Happy Good Money Week!
The week-long campaign to encourage sustainable, responsible and ethical investing is here, and this time things are a little different.
Men have dominated the financial services world since its inception. Good Money Week want to change that. So this year, it’s all about addressing the gender investment gap.
Study after study shows women are most likely to care about whether their funds are invested ethically, yet they are less likely to invest compared to men – causing a huge investment gap, particularly when it comes to pensions.
Don’t believe us? Take a look at some of these stats taken from Good Money Week’s Women’s Guide to Investing:
“[There is] a huge difference in the size of pots for men and women. Men have on average saved £73,568, three times the £24,869 held by women, highlighting the need to focus on addressing this worrying gender divide.” Aegon UK, April 2018
1 in 5 (19%) women find personal finances more awkward to discuss than periods (17%), salary (16%), mental health (14%) and sexual orientation (10%).
Personal finance came second only to sex life as the most awkward discussion topic in our public poll for good money week 2018
45% of people don’t think there are good financial female role models, or can’t name one.
A moxie future survey of 2500+ women found that 83% care where their money is invested.
Good Money Week’s ‘Who Fund the World?’ theme aims to encourage and empower women to act upon the investment gap concern, and highlight women’s potential impact on the planet and society through their financial behaviour.
Not sure where to start? Take a look at these top tips from Clare Francis, Director, Savings & Investments, Barclays & Emilie Bellet, Founder, Vestpod...
1. KNOW YOUR GOALS
Emilie: Are you saving for retirement 30 years away, a holiday home 10 years down the line, or your wedding or kids’ university fees 5 years from now? Once you have it clear in your own mind, you’ll find it easier to make the right decisions about when to start moving your money, and when to leave it alone. And when to invest versus when to save.
2. BEFORE INVESTING, CLEAR OUT ANY HIGH-INTEREST DEBTS.
Clare: Look at your debts and check what rates of interest you’re being charged. Then aim to pay o the most expensive debts rst. This will put yourself in the strongest financial position possible when you’re ready to start investing.
3. WHAT CAN YOU AFFORD TO LOSE?
Emilie: The global markets do not come with a cast-iron guarantee, and as we all know from 2008, things can change overnight. Saying “don’t bet what you can’t afford to lose” might seem a bit silly, because, hey, who can afford to lose ten grand!? But really think about it: could you actually survive if you did lose that money? Would you lose your home or just be very, very cheesed off?
4. CREATE A RAINY DAY FUND
Clare: Build up a rainy-day fund of easily accessible cash savings before you consider investing. The stock markets should perform better than cash over the longer term, but there is risk involved and a chance that you could lose money. This is why it’s really important to have some cash savings that you can dip into when needed, leaving your investments to grow for longer term goals.
Emilie: There’s no point investing in the stock market for a year then taking your money out. This is a long game. Or at least a very mid-game. If you’re prepared to say goodbye to your money for a decade or more, you’re highly likely to have a nice surprise at the end of it. Or at least not a horrible surprise.
5. GET INVESTING - YOU ARE PROBABLY BETTER AT IT THAN MEN
Clare: While fewer women than men are investing, the numbers are increasing and it seems to be something women are quite good at. We are often producing higher returns than men!
Barclays tracked the performance of 2,800 Smart Investor customers over a three-year period and found that female investors achieved
annual returns that were on average 1.8% higher than the men. And one of the main reasons for this difference is that women tend to hold onto their investments for longer. So rather than regularly moving money around for short-term wins - when there’s a higher chance we’ll get it wrong – we are more likely to leave our money alone and ride out share price dips and periods of volatility, in the hope that over time, our investments will rise in value.
Emilie: Fun workshops and supportive communities like Vestpod can really help if you want to keep learning and see what other women doing.
When women invest, the world wins. Follow Good Money Week on Twitter, Facebook and Instagram, sign up to their newsletter and get more women investing #GMW18 #WhoFundTheWorld