Recent data shows that women invest 40 percent less than men.
This shortage of female investors is part of the reason why there is such a wealth disparity between men and women.
If you’re interested in doing your part to close the wealth gap, you need to start investing and taking your long-term financial health more seriously.
Read on to learn more about why women should invest and how you can get started.
Why Women Don’t Invest
First, it’s important to understand why women aren’t investing. There are lots of reasons why women don’t invest their money, including the following:
Lack of Accessibility
For a long time, the world of investing was an old boys’ club.
It was hard for women to get in and start investing in the stock market, and it was also hard for women to find financial advisors that they trusted to help them (and who were willing to provide them with the help they need).
It’s true that the tides have changed over the last few years. At the same time, though, a lot of women don’t realize all the different investment options that are available to them.
Women are also, in most cases, less aggressive than men when it comes to their financial decisions.
Men are more likely to take risks and be willing to invest their money in the stock market or other avenues like real estate. Women, on the other hand, tend to be more conservative and are more likely to tuck their extra money away in a savings account.
Even though they know there’s less of a reward to be had from this approach, they also know they’re less likely to lose that money if they play it safe.
Lack of Knowledge
A lot of women also just don’t know where to begin when it comes to investing.
They may not have been taught the same money management skills as their male counterparts, and they may not know where to look to develop those skills.
The more women know about the investment resources available to them, the more likely they are to take advantage of those resources and start diving into the investment world.
Why Women Should Invest
There are lots of reasons why women need to start making investment a priority. In addition to closing the wealth gap between men and women, the following are some of the other most important reasons to begin investing:
Reach Financial Goals
Investing makes it easier for women to reach their financial goals.
These might include personal goals, like having enough money to go back to school, buy a house, or pay for a wedding. They might also include family-related goals like saving for your children’s college tuition.
Whatever your specific financial goals are, you’ll reach them a lot faster if you invest instead of relying on a savings account.
Save for Retirement
Investing also makes it easier to save for retirement. You’ll be much more likely to have the money you need when you retire if you invest wisely while you’re young.
Remember, too, that women tend to live longer than men. Because of this, you’ll need more money in retirement than your partner.
Build More Wealth
Investing also allows you to build more wealth.
It doesn’t matter if you want to have more money to your name to help smash the patriarchy and close the gender wealth gap or simply for your own personal gain.
Either way, it behooves you to start investing sooner rather than later.
Keep in mind that women, when they do invest, are often better at it than men. Research shows that women tend to see greater returns and make better decisions than their male counterparts.
How to Start Investing
You can see that it’s wise for you to start investing. How do you begin, though?
Here are some tips that will help you start your investment journey off on the right foot and get the most out of your investments:
Learn the Basics
Start by learning about the basics of investment. Read books by investment experts like Suze Orman or work with a financial advisor to learn the ropes.
Set Clear Goals
Know what you want to get out of your investments.
Are you saving for something specific? Do you want to have a nice nest egg for when you retire?
Having clear goals will help you stay motivated.
Create a Plan
Next, you need to come up with an investment strategy.
How much of your income will you invest each month? Where are you going to put that money?
This is where having an advisor in your corner can be helpful.
Start with a Retirement Fund
A great place for women (or anyone, for that matter) to start investing is with a retirement fund. Open a 401(k), IRA, or Roth IRA and start planning for the future today.
Diversify Your Portfolio
Be sure to diversify your investment portfolio.
Don’t put all your eggs in one basket. Instead, invest in a variety of stocks and bonds.
This will help to protect you from market fluctuations and ensure you see the greatest returns from your investments.
Avoid High-Risk Investments
Let your intuition guide you and steer clear of high-risk investments. Focus on investments that are likely to yield good long-term results.
Keep Educating Yourself
Never stop learning. Continue educating yourself and keep up with the latest U.S. stock market news.
Monitor Your Investments
Be sure to monitor your investments on a regular basis, too.
This will help you figure out what’s going on in the markets and make decisions that will help you reach your investment goals.
Learn More About Investing Today
As you can see, there are lots of reasons why women should invest.
It’s not enough to know that women ought to invest, though. Women also need to understand how to get started.
Keep these tips in mind so you can begin your own investing journey, or share them with a friend who needs to start taking their finances more seriously.
If you need more investing and financial advice, be sure to check out the Money and Finances section of our site today.