Why Women Should Start Investing For Their Future

Nowadays, more and more women are becoming financially sound. Many women today are outdoing men when it comes to investment returns. According to a study done by Fidelity, women steadily earn higher returns than men by 40 basis points on average. Also, women add more money to their account balances than men by 12.4 percent compared to 11.6 percent.

However, regardless of excelling at investing, women don’t do enough of it. According to a survey done by Wealthsimple, women invest 40 percent less than men. Another survey done by Lexington Law asked men and women what they will do with an extra $1,000. A good portion of men over women would be more inclined to say they would invest it.

The above results are surprising considering the choices that women make concerning money. Therefore, women should learn how investing brings great benefits for the future and know what to invest in. This will also give women great confidence in the financial world. Whether you want to invest in the best bank stocks, pharmaceutical stocks, or anything in between, do your research and make the investment plunge.

The Benefits of Investing For Your Future

Women need to start investing early in their 20s. When you start investing at a young age, you will have far more assets than those who decide to start in their late 30s and 40s. By starting young, you’ll have time to do research on investments and decide which ones would work for you. Having years on your side gives you the ability to save money and invest over a longer period of time.

Compounding returns are significantly substantial over many years and the earlier you start the greater it is to take advantage of this. According to Investopedia, compounding returns is “the process in which an asset’s earnings, from either capital gains or interest, are reinvested to generate additional earnings over time.” Set up an investment portfolio or a retirement account. That way, when you do decide to retire, you will have huge compounding benefits.

Implement positive spending habits. This can be difficult at times, but when you’re thinking about investing your money, it will make you develop better spending habits. Investing helps you learn important lessons about money which will, in turn, benefit your future.

If you invest young, then you are ahead of the financial curve. As a young investor, you put yourself among those who know how to take care of their finances. Therefore, 20 years from now, you will be able to buy that house or a boat you been dreaming about without stress. This is not to say that your personal finances will not get tight, however. Investing in your youth can help you through those unforeseeable hiccups.

Your quality of life will enhance by becoming a savvy investor and starting young. Everyone, and especially women, should start investing in Roth IRAs and retirement funds. By starting early, you avoid making desperate moves near or during retirement. There are so many middle-aged and elderly people wondering how they’re going to pay for medication, how to pick up a side hustle to pay bills, or how to push back their retirement. Invest young and you’ll avoid these scenarios.

5 Investment Options

If you’re not sure what to invest in, noted below are five options for women investors. Also, remember to do your own research and speak with a financial advisor.

Certificates of deposit. These are deposits or CDs provided by banks and offer a higher interest rate than savings accounts. Also, they are federally insured.

Nasdaq 100 index fund. This index fund is a great option for women investors who want to have access to some of the largest and best tech companies without doing a massive amount of research.

REIT (Real Estate Investment Trust). It is basically a company that owns and manages real estate. If you’re interested in investing in real estate, then this is a great place to start. REITs, mostly, don’t pay taxes if it passes along most of the income as dividends to their shareholders.

Dividend-paying stocks. Dividends are segments of a company’s profit that will be paid out to shareholders. The superb reason to invest in dividend-paying stock is that you will earn long-term market appreciation and earn cash in the short term.

Money market accounts. A money market account is a federally insured, interest-bearing deposit account. It will earn you a higher interest in a savings account, but you will have to put a higher balance into it. However, it is still a great choice for your emergency savings.