I’m excited to partner with Ellevest to start this conversation about women and money. I may receive compensation if you become an Ellevest member.
Today’s post is Part 2 of the 2-Part series on Investing. In Part 1 of the Investing series, we talked about how you can fund your investment account. However, there is another step that has to happen. Once you identify where the money to fund your investment account will come from, you will also need to take the next step of opening an investment account and then funding it. Sometimes it is easier to come up with the plan than to actually take the next step of putting the money into the account. Putting money into the account can invoke feelings of fear like:
- Do I know enough?
- What if I lose the money because the stock market crashes?
- Will this work?
- What if I put the money into the account and need it later?
In this post, we will be discussing the biggest money mistakes women make. I believe this topic is important because a common financial goal moms tell me that they have is a desire to invest. They desire to invest to grow their finances and help build financial security for their families. However, many are stuck because they don’t know where to start or don’t know if they know enough to get started. It is important to know where there may be fear around investing or mistakes we can possibly make in investing. This way if we understand the fear around investing we can feel better prepared to navigate that fear and eventually become more secure around investing.
I’m partnering with Ellevest to help answer some of these questions and concerns I hear from moms about their investment barriers so they can be encouraged to know they can actually invest and be successful.
To help you to understand how to jumpstart your investing goals, I wanted to share the perspective of Ellevest CEO & Co-Founder, Sallie Krawcheck on the biggest investing mistakes women make. Sallie Krawcheck is uniquely qualified to talk about this topic because, “Sallie has led Merrill Lynch, Smith Barney, and Citi Private as CEO, and was called ‘The Last Honest Analyst’ by Fortune Magazine and one of Fast Company’s ‘Most Creative People in Business.’” Her life’s mission is to help women to reach their financial and professional goals. Here is what Ellevest CEO & Co-Founder, Sallie Krawcheck had to say:
There are a lot of articles out there about mistakes investors make. They typically include overtrading, panicking in down markets, falling in love with winners. Those are the biggest mistakes that men typically make. The biggest investing mistakes we women make, it’s basically one mistake. We don’t invest as much as the guys, and it can cost us a fortune over our lives. But why?
Reason Number One
I hear, “We believe the stock market’s too risky.” But without risk, there’s no opportunity for investment return. That said, historically, since the 1920s, the stock market has returned 9.5% annually, even with ups and downs. It’s a lot more than you get by leaving your money in the bank. And, by the way, investing is not just investing in the stock market. At Ellevest, we recommend investing in a diversified investment portfolio, not just stocks only.
Women tell me we think we have to know everything before we invest. Nope. We don’t. Thinking that we do is very expensive.
Reason Number Three
We’re busy, so we wait. We wait because we think the market is too high. We wait because we think it’ll take a lot of time. We wait because we have a lot of stuff going on. The longer we wait, the more it can cost us. Wait a decade, which is not unusual, we estimate that if you’re making $85,000 a year and wait a decade to invest, historically, that could have cost you $100 a day.
I hope that this post has given you hope that you can do it. One of the things that
I remember when I first started investing while I was in my first job out of grad school. I was afraid at first. I was afraid that I would invest money and need it later. So I adjusted my spending to allow me to invest, I started off slowly, and I didn’t invest money that I couldn’t afford to lose (i.e. money for my living expenses). Then as I grew more confident and better able to manage my new budget, I grew my investing. It didn’t happen overnight, but it was important to just get started. Therefore, go at your own pace. This is your journey. You can do it!
Aisha Taylor is a single mom of twins, personal financial coach, work from home entrepreneur, and #1 Amazon Best Selling Author of the book “5+5 FNPhenomenal Ways to Save $100 This Week Without Killing Your Lifestyle.” Aisha has been featured in ESSENCE, Jet Magazine, and Black Enterprise. She is also the Founder of FNPhenomenal (Frugal –n- Phenomenal), a movement designed to help single moms create a vision for their lives, craft a financial strategy to support that vision, and show them that phenomenal living is possible. It’s time for you to be Financially Phenomenal!
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