When it comes to finance and investment, research shows that women are much less confident than men. Although most women realize that they are responsible for their own finances at some point of life, unfortunately women are less knowledgeable on investment and finance. According to The Global Financial Literacy Excellence Center report last year, only 38% of women (versus 55% of men) correctly answered a simple question about interest rates and inflation.
Good thing is that study also shows ~90% of women said that they wanted to started learning about investment and money. In Simple Wealth For Women, our goal is to provide support for women to gain confidence in learning finances and money management. Here are 3 steps that can help jump start your financial management journey and conquer your fear of investing:
1. Overcome stereotype that men are naturally better at math and analysis than women
In 2005, Elizabeth Spelke, PhD, a psychologist at Harvard University, and colleagues reviewed 111 studies and concluded that that men and women on the whole possess an equal aptitude for math and science. In fact, boy and girl infants were found to perform equally well as young as 6 months on tasks that underlie mathematics abilities. Other studies have suggest that when it comes to math, girls and boys are similarly capable. A 2008 analysis by Hyde and colleagues reported that in children from grades two to 11, there was no gender difference for math skills.
Despite of such evidence, some women still hold stereotype that men are better at math and finance and women should step back at this subject. Such thoughts normally prevent you from pursuing the knowledge and consultation on your own finance management. If you truly understand that you can and will succeed, just as men, in your own fate on finance, you will gain more confidence and willingness in taking the steps.
2. Understand taking some risk can bring reward to your wealth
We all know well on the trade-offs between risk and return. Building a better wealth also can mean sometimes we take some level risk to gain the better return. The more planned to the rest part of your portfolio as mentioned above, the higher tolerance of risk you can make.
Taking risk is not a bad concept, in fact, it is necessary in your life. Almost any decision you make involves risk including not making any investment. Understand taking some risk is the way to get your life rewarded so long as the risk is taken under your best judgement and education. Be disciplined and learn to control the risk can bring some wonders.
3. Start investing small
It does not take big money to start building your wealth. You can put your investment knowledge to use by starting really small. Research on some stocks that you are familiar with, or a mutual fund with great and consistent fund management and low expense ratio, you will see how your wealth being built up. Each small step helps to gain your confidence. I will start introducing the key elements you can watch for stocks and mutual funds to help you build up your knowledge in my blog.
Don’t be afraid of investment. Instead when you don’t invest, you are losing big money as a price. Investment might sound scary to you at first, but not having financial freedom and confidence in your life, stuck in a life style such as bad boss, crappy apartment are just worse, isn’t it? Bottom line is that you can make a difference and you are capable of doing it.
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