I am on a personal mission to get women to save and invest more.
There are some fascinating studies that find that women are actually better at investing than men, but they save and invest far too little, and too infrequently, which puts them at a huge disadvantage.
The wealth gap is a terrible issue, as women have far less invested and saved than men, and we need those long-term assets even more than dudes.
Investing for women is important because:
- On average, women will live longer.
- Women are disproportionately more likely to be responsible for children and aging relatives.
- Women earn less during our careers (damn you, pay gap!), and therefore receive less from Social Security.
Plus, we are better at investing, so we should just be investing and growing our money for the sake of the economy, gender equality and national security, right?! 😉
Unlike pretty much every other post you will find out there about how to invest for beginners, I will not bore you with details about diversification, rebalancing or other things like that.
That is boring and confusing to me, and I have worked as a personal finance journalist for more than a decade. All that jargon is important, but if you are not excited about learning it, then don’t.
After all, the details of human anatomy are important, but you don’t bother reading medical journals if you feel sick, or want to stay healthy.
You leave that to experts who went to school for a long time to learn about medicine, and you pay them a lot of money to make you feel better. Same with money.
Especially since all that jargon and systems were created by men, and are designed to make you feel stupid so that you pay them a lot of money to manage your money for you.
This is fact, not opinion, and it should make you really mad.
You are not dumb or stupid. You are brilliant and you have what it takes to easily invest your money for the future and not pay anyone a lot of stupid fees for that.
Get started investing
If you have a 401(k) or other investment plans at work with a match, maximize that. You probably get a handful of investment options to chose from, and one is likely a target date fund. Choose this.
Fund = Group of stocks
Which is way better than a single stock, since the mix means you are better protected in case the market crashes, and more likely to make money when it goes up.
Target date = the fund is managed in a way to maximize the time you own it
For retirement accounts, chose a target date fund that ends around the date you expect to retire.
For example, I am 41, and expect to retire around the year 2040, so have a lot of my retirement investments in Vanguard Target Retirement 2040 (VFORX).
Vanguard is famous because it is low-fee, and in return for that low fee, a bunch of nerds are paid huge salaries to make my money grow.
I’m not a fund manager, so I would never pretend to do a better job than those nerds. They got you. A target date fund is awesome. Do that.
If you want to check whether your 401(k) is performing as well as it could, I recommend Blooom, an online tool that automatically maximizes your 401(k) investments, without you having to move your account.
For more check out my post: Worried your 40k(k) is underperforming? I found an easy answer …
If you don’t have a retirement program at work, you can create your own!
Two easy investing options you can’t go wrong with!
Open your own brokerage account, and buy target date funds. Brokerage = Company where you can buy and sell investment products, like target date funds!
I am a big fan of TD Ameritrade because it costs you $0 to buy target date funds. $0 = FREE. Do that. Or:
Go with a robo-advisor. Robo-advisor = a really smart computer system that manages your money for you, for very very low fees. Robo-advisors are a great option because of a) low fees, b) super-easy to use, including setups that take a few minutes, and set up automatic deposits.
Ellevest
This robo-advisor was created specifically for women, taking into account that we often take time off to have babies, suffer at the hands of the pay gap, and like pretty websites! Read my review of working with them here.
Founded by Sallie Krawcheck, a Wall Street trailblazer who has been a guest on my Like a Mother podcast, the Ellevest’s pretty interface creates a custom financial plan for you — for free — for whatever your financial goals, including planning for kids, buying a house, paying off debt, or, of course, retirement.
Betterment
Betterment is awesome if you are looking for another very low-cost platform that takes less than 5 minutes to set up.
The interface is as simple as can be, and you can’t beat the .25% fee, no minimum investment, access to human advisors via chat, and an app. Read my review of betterment here.
Advice for single moms about investing:
Prioritize retirement investing far above your kids’ college education.
An Allianz survey found that Americans over-save for their kids’ college fund when compared with retirement, and guilt-ridden single moms are especially prone to this mistake.
Remember: the best gift you can give your kids is your own financial health.
This makes you a less-stressed, more secure mom today, and relieves your children from the worry and resentment for caring for you in your later years. There are countless ways to finance college, but no Pell grants or loans for retirement!
Believe that you are worth it.
You deserve to have a fat wad in the bank, peace of mind and confidence that you can have a comfortable, joyful life and financial future!
You are not dumb or lazy because you have not started investing — or not saved enough. The system is stacked against you. You are smart and you can do this. When you succeed in your finances, all women succeed. We lift each other up, set great role models for one another, and together we are going to close this wealth gap!
This article originally appeared on WealthySingleMommy.com and was syndicated by MediaFeed.org.
Featured Image Credit: santypan.
