Investing is a great way to secure your future, whether you’re a woman or not. But, as a woman, it might be even more critical for you to take the leap and start investing to secure yourself a better future and financial independence.
Historically, women have been less involved in investing and financial planning than men, often due to societal norms and a lack of targeted financial education.
This trend has significant implications, as women frequently find themselves at a disadvantage when it comes to building wealth and securing financial independence.
Even today, many women do not actively participate in managing their finances or investing, leading to a gap in financial security and knowledge. This disparity is not just a matter of personal financial health; it’s a broader issue that impacts families, communities, and economies.
As women increasingly become primary earners and key financial decision-makers in households, addressing this gap by encouraging and empowering more women to take control of their financial futures through investment becomes not just critical for individual prosperity, but a collective imperative for economic stability and growth.
Therefore, as a woman, embracing the world of investing is more than just a wise financial move; it’s a step towards challenging and changing a status quo that often leaves women on the sidelines of financial empowerment.
4 reasons why women should start investing
Like in many areas of life, there is a gender gap between men and women in wealth management and investing. But that’s not all. Let’s take a look at the following facts:
Women get paid less than men
It’s no secret that there is a pay gap between women and men. Globally, it is estimated that women earn 23% less than men. Switzerland is no different, and it’s gotten worse in the past few years. Overall, in Switzerland and 2018, women have earned 19% less than men for the same job.
This means that as a woman, you will probably take longer building wealth than men and getting to the same level of savings overall, even with a qualified job (in banking, as a lawyer, a doctor, etc…).
Women have a longer life expectancy
On average, women have a longer life expectancy than men. In Switzerland, the life expectancy of a woman is around 86 years, whereas it’s approximately 82 years for men.
So, not only do women earn less than men, but they have to live longer with their savings and retirements. They will also, most likely, face extra charges for the end-of-life care of their husband and funeral, which could significantly reduce their savings.
Women’s careers are less linear
With each pregnancy, women have to move in and out of the workforce. They, statistically, are also assigned the role of informal caregiver when an elderly relative needs one.
This means that while women and men might enter the workforce at the same time, by the time they both reach their 50s, men will likely have had uninterrupted careers for the past 30 years.
At the same time, women might have worked only for 20 years total in many different companies, sometimes part-time, to take care of their children or their relatives.
This means that men might have been promoted more often and gotten more raises, thus accumulating more wealth than women and with better retirement plans.
Women have experienced job loss due to the pandemic
Worldwide, many people have lost or quit their jobs due to the pandemic. Because they either needed someone to watch the children, to become an informal caregiver, or because their place of employment no longer had the resources to keep them. However, women have suffered more from the pandemic than men in Switzerland and worldwide.
Can investing help women plan their future better?
After a few years in the workforce, most women will have enough savings to start investing.
If you start investing in your 20s, you will most likely accumulate enough wealth for a fulfilling retirement, or have savings to afford a better lifestyle, despite all of the workforce disadvantages that you will face as a woman.
All of the causes above contribute to the fact that women take longer and have a more challenging time accumulating wealth than men. So, as a woman, you might have to start planning for your future sooner and better than a man. One of the solutions to erode the gender disparity between men and women is investing.
How can investing resolve the problems above?
Women are less likely to invest their savings than men. However, they shouldn’t be afraid to start because, on average, women investors do better and accumulate more wealth than men that way. Being more diligent with the investment selection, having a long-term project, or not being impatient – all these factors contribute to their success in the market.
Steps to take to get started
There are many ways to start investing depending on your preferences and the amount of money you are willing to invest. Before even seeing an advisor or downloading an app, it is better to think some elements through.
Think about why you want to invest
The first step before investing should be thinking about why you want to do it. Do you have a long-term plan, like buying your own property or investing in your children’s education? Or do you want to make sure that you will have enough savings for your retirement? Those answers will allow you to make a proper long or middle-term strategy that best fits your needs.
How much money are you willing to invest?
You have to be sure of the amount of money you are willing to invest.
Unlike a savings account, you won’t be able to easily withdraw your money in case you have a problem and need it (depending on the investment instruments chosen). And actually, the most successful investment strategies are from people willing to invest for a long time rather than a lot of money.
Aside from the capital you are willing to put out first, what is the amount of money you want to add to that seed capital every month?
Understand your risk profile and investment preferences
Before diving into the world of investing, it’s crucial to understand your risk tolerance and identify the types of investments that align with your values and goals.
Risk tolerance varies from one individual to another and is influenced by factors like age, income, financial goals, and personal comfort with uncertainty.
Some may prefer low-risk investments like bonds or fixed deposits, which offer more stability but potentially lower returns. Others might be drawn to higher-risk options like stocks or mutual funds, which can fluctuate but offer the possibility of higher returns.
Additionally, consider your preferences regarding specific industries or types of companies.
For example, you may want to focus on sustainable and socially responsible investing, avoiding companies that don’t align with your ethical beliefs.
Taking the time to understand your risk profile and investment preferences is a foundational step in creating a portfolio that not only meets your financial goals but also aligns with your personal values.
Choosing the right investment platform
Not every company has your best interests at heart. So be careful when choosing the platform you want to invest with. Do some research on your own before going to an appointment to know if they are the right fit for you or not.
Nowadays, there are many options to allow you to get started with investment. Depending on what you’re most comfortable with, you can go fully digital with app-only services or take the more traditional approach by booking an appointment with a financial advisor. There are some services online that can offer you both app services and appointments with financial advisors.
Speak with a professional if you have doubts
If you find yourself unsure about where to start or how to proceed, don’t hesitate to consult a financial advisor or investment professional.
These experts can provide personalised advice based on your financial situation, risk tolerance, and investment goals. They can help demystify the process, clarify any confusing aspects of investing, and guide you in creating a diversified portfolio that suits your needs.
Moreover, a professional can keep you informed about market trends and changes in the financial landscape, which can be crucial for making informed investment decisions.
Remember, there’s no one-size-fits-all approach to investing, and seeking professional advice can be a wise step in ensuring your investment strategy is tailored to your unique situation.
From all these steps, there’s one that earns the trophy for the most important one: trust yourself. It’s your money, your future, and you shouldn’t have to compromise on your principles to find the best path to your future personal wealth.
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If you’re seeking expert financial guidance, Alpian offers everyone a one-time complimentary, non-binding exploratory consultation with a seasoned wealth advisor. Take this opportunity to explore financial strategies and solutions that align with your unique goals and reality.
