The idea of investing may seem daunting, but women should recognize their earning potential and make their money work for them, says Marshay Clarke, a certified financial planner with Betterment.
“Women today have amazing earning potential,” she says. “We’re graduating from college at record rates, we’re leading organizations, we are sometimes even the breadwinners for our families, so it’s extremely important that we invest.”
Clarke says that while investing is often perceived as a man’s realm, women shouldn’t feel excluded.
“It’s been socialized that investing is a male-dominated industry and that you have to have [a certain] amount of money to get in, but just like our male counterparts, we’re earning a lot of money and at the end of the day, it’s important that our money grows just as fast as anyone else,” Clarke says.
Clarke shared five ways women can become confident investors and grow their wealth.
#1: Get started early
Clarke says there’s no perfect profile for what makes a good investor.
“If you are a female and you’re looking to invest, there’s no perfect time,” she says. “You don’t have to be married, you don’t have to have $100,000 in the bank.”
The most important thing: starting as early as possible.
“The earlier you invest your money, the longer amount of time you have for that money to compound in the market and earn more for you,” she says.
#2: Set goals
Clarke says a lack of confidence is often what holds women back when it comes to investing. But women can gain the confidence to invest when they have a specific goal in mind.
“Instead of saying, ‘I want a million dollars in 20 years,’ what is your million dollars going to be used for,” she says. “I like to talk about goals: Are you saving for your child? Are you saving for education, or are you saving for retirement?”
Once you identify what you’re saving for, it’s much easier to save and invest.
“Then you have something to align your investment with and you know how much you need to make,” she says.
#3: Use an investing app
Investing apps can be a good gateway to investing, because the stakes are relatively low and women can learn about investing without much risk, Clarke says.
“The applications we have today, like Stash or Betterment, are making investing accessible,” she says. “It makes sense especially when you’re just getting started.
“A lot of these companies do not have minimums, and they have very low fees, so you’re not putting much on the table if you just put a little bit of money in that account just to understand how investing works,” she says.
#4: Take advantage of your 401(k)
Another easy way to grow your wealth: a 401(k) plan.