I will release my fourth white paper in the Rich Thinking series of research on women and finance on March 8, International Women’s Day. It’s called “Getting Started: advice, ideas and stories from smart women on learning to invest.”
As in past years, accomplished women weren’t shy and offered frank and practical tips. Many women said that before you even think about getting started, you should figure out why you are investing in the first place.
Here are their top five reasons for investing:
1) Focus and get control of your life
If you don’t start thinking about money when you’re young, it’s easy to get trapped into living beyond your means. Everyone needs to understand their financial situation in order to decide how much to spend, how much to save and how much to invest. Be deliberate about your priorities. As one woman explained: “I wish someone had told me to start saving when I was 25 years old when I first started drawing a full-time paycheque. I spent everything on clothes and restaurants — what a waste. The sooner you start saving and investing, the sooner you can buy something substantial.”
2) Become financially independent
It isn’t wise to rely on others for your welfare. It makes sense to build your own nest egg while you can and take care of your own financial health. As one woman in Israel said: “I like to mentor younger women and I explain why it is so important for them to have their own job. Don’t rely on other people. No one! You need to build yourself up while you can. It doesn’t matter what you do for work, you should be able to control your life and take care of yourself.”
3) Attain your goals
Whether you dream about buying a new house, new car or saving for the trip of a lifetime, this is your motivation to invest. Lots of people aren’t driven by a need to simply make money for the sake of making money. Investing feels a lot more rewarding when you have a personal goal in mind, and you can make things happen above and beyond what is available to you with a single paycheque.
4) Support personal causes
Do you believe strongly in certain companies or concerns? That could be another reason for you to invest. According to a social entrepreneur I spoke with, “investing gives me the ability to vote with my money, to enable what I believe in.”
5) Avoid missed opportunities
If you think about it, the act of “not investing” is already a risk to your capital. Not giving yourself the opportunity to grow your wealth is almost certainly as risky as being in the market, and is more risky over longer time horizons.
Now what are you waiting for?