When the Planto team asks our female users about what they are doing to achieve their life goals, 70% of our female respondents say
“I want to invest, but I don’t know anything about finances!”
Multiple studies have also been done which reveal that women tend to be risk-averse when it comes to investing.
Ellevest, an investment platform for women, conducted a study which showed that 70% of assets controlled by women are left in cash and not invested.
According to Merrill Lynch, 41% of women wished they invested more of their money.
So ladies, what can we do to overcome our fear of investing and thrive financially?
With International Women’s Day, let’s take a look at the steps we can take to get in the driver’s seat for our finances and make our money work for us!
Allocate a fixed part of your income to investments
Don’t wait until there is “enough savings”. Experts have advised using the 50/30/20 principal when allocating a budget.
You should keep your needs at 50% of your income, self-care at 30% and the remaining 20% should be a mix of savings and investments.
Don’t be scared by the complexity of investments, start simple.
Consider going for a low-risk time deposit to get a higher than normal returns from your savings account.
If you want to try investing in the market, go for a robo-advisor like 8 Securities or Aqumon. They can manage your portfolio at a fraction of the cost of a human advisor. These services still have a personalized touch to it as the portfolio is constructed based on your risk appetite and time horizon.
But if you prefer having a human guide you, there are a lot of financial advisors out there to choose from.
On a side note, although not really an investment option in a traditional sense, if you have an MPF, you’ve technically started investing already!
Understanding your MPF portfolio(s) and their performances is a great way for you to adopt some investment skills. It is also incredibly important for you to manage it well because of the impact it has on your retirement!
Tame your fears and be confident
Sometimes, we get caught up about what other people say about what is the right strategy and doubt ourselves. However, the truth is women are better at investing than men and can do well following their instincts.
Alpha males may rule Wall Street but women quietly achieve better results.
Due to the cautious nature of women, our tendencies to look for long term stability and our practice of seeking advice from professionals when needed has led us to be better investors.
Men, on the other hand, tend to be overconfident about their decisions and more likely to actively trade stocks which leads to over-trading which dilutes performance.
According to a study by Fidelity, women outperform men in investing by 0.4%. At first glance, this may appear to be a minor difference but can have a long term impact given women also save more than men.
Join ladies who have the same goals
Support systems are important. Find like-minded people who you can share your goals, challenges and concerns!
If you are interested in finding a place to get holistic financial education, Heels and Yield is the perfect place for you.
If you are looking into investing with a social impact, try Moxie Future.
The New Savvy is also a great place if you want to gather with women to and share thoughts and advice on how to manage finances better.
There are many other organizations in Hong Kong that are focused on female financial empowerment and they frequently hold events to gather, especially during International Women’s Month!
So what are you waiting for? Do your research, trust your gut, and get started. When you see how much your savings can grow, you’ll regret not starting earlier.
Investing is less intimidating than you think - Happy International Women’s Day!