By 2020, women are expected to control $22 trillion of U.S. personal wealth and 32% of global wealth.
But more than half of women do not invest in the stock market according to a survey (of women who make at least 50K/yr).
That’s a lot of cash that isn’t making more cash.
The survey also found that many women say that they’d like to invest but don’t know where to start. Some simply have their husbands manage the family finances. And recent college grads (the majority are women) are stuck paying off a stinking hot pile of debt.
But not investing costs the gentler gender thousands in the long run. And since there is so much opportunity to grow wealth on the stock market, investing sooner can pack some serious support for your financial fortitude.
So, Why is it Important for Women to Invest?
You’re the breadwinner
That’s right, almost half of American working women say they bring home most of the dough. And as the primary vehicle of income, planning for you and your family’s financial future can help to maintain or improve your lifestyle.
You live longer
A longer time on this earth (roughly 5 more years than men) means you need to stretch your finances even further to satisfy expenses and afford healthcare.
Women do better in the stock market than men
Women investors tend to perform about 3-5% better than men. Pip Wilson, CEO of amicable, found that women tend to get better results in the stock market because they generally take on less risk, invest in organizations that value diversity and set realistic financial goals, such as purchasing a house.
The Pay Gap is real and could potentially be offset by investing
According to a study by Glassdoor, women in the US rake in roughly 5.4% less than men when adjusting for age, job title, employer and location. Because women tend to be better investors than men, they could come out ahead, despite the earning-shortfall.
The world needs you
More women than men are interested in “impact investing” — which are “companies, organizations, and funds with the intention to generate a measurable, beneficial social or environmental impact alongside a financial return.” The more women invest, the further they propel social change.
But Where to Start?
Assess Your Financial Standing
Getting a bird’s eye view of your income vs expenditures is a vital first step. For instance, if you are heavily in debt, it might make more sense to pay off the debt before investing. However, if you’re debt-free and have 20K sitting in a bank account collecting dust, it may be more viable to invest it instead. Understanding your financial health is paramount to coordinating life, especially if you’re considering investing.
Know Your Goals
Whether you’re trying to buy a house, saving for retirement or just looking to increase your overall wealth, identifying your long-term goals will inform how to contruct your portfolio. Different plans for different goals.
Talk to an Advisor
An advisor truly knows the industry and can (probably) answer all of your questions—usually for free. They can explain how it works and execute most of the work on your behalf. If you’re even remotely interested, it might be worth a phone call.