As the cost of living continues to rise, investing and managing your money wiser becomes even more important. Women also need to learn money skills.
advertisementIt has been found that women generally have less confidence in investing than men. This may be because they were not in a financial position to do so, or because they lacked confidence in their own financial and investment knowledge.
Investing is important for many reasons. In the long term, you need a stable income in retirement. In the short term, you'll need extra cash for emergencies, vacation money, or “big ticket items” like a house deposit or car purchase.
In the long term, investing can go a long way in beating inflation and building long-term wealth, as well as providing significant tax benefits.
Why do women invest less than men?
According to financial research firm Boring Money, January 2024 statistics show that just 19% of British women aged 25 to 44 have invested, compared to 34% of British men. From January 2023 to January 2024, the gender investment gap in the UK increased by £54bn (€63.2bn) to £567bn (€664bn).
The gender pay gap remains strong in some developed countries, with women often having significantly less disposable income than men. This means you may not want to take risks with your own money, especially if you have dependents.
According to the Office for National Statistics, in November 2023 the average salary for men in the UK was £41,850 (€48,982) and for women £28,765 (€33,667).
According to insurer Shepherd's Friendly, if a woman invested around 7.5% of her annual income between 2023 and 2030, she would save around £22,780, compared with £33,142 (€38,790) for men. The amount could rise to £26,662 (€26,662). This assumes an annualized rate of return of 3.77%.
As a result, when women invest their disposable income, they generally earn lower returns than men because they require proportionately less capital to invest in the first place. In the UK, the gender investment gap is largest in London, Brighton and Hove, and smallest in Dundee, Scotland.
Women don't necessarily see investing as a financial priority.
A YouGov survey of 1,000 US adults found that 62% of men surveyed said they thought investing was very or very important, compared to 62% of men who felt the same way. It was revealed that only 55% of women were Meanwhile, around 94% of women said saving was a priority for them, compared to 85% of men.
British mutual association Shepherd's Friendly also found that women were far less confident in their investment knowledge, at 25% compared to 39% of men. Women are also generally more likely to think the stock market is too risky for them and are more likely to worry about their portfolio performance.
US financial website NerdWallet found that around 29% of women feel more anxious about their investment portfolios, compared to 22% of men. Similarly, only 33% of women felt confident enough to make their own investments in 2021, according to investment group Fidelity.
Expert tips for women starting investing in 2024
Women looking to start investing this year face tough financial and economic conditions. Interest rates remain higher than before, which increases the cost of mortgages, and the cost of living also significantly increases bills.
It is important to do your own research on the types of financial assets you are comfortable investing in and those that can provide the best returns in the current economic climate.
Derence Lee, Shepherd's Friendly's chief financial officer, said in an email: “Take some time to learn about the different investment options available to you. Stocks, real estate, gold, and bonds are some of the main assets you can invest in.” Learning about them will help you move towards your financial goals. This will help you work on it. ”
For women who worry that they don't have enough capital or that investing will require more initial capital than they're comfortable with, Lee recommends starting small, being consistent, and investing regularly. We recommend that you do so. This is especially true as the minimum investment amount for some providers has consistently fallen to just £1 in recent years.
Lee said: “If you are new to investing, we recommend starting with a small amount of capital and gradually increasing your investment amount as you gain confidence and experience. This way, you can get used to the process and improve yourself at the same time. ” less susceptible to market fluctuations.
“Investments often involve risk, as assets can lose value over time, so it is important to keep this in mind. However, different investments have different levels of risk. Therefore, we recommend that you consider which option is best for you before committing.”
advertisementHowever, if you're still hesitant about investing on your own, it may be best to consult a financial professional or advisor who can help you create the portfolio that's best for you.
Lee said: “If you're not sure which type of investment is best for your financial goals, consider talking to a financial advisor. They can help you adjust your plan based on your objectives, risk tolerance, and financial situation. Masu.
“Consulting with a professional can also help you make sure your investment portfolio is in line with your future financial goals. Advisors can also help you understand potential emotions and concerns that can hurt your returns over time. They will be able to suggest cost-effective investment options to reduce associated costs.”
This information does not constitute financial advice. Always do your own research to ensure it is appropriate for your particular situation. Also remember that we are a journalist's website and aim to provide you with the best guides, tips and advice from the experts. Any reliance you place on the information on this page is strictly at your own risk.
