Ladies, listen up: more now than ever, women are the family breadwinners, budgeters, and investors. And whether you’re a working mom in the suburbs or a new college grad living the big city life, money matters.
If you’re intimidated by the stock market or investing basics, don’t stress! Read on for a beginner’s guide on investing for women, and learn why more women than ever are using the stock market to grow their hard-earned cash.
Why is investing for women so important? Two words: girl power. Whether you’re married or single, a mother or child free, it’s important that you rely on no one else to meet your basic financial needs. Women live longer than men and are more likely to care for aging parents, so financial stability is crucial.
Also, many women now delay marriage or children. Younger generations want to travel, retire early, and reach financial freedom ASAP. We’re standing our ground on what we want!
But as our lifestyles and plans have evolved, so should our money goals, which we discuss next.
Define Your Goals
As you start thinking about what you want your money to do for you, consider your goals in the next 1, 3, 5, and 10 years. Do you want to start a family, get into real estate investing, or get a Master’s degree?
The time frame of these goals will determine when you need investment-related cash flow, as well as how much risk you can withstand in the stock market. For example, if you plan to buy a house in six months, you don’t want to throw every dollar you own into a high-risk tech stock.
Make a list of your goals and estimated timeframe, which helps with the next step.
Self-Educate or Hire a Pro
The financial world is full of terminology, math, and spreadsheets. Decide early whether you’re comfortable learning about investments on your own, or whether you want to hire a financial advisor.
If you want to strike a happy medium, consider a robo-advisor, which is an online, low-cost (or free!) advisor to help you invest according to your goals. Popular robo-advisors include Betterment and Wealthfront.
Investing for Women Requires Diversification
Whether you choose to manage your own investments or use a pro, the most important concept for women to understand is the importance of diversification. Said another way: don’t pull all your eggs in one basket.
This means that a certain percentage of your invested money should go into bond funds (low risk) and some should go into mutual funds (moderate risk). Some might go into individual stocks, and some should be kept aside as cash.
There are countless tools online to help you determine this split, and this allocation will change as your goals evolve.
The Time to Invest is Now
Whether you have ten dollars or ten thousand dollars, the saying is true: time is money. Every day you delay investing is more money left on the table.
Investing for women doesn’t need to be intimidating. This is your life and your future. For more tips on reducing debt, improving your credit, and investing successfully, check out the rest of our site today!