Why Women Need To Invest
Ellie is the author of Money Talks: A Lifestyle Guide for Financial Wellbeing and founder of This Girl Talks Money.
With an online community of over 50,000 people, Ellie provides knowledge, insights & a safe space to help people gain confidence and ownership of their finances.
You’ve probably heard about the gender pay gap, but did you know that there’s also a gender investment gap? It’s pretty significant too, standing at an eye-watering £567bn. Whilst more young men are choosing to invest their earnings, women are still choosing to hold funds in cash. Yet the data doesn’t lie: women are better investors than men. So why is the gender investment still so huge, and why does it matter?
It turns out, risk appetite is a major contributor to the investment gap and the idea of investing often sets off confusion and worry for many young women. But here’s the good news: the reality of investing is nowhere near as scary or difficult as it might first seem, and there are potential financial rewards to be won. So here are five reasons to start investing your hard earned cash right now.
Don’t Let Your Money Sleep
You show up every day and work for your money, so make your money work just as hard for you. Investing often requires a mindset shift in how you view money, and this is important not only for investing but for your overall attitude to the money you have in your pocket. It’s essential to remind yourself that money isn’t the end goal; it’s a tool that we can use to build and facilitate the life we want. When you shift your perspective in this way, holding on tightly to the money you have becomes less appealing and instead, you can start to use the tools at your disposal in the most effective way possible.
You Can Play The Long Game
Investing, in many ways, is a little bit like dating when it comes to the best approach. At one end of the scale, you’ve got the high stakes attitude which —although your friends might find it entertaining and every so often, works out for the odd person — for the most part, doesn’t end all that well. On the other end of the spectrum, you can take things slow and steady, avoid the rollercoaster ride highs and lows, but ultimately deliver what you’re looking for long term. The aim of investing for your future isn’t to get a thrill or dopamine hit; in fact, in an ideal world your investment journey will be consistent and reliable.
Time Is Your Biggest Asset
One misconception about investing is that you need to have a load of cash in the bank to get started. The reality is that you can start investing with amounts as small as £1 (depending on the platform you choose to use) and set up a direct debit to ensure that you keep adding to your investment pot gradually. Before you know it, the money will be working behind the scenes for you without you having to do anything. Starting sooner rather than later is always a good idea when investing.
It’s important to remember that when you invest for the long term, the most common approach is to invest into funds that are made up of a diverse group of assets, meaning you’re extremely unlikely to see quick peaks or troughs in the value of your investments. It’s why the growth of investments should be looked at over a long period of time, ideally at least five years at a minimum, so keep in mind that you only want to invest money which you don’t need easy access to and can afford to invest for several years. Remember, you can always increase the amount you invest later down the line.
Dreaming Of Retirement?
It might seem like a long way off right now, but has anyone else noticed how time has a sneaky way of speeding up as you get older? Retirement might not be as far off as you think, and the safety net of comfortable pensions which previous generations experienced has long become a thing of the past. Add to this that, as a nation, we’re living longer, so unless you plan to work until you’re ninety, it’s time to take responsibility for funding later life. Investing from a young age provides the best opportunity for your money to grow and benefit from compound interest — the gains that you earn on gains. As well as your investments hopefully growing, you can also gain on the gains. Magic, huh?
Okay, But How Do I Start?
We know that confidence and knowledge are key for women to take the plunge and start investing, so brush up on your understanding of investing if you feel that your missing knowledge is holding you back. Don’t stress, though; you absolutely don’t need to be an expert to start investing in 2024 thanks to a whole host of investing apps, or robo-advisors, that take all of the decision-making out of your hands and help get you started. Alongside easy-to-use apps aiming to democratise investing, tonnes of resources now exist to help women start investing with confidence, from Girls That Invest through to Female Invest and more, so find yourself a podcast or book you can dive into and get learning!
Please note this information is for educational purposes only. For financial advice, please speak to an independent investment advisor.