According to research done by Kiplinger, females are more methodical long-term investors than men. In general, we save more and we trade less. This means we don't expose ourselves to the friction costs of investing, which ultimately eat into any margin earned. Therefore, we earn more on our investments annually. Additionally female investors tend to be less eager to sell than male investors, which is ironic as most of the best investors say their worst decisions have been sell decisions.
Taking the first step towards investing can be daunting. I have first-hand experience of this. Fear is natural but what makes investing so worthwhile, is that the benefits far outweigh the risks. Since entering the market two years ago as a novice investor I have built up fundamental knowledgeable and understanding, my portfolio has expanded (better than any savings account or managed fund has returned for me), and I have really enjoyed the journey so far. However, I have really been struck that as a female investor I'm part of a very small minority, which doesn't help tackling that daunting fear I mentioned earlier, but rather exacerbates it.
At a recent hackathon I dug deep in this phenomenon to understanding the core reasons as to why more women either don't invest at all or at least to the same levels as men, despite it being proven that women are more successful at it. The main reasons I came away with were perception of affordability, potential risk, lack of trust, not knowing where to start and a lack of guidance.
The great thing about all of these challenges is that they all have solutions entirely within our own control. Given our natural predisposition to successful investing, I think it's about time that more women owned their financial future. I wholeheartedly believe, from first-hand experience, that stock market investing offers the best long-term opportunity to do so.
Here are five simple ways that have built my confidence to get started, and hopefully they will help you too.
This is a scary thought, right, but it doesn't have to be. Starting is the most important step that essentially requires two things - time and money.
Time relates to the hours you are willing to invest in building the knowledge necessary to reduce the risks associated with making uninformed decisions. It's important to know the basics. I found the perfect app that helped me get started. Start where ever suits you best, but the important thing is to get started. Your knowledge also relates to the length of time that you are comfortable investing, which will change your potential for higher returns-- hence the importance of getting started, now.
The second thing that is required is money. People presume they can't afford to invest or that they need thousands to get started. When realistically you can start with as little as ten dollars (although I recommend starting with a bit more than that, so that you are cushioned against the costs of investing - transfer fees, commissions etc.). Many apps offer fractional share investing, meaning you can buy a fraction of a share if the full share price is too large for you.
I believe that there is no better experience than that which is gained from the actual act of investing. Once you make your first move you are committed and this sense of commitment will lead you to understand, with greater clarity, how stocks and the stock market operate.
I adopt the 'buy-and-hold' philosophy. This requires buying part of the companies that you understand and believe in, and holding them for the long term (ten+ years). The reason I adhere to this philosophy is because it has been tried, tested and proven to be the best way to outperform the market.
Never Borrow to Buy
Borrowed money comes at a cost, usually in the form of interest, which will over time eat into your returns. As a good habit, with each paycheck I receive, the first thing I do is save ten percent of my salary. Save whatever you can and before you know it you'll have a nice little bundle to dedicate exclusively to investing. Or, you could follow the rule of investing what you can, when you can and on a regular and fixed period each month.
That famous adage, 'don't put all your eggs in one basket' can be perfectly applied to stock market investing. By spreading your risk across different stocks in various industries and diverse territories, you are providing yourself with the best opportunity to reduce your exposure should the market take a turn for the worse. Over time aim to build your portfolio to 12 stocks or more. You could even start with an ETF, which offers instant diversification.
Buy What You Believe In
Reflect on the brands that you consume every day. Whether it's Amazon, Apple, Nike or Netflix, start to build up your knowledge of what goes on behind the scenes of these companies. All listed companies have an Investor Relations page on their website. You can start there and get to know the nuts and bolts of the company.
From my experience investing has been a very enjoyable pursuit because I've invested in businesses that I believe in and understand. I have also learned a lot about new sectors, emerging trends and the broader business world along the way.
Since I began to invest it has only been a positive experience for me - even when the stocks that haven't performed as I expected have provided a learning opportunity. While some mistakes may be made along the way, there are ways to minimize these risks. Follow these five simple steps to build your confidence. Start today and enjoy the journey.
We are living in a time when women are rising to new heights which means they are regularly being confronted with the fear of being "too much". For women in business this is pervasive and costly.
A few ways women can be perceived as "too much" are:
Speaking up about their successes and achievements.
Sharing one too many photos of their cute kids.
Telling one too many people about that date night.
Looking a little too good in that swimsuit.
These can lead to being publicly attacked on social media or privately slandered which in turn leads to women dimming their light and walking on egg shells in hopes of avoiding conflict and judgement.
The minute a woman feels it's unsafe to shine she will begin to overthink, worry, and fear how she shows up in the world.
Forgetting to announce the book is done and the interview is live.
Choosing to focus on what's still on the to-do list rather than what's been checked off.
Many female entrepreneurs are subconsciously altering their behavior in an attempt to not attract too much attention to themselves, rather than focusing on allowing authenticity and magnetism to attract their ideal clients and community.
Women are afraid of being criticized, ostracized, and abandoned by other women for simply being who they are. This leads to quite the quantum when being who you are is simplest way to accelerate the growth of your business.
New research shows men are far more comfortable with self promotion than women are. Researchers found that men rate their own performance 33 percent higher than equally performing women. What we know is that self promotion pays off and this is where women are missing the boat.
The world needs more women to step into leadership roles and no longer be intimidated about creating six and seven figure careers.
Here are five ways to release the fear of being "too much":
1. Approve of yourself.
While it feels good to receive outside validation it will never be enough if you don't first appreciate yourself. The key to having a healthy support system is to make sure you are part of it. Being your biggest critic is what your mother's generation did. It's now time to be your biggest cheerleader. Becoming aware of self talk will reveal what belief is ready to be re-wired. Create a simply mantra that affirms how incredible capable you are.
2. Connect deeply to those you serve.
One powerful way to shift out of people pleasing behavior is to get clear on who actually matters to the wellbeing and success of your life and business. Leadership is not about being the most popular, instead it's a decision to be brave for those who can't be. Take a few minutes each day to visualize and meditate on those your business serves and supports. See your future clients moving toward you every time you choose to stand in your power and use your authentic voice.
3. Remember the legacy you wish to leave.
Having your life purpose and legacy in writing is one of the most transformational exercises you can do. Reading this often will keep you focused on what matters. Knowing what you wish to leave in the hearts of those you love most is incredibly grounding. You didn't come here to keep your mouth shut, dilute your truth, or dim your light-you came here to make a difference.
4. Forgive those who have been unsupportive in the past.
The past has a way of informing the future in a negative way when there is unresolved pain. Take a few minutes to get quiet and ask yourself who you have unforgiveness towards or maybe their name came to mind as you read this article. Listening to a forgiveness meditation or writing a letter to the person you are ready to forgive are both simple and effective ways to process and heal.
5. Be part a community of bright, successful women.
Meaningful relationships with others who have similar aspirations is what will keep you out of isolation and playing small. These connections can happen in a networking group, online community or a local Meetup. Thriving in every area of life is depend on you knowing where you belong and being celebrated there. Don't wait to be invited, go actively seek out people and places that support your dreams and desires.
6. Accept you can have it all.
Women have been fed a lie for generations that says, you can have love or money. Decide you can have it all and allow it to flow to you. You can have a successful career and an amazing mother. You can balance motherhood and loving marriage. Don't let anyone write the rules for you. This is the time to create the life you desire on your terms.
7. Celebrate everything!
The fastest way to leave the haters in the dust is to celebrate everything! At the end of each day lay in bed and recall the best moments. At the end of each week, publicly acknowledge and celebrate what's good in your life. Once a month, have a celebration dinner and share it with those who have helped you in the journey. If there's something good happening, talk about it with everyone who will listen!
May you be a woman who chooses to shine so that others may be reminded of all they can be and do.