Why is investing such a necessary part of personal finance for women?
Finally, tax will be removed from sanitary pads as of 1 April 2019. Money will also be made available for the roll out of free sanitary pads at schools. Thank you Minister Tito. This is a huge step towards a much longer journey of making menstrual health and hygiene accessible to women across the country. 💪
While we are talking about women and their rights, we all know the much publicised and increasingly vocal movement to re-dress the balance between male and female salaries. Many government around the world have insisted that companies publish the gap between male and female pay- the gender pay gap. Dear president Cyril, we are waiting for that day too. 👀
While women’s rights have improved immeasurably over the last century, their financial well being continues to lag behind men’s.
And while women investors are on the rise, there is still a gap between the number of men and women who are in the investments market. According to studies, as women we tend to shun the stock market for the deceptive safety of cash savings and keep a grip on the world's private wealth.
I remember when Carrie Bradshaw from "Sex and the City" said in a phrase that launched a thousand Etsy posters: "I like my money right where I can see it — hanging in my closet."
Most women resonate with that statement.
The reason why many women don't invest is the common misconception that you have to be an expert in the industry to succeed when the reality is that there are so many tools and resources that make easy to start investing with as little as your pocket change.
So what can women themselves do about it. I believe women can do much to improve their own finances. They can 'invest' their way out of the gender pay gap they find themselves in.
Whether you’re looking to bridge the gender pay gap or just grow your wealth and financial security, investing is a great option.
So why is investing such a necessary part of personal finance for women?
1. As women we are good with money because we do save. We also have all the attributes that make us good at investing – strong convictions and a tendency to buy and hold. Men trade more – you could argue that men are responsible for stock market bubbles. It’s not just risk appetite that varies between men and women, we also have different priorities for our money. For example, as women we are three times more likely than men to retire for family reasons.
2. Studies of gender differences in investment behaviour consistently show that, in the long term, female investors consistently outperform men. This difference in performance is most notable when markets are bad. Why did women fare better? They took less risk; they worried more about losses; they traded less and earned more. One of the more commonly cited studies comes from Fidelity Investments, which analyzed over 8 million client accounts and found that women outperform men by 0.4%. A Barclays-sponsored Warwick Business School study found an even greater gender-based outperformance: 1.2%. And a narrower study of Finnish investors between 1995-2011 cited "evidence that females are superior traders."
3. Unknowingly, women could be putting their financial futures at risk through fear of investing and not prioritising their long-term finances. With interest rates currently so low, inflation is eroding the value of cash savings in real terms. The gender pay gap is still very real and changes to the state pension age mean women’s pre-retirement incomes are now falling.
As Sallie Krawcheck from Ellevest once said, "money is power. And if you don't have as much money as the guys do, it can put you in a tough position. It can keep you in a job you don't want to do. It can keep you in a relationship you don't want to be in. It can keep you from taking that trip around the world, or starting the business you've been dreaming about."
Basically, it's to our detriment if we don't invest.
Remember how the women in your family used to stretch their rand? Yes! As women we are wealth creators. We have the power to change our financial situation and eventually impact the world.
I know that investing in the stock market does come with risks, but it's a surefire way to start taking charge of the money you make. If you don’t consider yourself an investment expert (and frankly, even if you do), getting professional help is a good idea.
The most important thing is to get started. Many a times we have this idea that you have to have a certain amount of wealth before you start investing outside or there's an idea that 'Wow, I'm living paycheck to paycheck; I don't have any money to save or invest.' I think it's important to set aside just a little bit of money and get started, no matter what your situation is, because the most important factor you have on your side is time.
Do your research, trust your gut, and get started. When you see how much your investments can grow, you’ll wonder why you didn’t start sooner.
Are you currently investing in the stock market?
So what can women themselves do about it. I believe women can do much to improve their own finances. They can 'invest' their way out of the gender pay gap they find themselves in.
Whether you’re looking to bridge the gender pay gap or just grow your wealth and financial security, investing is a great option.
So why is investing such a necessary part of personal finance for women?
1. As women we are good with money because we do save. We also have all the attributes that make us good at investing – strong convictions and a tendency to buy and hold. Men trade more – you could argue that men are responsible for stock market bubbles. It’s not just risk appetite that varies between men and women, we also have different priorities for our money. For example, as women we are three times more likely than men to retire for family reasons.
2. Studies of gender differences in investment behaviour consistently show that, in the long term, female investors consistently outperform men. This difference in performance is most notable when markets are bad. Why did women fare better? They took less risk; they worried more about losses; they traded less and earned more. One of the more commonly cited studies comes from Fidelity Investments, which analyzed over 8 million client accounts and found that women outperform men by 0.4%. A Barclays-sponsored Warwick Business School study found an even greater gender-based outperformance: 1.2%. And a narrower study of Finnish investors between 1995-2011 cited "evidence that females are superior traders."
3. Unknowingly, women could be putting their financial futures at risk through fear of investing and not prioritising their long-term finances. With interest rates currently so low, inflation is eroding the value of cash savings in real terms. The gender pay gap is still very real and changes to the state pension age mean women’s pre-retirement incomes are now falling.
As Sallie Krawcheck from Ellevest once said, "money is power. And if you don't have as much money as the guys do, it can put you in a tough position. It can keep you in a job you don't want to do. It can keep you in a relationship you don't want to be in. It can keep you from taking that trip around the world, or starting the business you've been dreaming about."
Basically, it's to our detriment if we don't invest.
Remember how the women in your family used to stretch their rand? Yes! As women we are wealth creators. We have the power to change our financial situation and eventually impact the world.
I know that investing in the stock market does come with risks, but it's a surefire way to start taking charge of the money you make. If you don’t consider yourself an investment expert (and frankly, even if you do), getting professional help is a good idea.
The most important thing is to get started. Many a times we have this idea that you have to have a certain amount of wealth before you start investing outside or there's an idea that 'Wow, I'm living paycheck to paycheck; I don't have any money to save or invest.' I think it's important to set aside just a little bit of money and get started, no matter what your situation is, because the most important factor you have on your side is time.
Do your research, trust your gut, and get started. When you see how much your investments can grow, you’ll wonder why you didn’t start sooner.
Are you currently investing in the stock market?
0 comments