Investing for Women: Fighting the Odds

Ellevest Review 2019

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Patriarchy, a belief system where men assume the role of the head of the families. Scholars of Sociology will tell you that Patriarchy has been the default order for most societies of the world since time immemorial.

Biased against Women is Institutionalized

You will be stunned to know that women were not entitled to inherit or own property until the mid 19th century, imagine the plight of women till the medieval period.

Although the western feminist movements have gained momentum over the last few decades. They have also amassed enough success for us to get complacent. However, women continue to remain held back in a lot of ways.

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Even in 2019, we see that gender biased still has its roots deep in the economic structure of the society. Patriarchy institutionalized gender-bias and from it stemmed unequal pay, pink taxes and more importantly investing for women is still unchartered territory.

Women and Investment don’t go hand in hand

According to Ellevest, an investing platform for women and by women, of all the assets that women own, 71% of it is cash. This also translates to the fact that women have their reservations against investing. On top of that, studies suggest that women do not start investing in their youth.

Most women don’t think they know enough about investing to properly grow their savings; therefore, they wait to start investing until they feel they’re more financially stable and believe they can risk the possibility of losing money.

A common misconception around investing is that you have to be an expert in the industry to succeed when the reality is that there are so many tools and resources that make easy to start investing with as little as your pocket change.

A great majority of women think that they are not acquainted with how the market works and as a consequence, they do not start investing until they become financially stable.

They feel that becoming financially stronger will give them more resilience towards uncertainties and volatility of the market.

Most women don’t invest because they think they are supposed to be the master of this trade before they could earn money on their investments. The truth, however, is in stark contrast to this belief.

There are many tools available in the market today which guide you through the process of investing and let you invest as much as you wish/can afford.

Why should women Invest?

1. Gateway to Financial Independence

In the face of hostility and bias which women face across the globe and in different facets of life, investment is the best option to resurrect the financial status of a woman from the rubble.

Amid the prevalent issues like the gender pay gap and pink gap, investing becomes the lender of last resort for women to amass wealth equivalent to that of men.

2. Means to achieve your Financial Goals

Whether you are planning to tie the knot or round off your travel bucket list, everything requires a huge chunk of money. Investment is the only avenue which can make your money grow at a staggering rate in a relatively short span of time.

3. Saving for the Golden Years

According to a study by CNN, women earn 80 cents to a man’s dollar, courtesy gender pay gap. This also translates to the fact that if women save the same percentage of their earnings for retirement, they will have less money as compared to men amid retirement.

The irony is that women tend to live longer and lesser savings means they would be strapped for cash during their not so golden years.

Savings account compared to Investment

Cash that you deposit into the Savings account gives you decent returns annually. However, when these returns are compared to passive investing (creating a mixed portfolio and benefiting from market returns), investment wins hands down.

Women show a lot of promise in Investing

Despite the fact that women’s rendezvous with investing is not a very popular concept, women are actually good investors.

Men are a bit too adventurous when it comes to investment. They aim the celestial peaks even if it means falling down harder. Women are more balanced in their approach; even if they exhibit relatively low risk-taking, they place their bets on the safest horse in the derby.

Investing for women is all about choosing the right strategy

Investing strategies go a long way in deciding your success as an investor. Whether you are able to meet your financial goals from your ventures or not, depends on a whole lot extent on the strategy you choose.

Apparently, most of the investing tools available in the public domain hinder the earnings for women.

Ellevest did a study where a man and a woman both started saving at 30 yrs old, earning $85000, investing 10% of their salary over until the age of 67.

The study found out that the women’s career peaked at 40 whereas men’s salary peaked at around 55. Moreover, women took long career breaks.

The study also found out that women tend to earn $320,000 less by the time they retire based on average market returns.

These difference should be considered while defining your goals, retirement plan, and investment strategies.

Conservative vs. Aggressive Investment Strategies

Investing strategies are broadly categorized into two main categories: aggressive and conservative. An aggressive strategy will allocate more money to volatile markets and stocks. Conservative strategies will put more money into bonds and other passive accounts.

Aggressive investment is like baseball sluggers, who swing for everything and anything but they involve heavy risk. By contrast, conservative investments are like contact hitters who are happy to receive singles.

Your investment strategy could be a hybrid model. The point is that it should align with your financial goals, risk tolerance, and timeline.

Further, your investment strategy is not inscribed on stone. As your financial needs change, you may choose to pull out of your accounts and not wait for the market returns to mature. It’s critical to readjust your priorities and the amount of risk that you take.

Bridging the gap

Even though there has been a considerable rise in the number of women investors, a big gap still persists between the number of men and women in the market.

As a woman, you have got to ensure that the fiduciary you choose crafts its services in a women-friendly way and knows the nitty-gritty of the challenges that women face in the investment market

Further, inquire whether the platform that you choose to invest in pro-women companies. The women-friendly platform may not fetch you huge returns at an early stage, however, in the long run, their pro-women fabric will help you gain financial equity in the long run.

Ellevest has come a long way in empowering women and curbing financial inequality. Ellevest does a lot of women-specific investment research.

They have content about the gender pay gap, how to invest responsibly, how to negotiate for a raise, and every financial topic in between.

Ellevest has got a reputation for creating an investment plan which is in sync with their financial needs across different phases of life.

You don’t have to be their client to get a customized investment plan made for you. However, if you want an end to end assistance for your ventures/investment, you may have to pay a fee which varies on the level of assistance that you need

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