By Samantha Compton
Nothing lights me up like talking about empowering women in their financial lives! And the older I get, the more passionate I become. When this topic comes up, I begin talking with my hands, my voice volume turns up a notch, and my energy level jumps. It’s a hot-button topic for me! But it wasn’t always this way. That is WHY I am the way I am today!
The story of this later-in-life passion started with my ignorance and lack of confidence in finances, especially long-term finances. At almost 40 years of age, I found myself divorced and seeking a new career after being a stay-at-home Mom for many years. I didn’t have any retirement savings of my own, and suddenly I heard the retirement clock ticking and getting louder every day. It felt overwhelming to think that I only had about 25 years to “make up” time and build a nest egg of my own. I certainly didn’t want to depend on finding a new husband.
Part of the overwhelmedness came from the awareness that I knew nothing about my options for investment accounts, not to mention the actual investments those accounts might contain. I didn’t even know what a mutual fund was! I was at ground zero, and the knowledge I thought I needed to gain loomed in front of me like a mountain.
Here are some of my thoughts, concerns, and belief at that time in my life:
- I don’t know enough to begin investing.
- I don’t have enough money to start investing.
- I need to know when to buy and sell, or I won’t succeed in investing.
- I don’t know who to trust to ask about investing.
- I might get taken advantage of or look stupid if I try to talk to someone about investing.
I find that most women relate to these insecurities.
When they hear the word “investor,” they think of a man in a suit with a briefcase. Most women do not picture themselves as confident or competent “investors”!
However, would it surprise you to know that when women DO become investors, they are often more successful than their male counterparts? In fact, women tend to be:
- More committed to an intentional investment strategy and willing to give it the time needed to grow
- Less likely to make emotional decisions about their investments, whether the market is up or down
What are the differences between the first group of women I described above and those I just now described as successful investors?
Often, there are only a few but scaling a mountain of knowledge about all the ins and out of every investment option isn’t one of them!
The most significant difference is:
The women who have become successful investors, at some point, began believing that they can learn what they need to know to be successful!
If you want to step into the world of investing and grow your confidence as well as your financial accounts, I recommend these action steps:
- BELIEVE THAT YOU CAN LEARN ANYTHING YOU NEED TO KNOW! This is KEY!
- Get an understanding of your overall financial situation. What money is for emergencies, what money is for bills, and what money is available to invest for your future?
- Figure out where you want to end up. What are your goals? (A good financial advisor can usually be quite helpful in helping to create a long-term financial plan.)
- Determine how many years you have before you’ll need to access the money you consider investing. Ask yourself how you will feel about any fluctuation in the value of those investments between now and then.
(This information will be necessary for determining how much risk you will take in your investment portfolio.)
- Develop a basic understanding of how stocks and bonds work. It should be fundamental knowledge and general in nature. How do they “earn” money or grow in value over time. Simply reading a book about the basics of investing, or you can look for an online course or podcast that educates on these things. It bears repeating. Keep it simple!
- JUST BEGIN! If you have a retirement savings account available to you through your employer, that is often the best place to begin investing! Many of these plans will offer a “retirement date fund” that will allow you to automatically invest at a level of risk that correlates to the number of years you have before retirement. (If you don’t have a retirement account available through your employer, or if you are unemployed or self-employed, then talk to your tax professional or a financial advisor to see what savings options and accounts would be best for your situation.)
As women, we are almost always thinking of investing our time and intentions well into our marriages, children, friendships, and communities. I hope that we, along with our daughters and granddaughters, will continue that investment of all types, including “confident financial investor” to the list!
