We live in a time when women successfully rise to the top of any field and prove to be worthy adversaries to their male counterparts. Yet why is the investment arena still primarily a man’s playing field? Why do women shy away from investing?
Research shows women are partial to cash savings and property investment, viewing them as the safer bet. A large proportion of women associate investing in stocks as ‘gambling’ and ‘risky’.
Figures from HM Revenue and Customs on tax-free ISAs highlight that more women than men have opened a cash ISA and are three times more likely to open a cash Junior ISA than a stocks and shares Junior ISA.
There are lots of reasons why women avoid investing, which we will shortly delve into. I used to be a diehard procrastinator (literally nicknamed lastminute.com by friends) happy to take the easy route to my savings account and put exploring investment opportunities on the back burner.
That is until I finally broke down those intimidating barriers and took the necessary action towards building wealth and securing my financial future. By gradually taking the time to reflect over the reasons for my reluctance to invest, I realised that my lack of knowledge on the subject had been my greatest stumbling block.
The good news is once you become better informed; you’ll get more comfortable with financial jargon and within a short period be able to put together a strategy to grow your money into a nice little chunk of change. Without further ado, let’s get started….
10 Reasons Women Avoid Investing (And How to Get Over It)
1. I Don’t Have Enough Money to Invest
An incorrect assumption many of us make when it comes to investing, but sometimes this is wrong. Most of us probably have the money to invest and the truth is that you don’t have to have a substantial amount of money to start investing.
Did you know that you can start investing with as little as a £1? If you can afford to buy a coffee or go out on a night out, you can afford to invest.If you can afford to buy a coffee or go out on a night out, you can afford to invest.Click To Tweet
The simplest route to start investing is through stocks and shares ISAs and learn along the way. You can start a regular savings plan from as little as £50, or with a £1,000 lump sum with Fidelity. Capital at risk. The Wealthsimple Stocks & Shares ISA is a flexible investment solution with no minimum amount. So yes, that means you may enter the investment arena with just £1. Click here to get started.
A quick and low-cost way to start investing is to buy ETFs (Exchange Trading Funds, a marketable security similar to stocks) using platforms like Nutmeg and Moneyfarm. Santander’s Investment Hub is another reputable company that allows you to start investing with just £20 a month.
Robo-adviser services (algorithms that provide digital financial advice) offered by online investment management companies such as Wealthsimple, Nutmeg, Wealthtify and Moneyfarm will let you start investing with very small sums, giving you the option to add additional savings to your account each month, as well as reinvesting your profits.
Smart saving like this makes your money work harder for you.
Mobile apps such as Moneybox make investing a breeze. With Moneybox anyone can invest. Moneybox automatically invests your ‘spare change’ that you don’t think about. Now that’s a hard-to-beat offer.
2. Investments and Financial Products and Services are Complicated and Confusing…Aren’t They?
I totally agree!
Financial products and services can be so difficult to get your head around. I personally find financial terminologies and information complicated and off-putting.
However, let this act as a motivation (not a deterrent) to educate yourself further on money management so that you can earn more, build wealth and most importantly, retire in style without having to worry about your finances.
Today’s woman is earning more money than ever before. Armed with the right financial ‘know-how,’ a proportion of your income can be leveraged to create a nice nest egg for the future.
3. I Haven’t a Clue When it Comes to Investing
When I started out, I knew absolutely nothing about investing. You don’t have to be an expert to invest. All you need to know are the basics to make informed decisions and invest your money wisely, rather than blindly.
Securing your financial future involves creating time to learn. There are great books, courses, workshops and seminars available that will teach you how to invest your money.
Online courses allow you to learn from the comfort of your home. And if you’re really stuck for time, listen to Audible books while on the go.
Alternatively, avail yourself of the free initial consultation offered by many financial advisors and use this opportunity to get informed. Remember it is in their interest to grow your capital, so don’t feel intimidated to ask any and all questions and/or request further explanations.
Doing something always beats inaction and you need to be intentional about this. You’re not going to get any better until you take deliberate action to learn and grow in financial knowledge.
4. I Really Wish I Had Started Earlier
Forget the ‘should’ve, would’ve, could’ve’ rerun and remember there’s no time like the present! List out your financial goals, create a plan, implement and stick to it.
Get going with automatic payments. Setup monthly or quarterly automatic payments from your bank account into your investments and leave your money to grow.
Then anytime you get a pay increase or clear off a debt, give your savings and investment/s a boost too. You will thank yourself for it later.
5. Busy! Busy! Busy! Too Many Demands on My Time
We all know that demands on our time are one of the biggest hurdles to achieving financial education and planning.
It’s not going to be a walk in the park, but prioritising time to learn about investing your money wisely is a must. Especially if you’re not too keen on continuing to work into retirement.
A TUC study shows that about 40% of women are facing poverty or are being forced back to work due to inadequate savings in retirement. Another, by Age Concern and the Fawcett Society, which campaigns for equality for women, indicates a quarter of women pensioners live in poverty.
Learning how to invest your money and secure your financial future is one of the most important things you will ever do in this life – for yourself and your children. Don’t find yourself in a vulnerable position in your old age just because you left your financial future to chance.
It’s time you get started with investing and take advantage of compound Interest and pound cost averaging.
What is Pound Cost Averaging?
Pound-cost averaging simply means investing small amounts regularly rather than one lump sum. With small contributions each month your money soon gains momentum and starts to snowball. For example, as a regular investor with a £50 monthly contribution you can:
- Strengthen your investing muscle.
- Buy more shares when the market is falling.
- Avoid the need to time the market (which most people fail at).
- Keep the value of your investment intact during market fluctuations.
6. My Other Half Takes Care of Our Finances
A man is not a financial plan. You really need to start taking an active role in your family finances. The more involved you are the better you get at it.
Research shows women live longer than men; and guess what, if you choose to bury your head in the sand you will be in for a very big shock if your partner is no longer there to take care of the finances due to ill-health, death or divorce.
7. I Would Love to Invest, But Taking a Risk with My Money Makes Me REALLY Nervous
Understandable. But in order to grow your money you will have to partake in some degree of risk. You and I take risks daily. Every time you get into your car you’re taking a risk.
A great way to neutralise the fear of losing money or manage your risk is to diversify your investments. Diversification simply means not putting all your eggs in one basket.
Diversification allows you to spread your investments across different asset classes such as cash savings, stocks and bonds, real estate and commodities.
8. I Am Not Good At Maths. How Can I Take Charge of My Finances and Grow My Money?
Managing your money isn’t rocket science. Anyone can do it, even those with little schooling. You honestly don’t need maths to take charge of your finances.
If money were about maths, most of us would be very rich and none of us would be carrying any debt. Money is more about our behaviour and attitude.
Growing, managing and taking complete control of your money is a skill (like any other) that needs to be learned and developed. As you learn, you get better at it.
Taking charge of your money is more about planning; knowing what you want; where you want to go; and how you want to get there with the resources at your disposal.
We plan all the time – from holidays to parties, so putting together a simple plan to manage and invest money is totally doable.If money were about maths, most of us would be very rich and none of us would be carrying any debt.Click To Tweet
9. I Don’t Trust These Financial Institutions
All the more reason to improve your level of financial literacy. Understanding the risk/reward principle, how to compare and contrast various investment schemes, being informed on current market trends etc., will enable you to ask the right questions and make sound decisions based on facts rather than on suppositions.
Financial literacy is key to gender equality. Financial education will empower you and may possibly dispel some of that mystical allure held by financial institutions.
10. I Prefer Cash Savings And Regularly Save My Money So Why Should I Invest?
Saving is not the same as investing.
When you put money aside or save it, it is with the intention to eventually spend it. Remember saving for that holiday or new car? Your saved money will not be growing your wealth, whereas investing allows your money to grow into a larger sum.
And then there is the question of inflation.
Although inflation might seem like a jest in today’s economy, it’s a true force against your cash. If you are not investing your money you are going to lose so much money in the long term in cash savings.
According to Barclay’s bank: ‘Inflation is bad news for savers, as it erodes the purchasing power of your money. Low interest rates also don’t help, as this makes it even harder to find returns that can keep pace with rising living costs.’If you are not investing your money you are going to lose so much money in the long term in cash savings.Click To Tweet
The best way to get started and stay invested is to educate yourself on the subject, take action (one small step at a time), and believe in yourself and in your ability to develop to your full financial potential. We certainly do.
Your journey down the path to investment begins now!
Over to You…
What about you? Are you investing? If not, what is your reason for not investing? Are you willing to take some calculated risk and start investing? We’d love to hear from you in the comments below!
And if you are READY to start investing, stocks and shares ISA is the simplest route to get started.
I highly recommend Fidelity Stocks and Shares ISA. Fidelity ISA is an easy-to-manage, tax-efficient Stocks and Shares ISA.
They offer the flexibility of investing lump sums or starting a regular savings plan to help you reach your goals. You can start a regular savings plan from as little as £25 or make a lump sum contribution from £1,000.
It’s a great way to invest your ISA allowance this tax year, and you can start investing in a wide range of investment options in just a few easy steps.
And the best part is, it is easy to get started – and no fancy investment knowledge is required!
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