Top Reasons Why Women Don’t Invest
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Top Reasons Why Women Don’t Invest
What stops women from investing and the reasons why.
When it comes to women and investing, there is a mystery of why women are less likely to invest in the stock market than men. Today, women are more independent, earn good money and have access to all kinds of services, information, and education like never in the past, yet very often stick to cash savings.
So, what are the top reasons why women don´t invest?
Reason #1: Women are generally more risk-averse.
There is a common perception that women are somehow more risk-averse than men. And it makes sense. One of the key investing differences I see between men and women is the end goal of investing. The answers from women tend to lean towards long-term financial security for themselves and their children.
This seems to come from our instinctive desire to take care of people around us, which in turn may cause taking less financial risks than men. Many women believe that investing is very risky and thus they never start with it.
Reason #2: Lack of confidence and knowledge
Another reason is that women don't feel confident enough to put their money in the market. Why? Because of their lack of knowledge. And that’s so true.
I didn’t want to invest my hard-earned money into something I don’t understand. And because I felt I didn’t have enough knowledge about how investing actually works, I just kept my money in my savings account.
Busy work and family life take a lot of time in women’s lives. Sometimes there is not enough time to educate ourselves and that results in a lack of knowledge and understanding of investments. But also it’s not a secret that the field of money and financial management is male-dominated which causes some women to avoid investing.
The good news is that there are more financial advisors and educators who cater to female clients.
Reason #3: Fear of Losing Money
“I’m afraid of losing my money” is the most common answer I receive when I ask my female friends. So, they keep all their money in a savings account.
It's understandable to be worried about losing money in the market, but it's almost impossible to accomplish most financial goals unless you invest.
Investing doesn't have to be scary. Understanding how money works and learning investment strategies to safely and securely grow your money are practical steps to overcome your fear. Then, it's not hard to build a safe and balanced portfolio that performs well over time.
Reason #4: The Gender Pay Gap
Despite improvements in the gender pay gap, it is still true that women earn less than men. For example, women in the Czech Republic earn on average 16.4% less than men. And when women earn less throughout their working life, this generates less space for investments.
When there isn’t enough money left over, thinking about investing in the stock market may not be on your priority list. A common phrase I hear about investing: “I’m going to start investing when I have the money to invest.” I’ve heard this from many female friends who believe they don’t have enough money to start investing.
Getting started with investing is the hardest part but you can start even with just a little money. My first investment was just a $45 stock purchase.
Six months later, this is my investment portfolio and I don’t fear losing money.
