Over their lifetimes, women make less money than men. This is, in large part, because of the overall wage gap; Hispanic women make around $0.63 for each dollar that a white man makes; Black women make slightly more at about $0.68, and white women are closest to equality with $0.81 to the dollar.
Combine that with the fact that women tend to live longer than men, and it’s obvious that women are going to struggle financially more than men do, especially at the end of their lives.
Smart investing is one way to make up the difference and improve financial quality of life during retirement. How can women find investing opportunities for women which have a big impact?
Learn About Investing
The first, and most important step of building a strong investment portfolio is to become educated about investments. You need to know the differences between stocks and bonds, how dividends are paid, passive and active income, and how all of these different things will be taxed over time.
This helps you to make sure that you get the right money in the right place at the right time. Don’t be afraid to ask financial advisors questions. If they seem irritated or frustrated with your questions, find another advisor. They work for you, after all.
Some investments are common sense, and should be consistently used. For example, if an employer offers a 401k with a match plan, financially savvy women should be investing up to that match rate. There’s a lot to be said for the different apps and automatic deposit options that allow you to take small amounts of your paycheck and build up a gradual stock portfolio. Some even use the change from your transactions, turning those nickels and dimes into something more.
Goals Based Investing
When you start investing, it’s important to have a goal in mind. Are you saving for your retirement years? Are you looking to make an investment now that can be cashed in to pay for a child’s college tuition? Are you looking to build a portfolio of passive income to assist you now or later in life? When you know what you’re investing for, your advisor can help you make better decisions about aggressive and conservative investment options.
Invest In Products and Companies
With crowdfunding becoming more and more popular every year, it’s possible to become deeply involved in a company by crowdfunding its startup. But before investing in a company, you need to know how enough about the industry to understand the company.
For example, many women have been mothers, and are deeply familiar with the kinds of products and gear that make parenting easier and less frustrating. Products that aim to reduce the stress of parenting can be a huge investment opportunity for women, especially since they tend to have the experience to say whether or not something is likely to find its market.
For example, baby monitors. Night vision baby monitors have come a long way since the one way or two way radio monitors that were popular just a couple decades ago. Monitors are advancing now, in a big way, and since mothers are still responsible for so much of parenting, they can often find the best options for investing in a product or company that’s likely to be successful.
Make sure you’re investing in companies that you believe in and want to support.
Invest In Women
One way for women to make a big impact with their investments is through what’s actually called impact investing. In the simplest terms, what this means is that the investor is considering the social and environmental impact of their investment, as well as the potential financial gains.
In many parts of the world, women struggle to access capital or own businesses. When these women do have the ability to support themselves financially, they tend to spend their money on basic needs and supplies. This allows their income to feed back into the community and improve the overall welfare of those around them.
In the United States as well, women struggle to gain access to traditional loan funding for their businesses as well as venture capital. By investing in companies that are owned by and run by women, investors have a huge impact on the economy around them. Women owned businesses are growing at their fastest rate in decades, but there’s still plenty of room to catch up, especially in STEM and business fields.
By choosing investments carefully, a woman has the potential to both support herself into her retirement years, generate passive income that will help create a stable living situation, or invest capital in such a way that it will help with educational or other expenses for herself or others. She can also choose investments that will support and benefit other women, improving the community as a whole.