There are a number of myths around women and money, despite the fact there are more women in the workforce earning and managing their own finances than ever. Because people, especially women, continue to believe these myths, women are often finding themselves suffering once they get older with a growing number over 65 living in poverty or even homeless.
However, the reality is, even though women tend to earn less, they often make great investors. This is generally due to the fact that women don’t suffer from overconfidence, tend to trade less often and invest for the long term, resulting in lower transaction costs and taxes, while achieving higher returns.
So what are some of these myths that are holding women back?
1) Women are not as good at maths and aren’t interested in numbers.
Not at all true – females are just as good as males at maths, and their grades are proving it.
2) Women need more financial education before they will invest.
Everyone can use more financial knowledge to help them make the right decisions; the difference is that men will often go ahead and invest regardless.
3) Men are better investors than women.
4) Women are too risk-averse to invest.
While women are risk aware, this can be a virtue. It can ensure women don’t make the mistakes men tend to make chasing the ‘hot stock’ or investing too much money into a ‘get rich quick’ scheme.
5) Women aren’t that interested in investing.
It’s not that women aren’t interested, it’s more a case of feeling misunderstood, as a recent US study has found. The study found that, contrary to the perceived view that they were indecisive and less confident, women tended to want more information and took more of a long-term view.
6) Women need more hand-holding and prefer to work with female advisers.
On the contrary, women just want someone who can be their investment partner and will help guide their decision-making process. Women are more than capable of making their own investment decisions once they have been given all of the information they need.
7) The real issue is the gender pay gap.
While the gender pay gap is an issue that needs to be addressed, it doesn’t mean that women shouldn’t try to take control of their financial future. A woman’s natural instinct towards risk aversion, tendency to do plenty of research before acting and preference for investing long term, all make women better investors. By starting early and taking advantage of compounding interest, women can minimise the effect of the gender pay gap and ensure they have a comfortable retirement.
Any one, or all, of these myths may be holding women back from achieving their financial goals so it’s important that we do what we can to bust them and show them up for the nonsense that they are. You can start by sharing this article with your friends and family to show that women really are great with money. You can also read more tips here.
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