Many women today are balancing several priorities: career, family, friends and other obligations. Often, investing gets lost in the shuffle, meaning women may not be ensuring that the money they’ve worked so hard to earn is working hard for them.
Our research in the U.S. found that only 4% of women spearhead their family’s investment strategy.1 Among affluent women, 80% consider themselves “beginner investors,” compared with 50% of men.
One would think it might be different for younger women. It’s not. Only one in eight Gen Y women (born 1978–1988) call themselves the primary decision maker when it comes to personal finance. And only 9% are confident about managing investments.1
And yet 90% of women will have to manage their finances on their own at some point in their life.2 They may leave the workforce to raise young children or care for a sick family member, become divorced or find themselves widowed.
So how can women take control of their financial future?
Kathy Murphy, President of Fidelity Personal Investing in the U.S., shared the following five tips at a Fidelity event on empowering women. Feel free to share them with women you care about – your mother, daughter, sister and friends.
1. Believe that you can.
Says Murphy, “Attitude is everything. That’s a sign I have in my office, and it certainly applies here. Investing can seem intimidating, but it’s not hard. It’s all about setting goals, creating a long-term plan and sticking to that plan. These are things women are especially good at.”
2. Talk to family and loved ones.
“Money shouldn’t be a taboo subject,” notes Murphy. “If you’re married or in a relationship, don’t defer all financial matters to your partner. You don’t need to be equally engaged if you don’t want to be, but you should have regular conversations – annually at the bare minimum – and establish a core understanding of your savings, investments and goals.”
3. Keep learning.
“Here again, women are good at this,” says Murphy. “Access the resources around you to set your long-term goals, invest your money against those goals and watch it develop over time. Once you’re educated and involved in your investment plan, don’t let daily fluctuations in the market rattle you. If your instincts tell you to get more help and information, do so. Work with a financial advisor to understand the investments you own or that you need to add to your portfolio.”
4. Get started early.
Starting at age 25 and saving $50 more per month in a Registered Retirement Savings Plan (RRSP) could net you hundreds in additional pretax retirement income each month. “Waiting until you are 35 reduces that additional monthly income almost by half,” explains Murphy. “Really, it’s a simple formula: the earlier you start investing, the better off and more confident you’ll be. Put that hard-earned money to work for you.” But don’t get discouraged if you’re starting to save later in life! Talk to your financial advisor about building a practical retirement plan designed to meet your unique needs.
5. Make “it” a priority.
Murphy concludes, “By ‘it,’ I mean ‘you.’ Women work hard for their families, for their advancement, their progress; they work hard to live the life of their dreams. Make it happen. See it through. Take control of your dreams by taking control of your finances. You deserve it!”
Good advice is a great idea.
Regardless of your financial situation or level of investment knowledge, Fidelity believes that working with a financial advisor can have a significant positive impact on your wealth – and your piece of mind. Whether it’s being better prepared for retirement or creating a successful savings plan, research shows that having a good relationship with your financial advisor can help you realize your financial goals.