Recently I had a lunch gathering with a group of close female friends, all of whom were busy working mothers. The conversation revolved around the typical topics – kids, family, travel and lifestyle matters. And this sounds perfectly normal isn’t it? Put a group of ladies together and we can chat on anything from travel to fashion to food to children… but seldom do we discuss on financial matters, particularly investing.
Why is this the case?
To better understand the challenges holding women back from investing, my team and I conducted an online survey recently.
Here were the top 4 reasons that respondents shared.
- Insecurity – Risk, worry and fear of losing money
- Lack of knowledge & skills – Don’t know how and what to invest in
- Not enough money
- Not enough time
Originally I planned to write about strategies to overcome the 4 challenges. But then it dawned on me that all these reasons are just the tip of the ice berg.
Even if I wrote about the how-tos of investing strategies, techniques and ideas…
Even if I presented logical arguments about how investment is not as risky and how much you are losing out to inflation by keeping your money in the bank…
All these wouldn’t matter without first addressing this pivotal point.
The real reason.
The underlying reason holding many women back from investing is the lack of a strong Why.
Why do you want to invest? Why is investing important to you?
What difference will it make to your goals or does it even matter at all?
Based on our survey results, the most common reason why people invest is to “earn better returns than in the bank”. After thinking about it, I realised earning better returns is actually a “good-to-have”, not a “must-have”.
While the desire to earn better returns may trigger some people to take some investing action e.g sign up a course, open an investing account or even buying stocks, it does not sustain a lasting motivation to stay through the journey.
Because we each have an internal scale within us. When our reasons for not investing is stronger than our “why”, it’s natural for us to stay or return to where we are.
How many of us have actually bought shares or unit trusts before as a one-off exercise and then left it there, forgotten and un-monitored? Or opened brokerage accounts only to leave it there untouched? I am guilty of this as well.
My Investing Struggles
When I were in my 20s, many people kept telling me I should start investing since I was young. And so I tried. I went to attend investing courses and opened up my CDP and brokerage account.
But I stopped short of actually buying any stock because there seemed to be so much research to be done first. In the end, I didn’t even log into my account and forgot my password 😉.
It wasn’t until I received a call from the bank informing me that my fixed deposit were earning a very low interest and offered me something higher, like 0.6%??, that I woke up and started looking at investing again to “earn better returns”. I then bought some unit trusts on a spur of motivation. Investment – checked.
But the effect didn’t last and this motivation waned soon after my work load piled up and life caught up. Throughout the years I experienced multiple of these “start-stop” momentary spikes of “inspiration” to invest but I never followed through.
It wasn’t until I became a mum that I started thinking seriously about my children’s future and the kind of financial future and lifestyle I wanted for my family.
That was when I sat down and looked through my finances, mapped out my net worth picture and projected the figures that if I were to continue leaving my funds where they are versus investing it at various rates of return.
I asked myself “What if investing isn’t as risky or tedious as I think it is? What if I can grow my money at a faster rate, and provide my children a good education and quality of life, wouldn’t it make sense to do it then?” And the answer within me was clear. It was a resounding Yes.
My internal scale tilted within me and that was when I really started taking ownership of my finances and treated investing seriously.
Taking ownership of your “why” is your biggest motivator, because
- You will find the resources to learn how to invest safely and build your wealth
- You will find the discipline to save up the money consistently and set it aside for investing
- You will set aside time every week towards your investment – learning, monitoring, reviewing your investments. I know a good friend of mine who recently became committed to invest and she started a habit of reading financial blog posts every night before she sleeps
Nowadays there is no lack of good resources to learn the How-tos of investing, with financial websites and books readily available. Some financial blogs I personally like include investment moats, the finance and dollars and sense .
Also stay tuned for more articles here on the Women and Money series, to help you overcome the common investing challenges e.g risk perception and find the right type of investments that best suit you.
It’s always never too late to start investing at any stages of your life.
If you have always thought of investing your money but couldn’t get started somehow or you have tried investing but struggle with consistency, I invite you to take some time for yourself and find your why – something that will motivate you and keep you going despite the challenges or distractions along the way.
For me, my “why” was my kids and family, but this may not be the same motivator for everyone.
Perhaps for you, it’s about achieving financial freedom so you have the choice to fire your boss and spend your time doing what you love.
Perhaps it is simply to ensure you can retire comfortably without worries.
If you have yet to find your “why”, I invite you to join in our cashflow game event. You may well uncover your “why” after the game.
To inspire more women to start on their financial empowerment journey, I will be sharing real life stories about ordinary women who found their why to invest and to share their challenges, breakthroughs and lessons learnt along their investing journey.
If you have found your “why” and started investing, congratulations!! I am proud of you and I would love to hear from you. Do drop me a note at info@yonghui.sg if you are open to share your journey to inspire other women, many thanks in advance!
To Your Success and Happiness,
Yong Hui
In short, you trick your brain into believing at the start that this is doable. The motivation comes when the interest you earn is just too low and that there are no easy ways to earn a good return unless you take more risk with your money.
I think we all came from that starting stage.