This post follows the content of my most recent event, Girls Just Want To Have Funds which took place on Wednesday 21st June at the most glamourous Brydges Members Club in the West End.
We explored three common myths about women and investing. Read on for some surprising facts and for information on how to get started with investing yourself.
THE 3 BIG MYTHS ABOUT FEMALE INVESTING
Did you know that by 2025, 60% of all the wealth in the UK will be in the hands of women? It’s part of a global wealth transfer that’s taking place. Some of it comes from women inheriting money through widowhood or divorce, while others will receive support from baby boomer parents.
Additionally, more women than ever are actively creating wealth as entrepreneurs and business owners.
However, despite these achievements, research by the WealthiHer Network found that 72% of women feel misunderstood by the finance industry.
To shed some light on this issue, there are three major myths about female investing that hinder our financial growth and freedom: women being risk-averse, lacking investing confidence and believing that investing is not for us.
Let’s look at these myths one by one.
FEMALE INVESTING MYTH NUMBER 1: WOMEN ARE RISK-AVERSE
This is a risk stereotype that harms women financially, as it often leads to encouraging women to avoid risk in the investing choices they make. This can harm our financial growth and returns in the long term. It is far more accurate to describe women as risk aware rather than risk-averse.
In a survey where women were given a broader range of options to describe themselves as either a risk seeker, a risk taker, risk aware or risk averse, fewer than 10% of women described themselves as risk averse.
When presented with clear opportunities aligned with our values, women are motivated to take calculated risks. Being risk-aware actually makes us better investors, with studies showing that women outperform men in terms of returns over time.
FEMALE INVESTING MYTH NUMBER 2: WOMEN LACK CONFIDENCE
This so-called lack of confidence may stem from how women perceive themselves rather than our actual capabilities.
If you ask any woman, no matter how much she owns, earns or has created, whether she is confident about her finances she will say something along the lines of, “I should be doing more” or “I need to learn more”.
Women tend to downplay their skills and achievements, experiencing imposter syndrome. Yet, when it comes to managing businesses, properties and households, women have competence and transferable skills related to investing and numbers.
Looking at this myth form another perspective it may be that male investors are overconfident! Men are much more likely to give investing a go and take a punt. They do not feel they have to understand it all before they begin.
When surveyed about their financial literacy women answer ‘I don’t know’ far more often than men. However, women are diligent researchers and take the next financially safe steps, which ultimately leads to success.
FEMALE INVESTING MYTH NUMBER 3: WOMEN ARE NOT INTERESTED IN INVESTING
This couldn’t be further from the truth! This is very clear for me by the numbers of conversations I have with women who are ready to learn and engage, and by their attendance at events, both online and in person,
It is more that the male-dominated finance industry, biased communication, and lack of representation have historically excluded women.
Over 75% of financial advisors are men. In 2019, the number of fund managers in the UK called Dave were more than the total number of female fund managers! Financial products are designed by and for men and the advertising reflects this.
This is what women are not interested in.
When investing language is clear and relatable, based on experience, and aligns with our long-term goals and values, women become highly interested and engaged. We care about purpose and profits, seeking investments that address wider societal concerns.
WHY DOES THIS MATTER?
Becoming a female investor is crucial on three levels: taking control of our financial future and setting an example for those around us, creating financial equity due to our unique circumstances, and using conscious investing to contribute to the greater good.
So, are you ready to get going with investing? Remember, you don’t have to know everything to begin. Start small and sustainable, dedicate time to learn and discuss money and investing, and understand a few key principles that you can consistently apply. Successful investing is actually boring but the results can be astounding.
WHAT TO DO NEXT
To take your first steps, you can book a free call with me to explore how investing can work for you. Let’s have a conversation and help you become the investor you aspire to be!
In the meantime, you can contact me to subscribe to my Investing Matters newsletter full of interesting and helpful financial news and tips.
If you enjoyed this article, you might also enjoy these from the blog:
Female Investing: The Gender Gap And How To Bridge It
So You Want To Start Investing? Here’s How To Do It Simply And Sustainably