Empowering Women to Invest: Overcoming Challenges and Unlocking Financial Success | INVESTEDMOM
Making investments to achieve financial goals and accumulate wealth over time can be traced back to the 1700s in the Code of Hammurabi, a layout of essential laws for civilization containing legal investment guidelines. Despite the history of investing, women continue to face challenges due to underrepresentation and gender biases common in the industry.
These lack of gender disparities make it less likely for women to invest in businesses, causing them to miss out on investment opportunities. More women must begin investing in startups and organizations instead of allowing their male counterparts to rule the investing world. Women who are confident and dedicated will start to influence the future of investment industries.
The Rise of Women Investors
Women were a significant part of the paid workforce in the 1930s. By the 1970s, about 50% of single women and 40% of married women were earning money by working. Women are now able to build their wealth in several ways. Between opportunities for accumulating money like inheritance and successful careers, women now have more of a chance to make an impact economically and further stretch their earnings when they invest.
The average life expectancy of a woman living in the United States is 80 years. Because of this, women have a more significant focus on long-term financial goals, like living comfortably throughout their retirement years.
Benefits of Women Investing
There are numerous benefits of women investors entering the scene. The opportunities brought to women help to create an inclusive investment environment.
Accumulate Wealth
Early investments are an excellent way for women to grow their money as their investments rise in value. Investing generates income faster than traditional savings accounts can, making them a fantastic option for women looking to expand their portfolios while building their net worth. When women invest in assets like real estate, stocks, bonds, and mutual funds, investors will increase their capital finances.
Even small contributions can make significant impacts. For example, investing $1,000 annually into an investing account with an 8% interest rate can grow considerably when you retire.
Increase Financial Independence
When women invest, they will have a greater understanding of financial instruments and how to use their money best to work for them compared to women who do not have access to these tools. Current trends have increased the belief that women are more prominent in investment markets.
By making investment decisions that align with your values, you will be more in control of your money and how it assists you and businesses worldwide. Women can continue to shift the venture capital landscape and reshape the future by supporting women-led companies and entrepreneurs throughout the country. Supporting women founders will continue to make a change in the current unequal landscape impacting women.
Achieve Financial Goals
Investing is a magnificent way for women to save for long-term financial goals, like the future of their children's education or their retirement years. Knowing how to adequately align investments to fund their goals can make women investors more successful. Women should save 10%-15% of each paycheck into a retirement account to avoid investment risks and achieve their investing goals better than those who do not hold as much.
Provide Women with a Source of Passive Income
Investments can help supplement a primary source of income by providing passive income on the side. These investments in women-led businesses can support a woman's family for generations. More women are beginning to see the importance of investing to support their families than ever before.
Diversify Assets
Diversifying your portfolio will help ensure you do not have a large amount of one investment instrument compared to others. A diversified portfolio can help you in two primary ways; Reduce your overall risk and improve your odds of significant returns. Investors face two types of risks when they join the investing community; Market risk (systematic) and asset-specific risk (unsystematic.)
All assets face systematic risks, even cash. These are risks posed on the market as the value of assets depreciates over time. There are many reasons investments might decline in value, including the economy, political state, interest rate changes and the preferences of investors. On the other hand, when you invest in specific assets like bonds of companies or a firm, you run the risk of particular assets performing poorly. These risks can result from how a business or management performs on average or the state of the venture capital landscape.
When more women own various assets, they will avoid the chance of one investment significantly impacting their portfolio. Some purchases may perform well this year but not so much in the next. A diversified portfolio will ensure that nearly half of your investments often work for you.
Challenge Gender Stereotypes
As more women begin to invest, we actively challenge gender stereotypes. A recent CNBC report states that according to gender and race, 59% of black women now have any investments, followed by 48% of Hispanic women and 34% of white women. This gender gap is deeply rooted in society's view of women as passive members of the financial world.
Historically speaking, men were the sole handlers of all manners related to money, while their female partners stayed to tend to the needs of the family and house. As women have more access to the workforce, they can challenge gender stereotypes and invest their money in ways that align with their values. Women investors can further challenge gender roles by supporting women-led companies and CEOs.
When women actively invest, they challenge the idea that investments are a "man's domain."
How Women Invest: Common Strategies
As women venture into the land of investments, they might find the process daunting. Here are some common investing strategies to help you get started.
Long-term Investing
The idea of long-term investing is for investors to hold onto their assets for as long as possible, riding out market fluctuations and maximizing their chance of high returns. Assets that are funded long-term take patience and discipline. Often, investors face market pressure to sell or trade their assets. Regarding long-term investments, avoiding the temptation to sell is crucial for investment success.
Impact Investing
Impact investments focus on generating a positive social or environmental change while gaining significant financial returns. These investments are usually in sectors like renewable energy, conservational efforts, sustainable agriculture, and many more clean services or companies. These impact investments can improve your venture capital while aligning with your values.
Tips for Implementing Strategies
Women that are new to asset allocation can find it a challenge to invest. By following practical tips, you can better achieve your goals financially and increase your financial independence.
Setting Goals
Creating goals for your money will give your income a sense of structure and purpose of allocation. As you make these goals, it is essential to consider the current and future state of the economy and how it will directly affect your investments.
Women should organize their short-term, medium-term, and long-term goals to help them decide how to allocate their money. Shorter-term goals usually focus on preserving venture capital, while longer-term goals aim to create wealth.
Create a Diversified Portfolio
To diversify your portfolio effectively, you will want to include stocks and bonds from a variety of sectors to better even your playing field. A portfolio that works for you will help level the unequal landscape impacting women. As you create your investment portfolio, consider your risk tolerance and time horizon. A diversified portfolio can help avoid market vitality and spread out your risks.
Avoid Common Mistakes
Avoiding common mistakes when you invest will help you be successful as you fund your financial expectations. A mistake often faced by women support is expecting too much or following someone else's expectations. No one can anticipate how the venture capital landscape might behave, so it is essential not to have expectations set in stone.
Another common mistake women make is buying their assets at a high price and later selling them for a lower rate. The motivation for these mistakes can be community fear or funders' greed. This mistake ties into the error of trading too often. It takes time to see a gain from your investments, and frequent asset allocation can reduce your return output.
By avoiding common mistakes, women can see the most benefits from their financial strategies as entrepreneurs.
Challenges and Biases Faced by Women in Investing
Women face numerous financial challenges and biases, which can deter them from investing.
Gender Biases
Gender biases as women invest can take several forms. One of these ways is the belief that women are less knowledgeable than men or less financially educated. Another common assumption is that some have less desire to invest than their male counterparts.
These ideas can cause women to invest less than men, find exclusion from vital decisions, and earn less capital than they could.
Underrepresentation
Women face severe underrepresentation in the financial community, with fewer female founders than men. According to a Catalyst survey, 20% of executive committees are women. A lack of gender representation can limit the opportunities for women to build their venture capital.
Need for Challenging Biases
When a community addresses the challenges women face as funders, it will improve women's financial empowerment and the economy. A lack of diversity can cause a lack of investing options. Women offer a different point of view than men when it comes to making investments. Having inclusive opinions can increase the range of outcomes for individuals that invest.
The Role of Education in Women's Investment Success
Women with better financial education will succeed more as they allocate assets and make their money work for them. With a basic understanding of financial components like budgeting, saving, and investing, women can achieve financial security and independence like never before.
Educational Resources
Utilizing educational resources can help women become successful investors as they fund their families and their communities. Women can use resources like books written explicitly to improve their understanding of financial services. Local libraries are great options for those looking to read about how to invest. Better yet, you can even ask your librarian for books written by women, for women.
You can find various fantastic online courses if you want to improve your financial knowledge. Formal financial education's a great way to enhance your understanding of the economic realm and engage with like-minded women looking to improve their financial awareness and break deeply rooted gender biases.
Empowering Women to Invest with Confidence: Take Action with Invested Mom's Financial Course
The investing landscape always faces changes as women lead the way through financial hurdles and overcome gender bias expectations. As women, we face unique challenges men may not that can ultimately impact our success investing.
Access to financial education from a female founder is a critical economic resource for women to find success in their financial decisions. These resources give women the unique services needed to improve their odds.
If you are considering learning more about your financial options, sign up for my course with Invested Mom. Work with me to learn more about the steps you can take to start your investment journey.
Meet the Author:
Inge was born and raised in Cape Town, South Africa, and moved to Canada in 2010 looking for a better life. She always had an entrepreneurial spirit and started her first side hustle when she was 9 years old – selling fudge at school during lunch breaks.
It wasn’t until much later that she realized that saving isn’t enough to get ahead. She was always very interested in real estate, but saving up for a down payment was grueling and slow, and the demands of life kept getting in the way.
She started investing in herself and upgrading her skills while learning how to invest. She quickly became debt free and compounded her money at a staggering rate.
It wasn’t until she became a coach that she realized how significant an impact she can make in people’s lives by sharing her journey, learnings, and processes.
So here she is, advocating for everyone who is invested and wants to build their wealth, especially the mommas!