5 Things Women Should Know About Investing

According to a Women and Investing in 2023 Research study, women investors get better investing returns than men, with studies finding differences of 0.4% to nearly 1%. However, women aren’t as confident as men in their investing abilities and demonstrate lower levels of investing knowledge. Us women are doubting our abilities! That’s heartbreaking because we have what it takes to rule the world!

Resources like City Girl Savings, financial influencers, books, and podcasts are steadily increasing to help women who want to bridge that investing knowledge gap. If you fall into that category, I’m sharing 5 things women should know about investing. Like I’ve said before, when you know better, you do better!

5 Things Women Should Know About Investing

#1 You don’t need a financial advisor to start investing

There’s a common misconception that to invest you need a financial advisor, not true. After the pandemic, DIY investing has never been higher. People were at home, with nothing to do, so they managed their own brokerage accounts. No financial advisor required.

A financial advisor comes in handy when your assets are high, you want to avoid mistakes and you want to get strategic with how to reach your long-term financial goals. In CGS Podcast Episode 99 – Financial Coach versus Financial Advisor, I spoke with Financial Advisor Grace Kilgore about how people can identify when they’re ready for an advisor.

I definitely believe the goal is to get to a place where you are ready to work with an advisor, but until then, you can invest your money on your own and build wealth.

#2 You don’t need large amounts of money to start investing

Long gone are the days where you need $5,000 just to open a brokerage account! And yes, that used to be a requirement. When I opened a Schwab account back in 2010, the minimum to have an account with them was $5000. Now, you can open an account for free – no minimum balance required. Take advantage!

Even if it’s $10/month, investing on a small scale can build the habit, yield returns, and show you that it’s not as hard as it seems. Accounts like Robinhood, Public and Betterment allow you to invest on a small scale but get access to charts and data to help you learn.

#3 The earlier you start investing, the more you will have over time

Compounding returns are what builds wealth over time. The stock market has, historically, produced the highest returns over time. What does that mean? It means that the earlier you start investing, the more time you give your money to grow and produce returns, and the more time those returns produce returns…yielding a compounding effect.

A good place to see this in action is your 401k plan. If you have been contributing regularly over the years, just take note of how much your original investment has grown. Depending on the types of investments you have, you could have gains well over 10%.

That’s why I say that even $10/month can be impactful, especially if you start now and stay consistent with it. If you spend $10/week (or more) on Starbucks, there’s no way you can’t find $10/month in your budget to invest! Thank me later.

#4 Investing may seem intimidating, but it’s not that complicated

Once you’ve finished reading this article, I want you to listen to CGS Podcast Episode 107 – Adding Investing to Your Money Goals. Former investment advisor turned educator Marc Russell does a great job of making investing easier to understand. In the grand scheme of things, investing seems intimidating, but it’s not. Personally, that intimidation is a form of gatekeeping. Keeping those who don’t know uninformed and unwilling to take action. Not us though right?!

If you can understand the basics of investing, it’s not as complicated as you think. Anyone can be an investor. Anyone can be a successful investor. Let go of any preconceived notions you have about investing and the stock market and take action. I promise you’ll learn along the way.

#5 Be cautious of scammers or opportunities that seem too good to be true

One of the most important things women should know about investing is that if it seems too good to be true, it probably is. Unfortunately, there are a lot of scammers out there. People who will pop in your DMs and promise you incredible returns for your money. All you have to do is give your information and pay up. Don’t fall for it!

If you’re going to invest, make sure it’s through a reputable brokerage. If you’re going to work with a financial advisor, make sure they’re licensed and working with a reputable brokerage. Never give your information to anyone you don’t know, especially if it’s outside of a brokerage sign up process.

If you’ve fallen victim to scammers, file a police report. You may also want to sign up for credit alerts with the credit bureaus Experian, Equifax and TransUnion. That way you can see if anyone opens an account with your name and SSN.

Related: Top 5 Tips for Women Who Want to Invest

The study that I referenced earlier found that the percentage of women who invest outside of retirement grew from 44% in 2018 to 67% in 2021, according to Fidelity. That means we’re on the right track to building generational wealth for ourselves and our family! We still have some work to do, but it starts by being mindful and spreading the word when you are knowledgeable! Have you started investing? What scares you about the stock market? Share your thoughts and experiences in the Comments section below!

The CGS Team
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