important to also make sure your wealth foundation is secure. Before investing get your financial house in order, create your emergency fund, pay off your expensive consumer debt, analyse your income and expenses and maximise the amount you have to invest. Get clear on your financial goals and know where you want your financial journey to take you.

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