Women’s Agenda has added a new ‘Fin Hacks’ segment to its weekly podcast, bringing you the latest money stories and best tips to stay ahead. Thanks to Superhero for supporting this important endeavour.
After the pandemic disproportionately hurt women, increasing their financial stress and reducing job security, new research shows that young women in particular are taking control of their finances in an unprecedented way.
Fidelity’s 2021 Women and Investing Study shows nearly three in four women aged 25 to 40 years old are now investing outside of their retirement accounts. A further two-thirds of young women see the value of investing for a specific goal, compared to 56% of young men, suggesting women are more switched on when it comes to long-term, sustainable strategies.
But there are also barriers that women are struggling to overcome. Fidelity’s research showed that while half of all women reported they had become more interested in investing during the pandemic, and 42% suggested they now had more to invest, just 41% felt comfortable with their investing knowledge.
Investing consistently is critical for women, helping to close the gender pay gap which currently sits at 14.2 percent in Australia. Investment portfolios are an excellent way to grow your income and wealth – something men have capitalised on for decades.
So how do women level the playing field? Below are some quick tips for getting started, staying on track and keeping up with the latest trends.
No one becomes a financial guru overnight but there are now more resources than ever for you to tap into to stay informed. These range from bestselling books like ‘Broke Millennial Takes on Investing: A Beginner’s Guide to Leveling Up Your Money’ by Erin Lowry to Bola Sokunbi’s ‘Grow Your Money’. There are also some excellent money podcasts to get hooked on like ‘She’s on the Money’ by Victoria Devine which has now been released as a book.
There are also a number of excellent online tools to get you more comfortable about taking that first step, while easy investment products like Superhero offer great informative blogs.
While you should never blindly follow someone else’s advice, it’s worth having conversations with people you trust – be it family members, friends or colleagues – who are better versed than you when it comes to investing.
Set your goals
Think about what you want to achieve in your investment journey. Perhaps you’re saving for a home, seeking to build your retirement wealth, or setting aside a nest egg for your children. Whatever it is, make sure you’re clear on your plan so it can guide your approach to investing and inform your risk tolerance. If you can visualise what you’re working towards, it’s less likely that you’ll pull out of your strategy abruptly. Patience after all is key to good long term investing.
Be clear on how much time and energy you can realistically invest
Most women are time-poor. With many of us struggling to manage a range of other competing priorities during the pandemic, this has never been more true.
The last thing you probably want to do is to spend all day monitoring your investments. Thankfully there are a number of options which can help you streamline your strategy and keep things rolling without making huge demands on your time.
Mutual Funds can be good for investing beginners, allowing you to regularly and automatically invest on a set schedule.
Exchange traded funds (ETFs) are managed funds which are traded on the stock exchange. Usually forgoing direct investment managers, ETFs tend to be an effective and low-cost investment option. ETFs also offer diversification benefits and instant access to a wide range of markets. Australian share trading platform Superhero allows users to invest in both US and Australian stocks and ETFs at low-cost.
Investing is a long-term strategy so make sure you have enough money outside of your investments to pay your bills. Think about what you can afford to invest in line with all of your other expenses and write down a budget so you don’t overstretch yourself.
Look into investment apps (and download your fave)
It has never been easier to be an investor thanks to a range of automated apps that can essentially manage things for you. Starting out with an investment app can be a great way to dip your toes in and alleviate any initial anxiety.
Many apps charge low fees and have reduced account minimums, which makes it easier to get started compared to traditional brokerage accounts. The best investing apps will arm you with the resources, information and support you need to make good choices and start growing your wealth.