Should you become an investor?

This month, the theme of International Women’s Day was #EachForEqual with a call for each of us to take individual action for equality. 

The pay gap is deservedly making front-page news, but did you know that we also face an investment gap? In fact, only 26% of millennial women are currently investing, compared to 43% of millennial men. 

Why does the gender gap in investing matter? 

Investing provides an opportunity to increase the value of your money over time. But, partly due to lower incomes and partly to an investment industry that has typically been dominated by men and failed to cater to women, investing is an opportunity that women are less likely to take advantage of. Together, the gender gap, pensions gap and investment gap all damage women’s financial stability later in life. 

This is slowly changing. With the emergence of firms specializing in advising women on their investments and new methods of investing that are a better fit for young people, investing is increasingly on women’s radars. And the good news is that studies have found that women tend to be better investors. 

Should you consider investing? 

First, banish from your mind the stereotype of a suited man shouting “Buy! Sell! Buy! Sell!” The reality has little to do with the Wolf on Wall Street and a lot more to do with patience and long-term planning. 

You’re better off imaging your sister or friend at home on the coach using their mobile to put aside another chunk of money to their investment fund. Perhaps they are planning the house they will buy, the lifestyle they want in retirement, or building the money they use to retrain and change job in the future. 

Investing may be a good option for you if you are able to put aside some many to be invested over a long time period. It’s not about investing for your holiday in six months’ time, because the market could easily go up or down in that time. If you’re putting aside and investing money to buy a house in ten years, for example, you have a much better chance of the value of your investments going up over that time period. It’s important to bear in mind, however, that the value of investments can go up and down, and that all investing involves risk. 

Don’t I need to be a high earner to invest? 

In a word, no. Nonetheless, it is wise to consider investing once you’ve already paid off high-interest debts, like credit card debt, and already have some money saved in case of emergencies. 

However, you do not need to invest large sums. In fact, it can be a wise move to regularly invest small amounts in order to spread your risk. You can easily invest with relatively low sums of money, with online investment options available from £25 a month. 

How can I start? 

The best place to start is taking some time to understand investing. You can pick a book like Emilie Bellet’s “You’re not broke, you’re pre-rich” or sign up to her newsletter for practical advice on investing and much more.  

Once you start to feel more comfortable with the idea of investing, you can think about investing a small amount on a regular basis.  

Picking shares in a few companies is risky and impractical. Instead, you can start out by putting a small amount of money each month into a basic tracker fund (a fund that tracks the performance of the stock market, so your investment will do as well as the stock market as a whole) or a diversified fund (a fund made up of many different investments and run by a fund manager). In both cases, the idea is to spread your risk by spreading your money across lots of different investments – basically, making sure all your eggs aren’t in one basket. 

There are lots of online services that offer readymade funds that you can select depending on the level of risk you want to take. And remember that you can hold your investments in a Stocks and Shares ISA so that you don’t have to pay tax on any money that you make.