By Rhea Cartwright
o quote the modern scholar that is ahem Cardi B, “I like morning sex, but nothing in this world that I like more than checks.” And yet, as a woman, talking openly and honestly about money is much like talking openly and honestly about sex - it often feels taboo.
Much like many other women I know, I love both things in abundance but the huge gender-based knowledge gap when it comes to financial literacy and investing is affecting the progression of women worldwide.
Prior to 1975 with the introduction of the Sex Discrimination Act, it was still legal for banks to refuse women mortgages without a male guarantor and yet despite women having the most financial freedom of all time, the gender money gap is still ever-present.
The gender pay gap isn’t improving either - in fact it’s getting worse. According to the latest study carried out by The Financial Times, women were paid 87p for every £1 paid to men in April 2020. This gap widens and compounds further when considering that only 26% of millennial women are investing, compared to 43% of men of the same age.
Lower salaries ultimately leads to less money invested into pensions, ISAs, stock and shares or property which all contribute to long-term wealth. Instead, many opt for poor returns from a savings account. With the UK inflation rate considerably higher than the average interest of a savings account, by keeping all of your hard-earned money in cash, you are losing money. The “rich get richer” isn’t based on greed, it’s because those with wealth are guided by experts on how to access and grow their money even further.
Many women find that investing platforms and financial products are often marketed towards men whereas women are targeted with messages to “save” instead. The unavoidable truth is that women have historically and purposefully been locked out of the proverbial billionaire boys club for centuries.
Husbands, boyfriends and in some cases fathers, have taken the financial reins which have left women in the dark about not only how to navigate their own financial future but stifles any knowledge they can then pass on to their own children. Sure, it’s great we’ve all been taught our grandmothers’ secret recipes but I’d love it if she had also been able to tell me how to capitalise on a tax-free investing portfolio, too.
Money might not bring happiness but it does bring power and women’s economic empowerment is central to achieving women’s rights and gender equality. With more money not only can I buy a nicer table, but I can also buy a seat at someone else’s too.
As a mission-driven woman, like many of you reading are too, I work hard and I want my money to work even harder. I don’t come from an affluent background. I grew up happy but watched my mum struggle. I vowed to create generational wealth to support those around me and I can unashamedly say that I want to be rich. Investing plays a leading role in my financial future. Like exercise or meditation, it’s a lifelong journey but here are the crucial learnings I’ve made along the way.
It’s never too late to start
The best time to start investing is now, no seriously - NOW! The sooner you start anything in life, the sooner you become more comfortable and confident with it. Investing is no different and any seasoned investor will say they wish they had started sooner. The reason why? A beautiful little thing called compound interest which is the concept of reinvesting the money you’ve earned from your initial investment, which can generate huge growth over the long term.
There is no perfect amount to start investing with
As with any investment, the main rule is to not put in what you can’t afford to lose, but knowing how much to start with is hugely personal and the only right answer is the one that makes sense for you. With modern app-based investing platforms you can start with as little as £10 but it also depends on what you want to invest in. If you wanted to get started in property, for example, you’ll need a much larger initial investment.
A great place to start is to give yourself a financial audit first. Look at your current fixed costs and financial habits and see how much disposable income you could have leftover each month and decide on an amount to invest which doesn’t leave you stretched.
Risk appetite matters
Nobody, not even a leading financial analyst, can 100% predict the future and some investments are considered riskier than others. Knowing your appetite for risk is crucial to shaping your investment strategy as portfolios regularly go up as well as down. Your personality type often plays a role as some people find it too stressful seeing their money go down with market fluctuations. You also need to consider your investment timeframe and what you want to achieve. Cryptocurrency may have huge returns but it is hugely volatile whereas a fund, such as the S&P500, has far more stable returns.
You’ll become a pro at financial jargon
Do you have diamond hands or paper hands? Are you going to HODL? Do you know your NFTs from your ETFs? The financial world has its own set of vocabulary, acronyms and jargon. As you begin investing, your vernacular will change and you’ll probably quite enjoy it. Your best friends and your mum might not have a clue what you’re on about at first, but they’ll be joining you as you guide them too.
Financial freedom looks different on everyone
For some it’s sending their children to private school for others it may be buying a daily coffee from Gails. Although our starting points and end goals are all unique, the opportunities for growth are present to all of us. Once you begin investing, you’ll truly question why you didn’t start sooner. Watching your money grow and allocating that profit to different areas of your life is a marvel to watch.
There isn’t a finish line
Investing never ends and your goals will evolve as your life unfolds. From ISAs to luxury handbags, there are a plethora of options to start investing and more will surely be on the horizon. Consider that pre-2009, Bitcoin didn’t exist and now digital currencies are worth over $2.49 trillion. Your investment knowledge will also keep growing as you’ll want to educate and empower yourself on how to make your money work even harder.
Disclaimer: Nothing in this article is financial advice and anything stated is for educational purposes only.
Rhea Cartwright wants us to maximise our money
By Rhea Cartwright
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