As part of our Changing the Conversation: Empowering Women in Leadership series, we decided it would be valuable to take a closer look at the relationship between women and their finances. It’s no secret that women aren’t investing at the same rate as men. While women are financial powerhouses, often acting as primary decision makers over household finances, and controlling a significant portion of the world’s wealth, we still don’t trust ourselves when it comes to investing.
To gain a better understanding of why women shy away from investing, and how we can step up our financial games, we hosted a webinar in conjunction with Cameron Hume, VP Direct-to-Consumer Channel at BlackRock. Hume presented an informative webinar, guiding viewers through the different barriers that stand between women and investing, and ways to break those barriers.
A few key takeaways:
- Before you start investing:
- Know your investing goals. Women are especially goal oriented. Know why you’re investing, and what you’re building towards (eg., college fund, buy a house, pay off student loans).
- Consider your “Time Horizon.” Are you investing long term (eg., for retirement) or is this a short-term endeavor (maybe you want to buy a car, or take a trip)? Your timeline will impact your investing strategy.
- Identify your level of risk tolerance. As we’ve all heard, women tend to be more risk averse than men. Not all investments were created equal! Some investments are safer than others. Know how risk tolerant you are, and this will help guide your investment decisions.
So how can we build our wealth? Hume advises that you take the SMART approach: Specific, Measurable, Ask, Realistic, Transparent. By defining a:
1. Specific goal in your wealth-building endeavor, you can
2. Measure your progress towards reaching it, and
3. Ask the necessary questions to help get you there, while maintaining
4. Realistic expectations, and staying
5. Transparent with trusted advisors (could be friends, family, or financial advisors) to help hold you accountable.
A few additional suggestions Hume offered on building wealth:
1. Volatility is normal. Markets are cyclical, so you can anticipate that they will drop and return periodically. Do not panic when that happens, just account for it.
2. Diversify your portfolio.
3. Redefine how you think about cash. Cash should cover your immediate bills, and you should have some emergency money (think: next 6-18 months). Beyond that, you should feel comfortable and safe investing a portion of what’s leftover, rather than holding your entire portfolio in cash.
4. Evolve your plan. Life is dynamic, and your investment strategy should reflect that. As your circumstances shift (i.e., change job, start a family, buy a house, retirement, etc.) you should re-evaluate how you’re investing your money.
Finally, Hume left us with a few great resources to continue our financial education:
To stay informed of our future events (both in-person and webinar!), fill out the below form. Our next Changing the Conversation event will take place the evening of Thursday, October 26th, and we would love to see you there!