5 Simple Ways to Start Investing with Confidence Today!

CLOSING THE GENDER INVESTMENT GAP

Financial investment is likely to become a feature of your journey as you transition from solo self-employed woman to small enterprise leader you will need to think about investing. Whether that is personally investing your money or reinvesting your profits to support the stability of your business.

I cannot offer you specific investment product or strategy recommendations as I am not a financial advisor, I can help you to overcome some of your hesitation and misconceptions about investing, make more informed decisions and feel in control of your finances.

UNDERSTANDING THE GENDER INVESTMENT GAP

Financial data is often split by gender, or more accurately: sex. You’ve probably heard of the Gender Pay Gap: the difference in average earnings between men and women, or The Pensions Gap that demonstrates the disparity of resources and security at retirement age between men and women. Perhaps you’ve seen statistics evidencing how many men own and lead businesses versus women.

In the past, this split may not have mattered much because women were predominantly dependent on their fathers, husbands, or brothers – lest we forget, it wasn’t until 1975 a woman was allowed to own her own bank account! Today, as we work toward a more equitable society, these statistics become essential for identifying, understanding, and addressing financial inequalities. They’re crucial in working out how we begin to promote universal financial independence and security.

One of those gaps is referred to as the GENDER INVESTMENT GAP and outlines the differences in investment behaviour and outcomes between men and women. While I understand our world is growing up and we are acknowledging there are more than 2 genders – for the purposes of this article, I’m talking about 2 sexes: men and women. In part because there isn’t sufficient data to speak more inclusively and importantly because our behavioural preferences are typically influenced by how we are socialised, in other words, how we were raised as boys and girls, not necessarily how we might identify ourselves as adults. As a Coach, my interest is in the internal, unconscious thought patterns that influence your external, observable behaviour – behaviour that is central to the GENDER INVESTMENT GAP.

The data tells us that the difference in investment behaviour and outcomes between men and women include:

• women are less likely to invest
• if they do invest, they often choose more conservative investments
• women generally have lower financial literacy
• women lack investing confidence

Let me put that into context:

• women are 30% less likely to invest in the stock market than men, that means for every 10 men investing, 7 women are investing and 3 are missing opportunities
• women hold 68% of their wealth in cash or cash equivalents, compared to 59% for men which means women are keeping a larger portion of our resources in low-growth assets like the tin in the freezer or under your mattress while mean are earning money on their money while it sits in the bank
• only 17% of women hold a stocks and shares ISA compared to 30% of men which means your behaviour makes you half as likely to benefit from growing our money in long-term, high yield investments

WHY DON’T WOMEN INVEST

It is profoundly important for both men and women to work together to promote universal financial independence and security, as it benefits everyone. My intention is certainly not to perpetuate gender competition, but rather to highlight the opportunities you might be missing to create your own financial security.

The uncomfortable truth is that many women still earn less than men, and there are many reasons for this disparity. It may be due to childcare responsibilities, household duties, or a lack of access to higher education and better-paying jobs. It would be naïve to think that societal norms and stereotypes don’t play a significant role in shaping your financial behaviours. Many of us have grown up with unhelpful thought patterns and beliefs about money that may be limiting your investment potential.

Here are 5 common stories I’ve heard in my practice as a Coach:

“I’m less competent with money than men” You may have grown up with male role models handling finances for you: that may have been your father as the primary income earner, your brother running a business or your husband managing your household finances. As a result, you may believe you lack competence to make financial decision, it may make you feel reluctant to take control or it may simply make you feel less confident when it comes to financial matters.

“Money is a source of stress and conflict” If you grew up in a household where money was a frequent source of stress and conflict, you may have a negative association with money making you feel anxious around financial planning and make you want to avoid money-related discussions or decisions.

“Investing Is too risky and complicated for me” There is an inherent risk to investing and your perception of that risk may be making you feel that investing is too complex or risky, possibly an activity reserved for financial experts. This belief, in particular, may stop you from exploring investment opportunities, preferring to keep your money in the tin in the freezer or another low-yield savings account.

“I don’t deserve to be wealthy” Women grow up with a lot of societal messaging about humility and modesty that tend to underpin unhelpful attachments between self-worth and money, the resulting beliefs often mean you don’t feel like you deserve financial success or wealth. These beliefs tend to translate to self-sabotaging behaviours around money: under-pricing your services, avoiding salary negotiations, or avoiding investment opportunities.

“It’s better to save than to spend” If you were taught that saving is safer than spending and investing feels like spending, you’re probably less inclined to invest. Saving is important but overemphasis on saving can make you reluctant to spend your money on investments or even to take calculated risks.

Like all things human, your thought patterns and experiences of money are unique to you. If we were to work together, we might start by understanding the origins and impact of any unhelpful beliefs and thought patterns that may be underpinning your behaviours around money. Improving your relationship with money will help you to build confidence and make more informed decisions about your financial independence and security.

WHY WOMEN SHOULD INVEST

I am generally not a fan of the word “should,” but in this instance, I want to explain 3 reasons you should reconsider how you think about investment:

FINANCIAL SECURITY

Economic fluctuations are inevitable: inflation, GDP, markets will always shift and change, and as we’ve recently been reminded, things that happen in the rest of the world affect us at home too. However, over the long term, you’re more likely to make money than you are to lose money. Investing in your financial security will create a buffer against unpredictable economic times like the current cost of living crisis.

Statistics show women live longer than men, investing means you will have the resources to live well despite your partners absence. When you come to retirement age, your investments will ensure you have the resources to live well without any new income and despite the absence of your partner.

WEALTH ACCUMULATION

That phrase might make you feel greedy or vain but wealth accumulation is not a bad thing for a woman to do!! The reality is that wealth is a resource that will give you a sense of security. Take a moment to think about how it might feel to have security. It doesn’t need to be anything extravagant, it could be very ordinary: your home guaranteed to be your home far into the future, the bills paid far into the future and money to spare – maybe the freedom buy a handbag, go on a holiday or choose the work you say yes or no to.

Wealth accumulation means:

• Choice: More options for how to spend or invest your money.
• Control: Over your financial future and decisions.
• Freedom: To pursue opportunities without financial constraints.
• Independence: Financial self-sufficiency.
• Power: The ability to influence your and your family’s financial wellbeing.

GOOD FOR BUSINESS

The big secret is that YOU, as a woman, are a great investor – businesses want their investors to be diverse and to bring a different perspective to their decision-making processes. YOU as a woman investing are good for the global economy, YOU are good for business because you’re risk aware, and your preference is probably long-term investment.

Historically, women have rarely had choice or control over their financial security and stability, you do. In a more equitable and inclusive society you get to choose how you enjoy your money.

5 SIMPLE WAYS TO START

SPEAK TO A FINANCIAL ADVISOR

You don’t need loads of money to speak to a financial advisor and a good financial advisor won’t charge you upfront. A financial advisor can give you expert guidance on budgeting, investment strategies, retirement planning, tax efficiency, and risk management, all tailored to your unique needs and goals.

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EDUCATE YOURSELF

Statistics say women generally have lower financial literacy; that may be true, but that doesn’t mean it has to stay true:

• just because the women who came before us didn’t have control over their money doesn’t mean we can’t
• women are just as capable as learning as men are – you don’t need a degree; you just need to get informed
• we live in the age of fake news, do your research and seek out reputable sources
• if money seems boring to you, think about all the choices you get to make when you have money
• everything is confusing when it is unknown, everything seems difficult before you understand it

Look for books, online courses, webinars, news articles on investing basics and when you’re ready, start exploring more advanced strategies.

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GET CLEAR ON YOUR GOALS

If I’ve convinced you to consider investing, I wat you to take some time to get clear on what you want from your money. I love this SMART goal setting framework; it can be really helpful for this type of thinking – try these questions:

• Specific: Clearly define what you want from your money now and in the future.
• Measurable: Decide how you’ll measure the progress and success of your investments.
• Achievable: Set realistic and attainable goals.
• Relevant: Ensure your goals align with your broader financial objectives.
• Time-bound: Set deadlines and time frames for progress and success.

Don’t forget to celebrate your wins and commiserate your losses, honouring your emotions will make the whole process less scary for your brain.

TO SAVE OR INVEST?

The data shows women preference saving over investing. So save, saving could mean the tin in the freezer or a low risk saving account. And invest, investing means your money is growing exponentially over time and participating in the world’s economies. You can do both, in fact, you can diversify your portfolio with the help of a financial advisor – that means you “don’t keep all your eggs in one basket,” a diversified portfolio means someone is helping you to put your eggs in several different baskets.

SUPPORT

Human beings need each other – we need social connection and belonging especially in things that are new and scary. Seek out networking groups, investment clubs and mentorship programs that are built to support you.

HOW CAN I HELP?

I help women reshape their thought patterns and develop, healthier, more productive behaviours that support their aspirations. If we worked together, I could help you:

• Build confidence and self-trust in your own financial choices.
• Help you identify and overcome the thought patterns that are becoming barriers to investing.
• Develop personalised strategies to help you achieve your unique financial goals.
• Set regular check-ins and accountability to make continuous progress.

Taking the leap from solo self-employed woman to small enterprise leader is fraught with challenges and incredibly rewarding. The extent of your success is only limited by your imagination, your thought patterns don’t need to be a barrier to that success.

APPLY FOR A FREE STRATEGY CALL with me if you’d like to reframe your thoughts, beliefs and behaviours around money.