Investing in our health and our relationships are just a few areas women tend to hone in on. But what about our finances? While our male counterparts often plunge into the stock market upon entering the workforce, women typically stay on the sidelines. But evidence shows women not only have the power to, but often do, outperform men when it comes to investing. Plus, investing can exponentially set us up for a solid future that isn’t riddled with money woes.
This is something the folks at Reliant Investment Management know well.
Through proper goal setting and consistently saving money that can compound into a steady stream of wealth for later years, Reliant believes every woman can set themselves up for financial success — even if they don’t know the first thing about investing.
With more than 160 years of combined experience in custom portfolio management, the Reliant team put together these three reasons why they urge women to take control of their finances and develop a plan to start investing their hard-earned money today.
3 Reasons Women Should Invest
1. Longevity: Women tend to outlive men.
Multiple studies show that women tend to live longer than men and, as a result, they have to be prepared for the financial responsibilities of supporting themselves longer. “Those expenses include the rising cost of healthcare, insurance and other things that come along with living longer,” says Emily Dafferner, CERTIFIED FINANCIAL PLANNER™ at Reliant. “The average U.S. woman is actually widowed at 59.”
By developing a plan early — oftentimes early on in marriage — women can set themselves up for less stress in their later years. Life expectancy, Emily says, is something to strongly consider when mapping out an investment plan. “Hiding money under the mattress or simply holding the funds in cash in a bank account won’t keep up with the cost of inflation,” she adds. “It’s so important to take a long-term view and a long-term orientation to investing.”
2. The Power of Compounding
The earlier you start saving, the better. That’s a mantra every woman should live by when it comes to money management. “The reality is that time marches on, and you can’t get it back,” Emily says.
Saving and investing your money early begins the compounding process. When you graduate college at the age of 22, Emily says, whether you’re married or single, you should begin saving a portion of your paycheck. “Time really is your friend when it comes to investing,” she says. “The longer you can invest, then the greater the return will be.”
If your company offers a 401K savings plan, then you should take advantage of it and contribute at least as much as your company matches, Emily advises. “That’s like free money,” she says.
Another advantage of saving a portion of your paycheck before it hits your bank account is that it omits the temptation to spend that money. “You almost don’t even notice that money is gone,” adds Reid Wesson, CFP® with Reliant. “You learn to live with what you have.”
3. Women are Generally Better Investors
Patience and keeping a long-term view are two qualities that tend to make women great investors. “Because men are generally more risk-seeking than women, a woman’s investments are more protected than a man’s,” Reid says. “A man is much more exposed to greater losses than women are, and that makes a difference.”
Creating a plan to save and seeing that plan through — even when the markets are unstable and life happens — is a huge hallmark of investing wisely, Emily says. It’s a mindset that can set women up for massive success (and peace of mind) in the future.
What to Do Now
As the economy becomes increasingly more global, it’s more important now than ever to be financially responsible and invest your dollars. The first step to ensuring your money is protected, growing and working for you is to develop a plan. Seeking an expert to help map out your investment plan is a great place to start, Emily says. “Have a plan and know how you’re going from A to Z,” she says. “Because it doesn’t just happen overnight.”
Having a team that keeps an eye on the markets and has years of experience is always an advantage when it comes to investing. For the folks at Reliant, their number one goal is to keep a pulse on the market and know how to best grow your money so you don’t have to stress about it.
“We are financial professionals. It’s our job to watch the market. It’s our job to know what’s going on and know what will impact people across the board,” Emily says. “It’s important to have someone you trust to do that for you because it allows you to be free and live your life.”
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