Investing for Women – Strategies for Building Wealth and Achieving Financial Goals

Learn to be financially savvy this International Women’s Day! Use these 5 strategies to build wealth and achieve your financial goals.
FTB News DeskMarch 7, 202313 min

Women actively started joining the workforce in industrialized nations, and a huge boom was noted in their participation, especially in the 20th century. Even then, women were largely limited to poor status and low-paid jobs in the economy. They didn’t earn enough to even think of investing, it was at best a foreign concept to most. So the popular adage in the financial world that says ‘men invest and women save’ proves to be true for the most part. The situation in the higher education sector looked no different for women. Even top universities like Cambridge started validating degrees for women in late 1947.

Today, times have changed. Women have started acquiring C-level positions in the workforce. There sure still is a huge disparity between the percentage of men and women who occupy higher job positions in the workforce, but we’re getting there. The point is, women are still very new to the concept of investments. All they’ve ever had the money for was to allocate to necessities and save the remaining. Now that women do earn enough to start investing and building wealth, they also have to work on the risk-averse nature that stops them from taking any financial risk. The unique challenges and needs that they face in their entire life make it even harder for them to properly plan their retirement.

In this blog, we’ll explore some effective strategies that will help women all around the world to work on achieving their financial goals, building wealth, and leading an independent and secure life. Let’s get right into it!

Crafting A Goal-Driven Investment Strategy

Having a specific goal can do wonders for your investment strategy. When you invest money with no distinct thought in mind you can sometimes be tempted to indulge in overspending. With a clear money strategy, you can get rid of this habit. It’s important to build a corpus keeping in mind inevitable circumstances such as inflation and retirement. 

Invest in both conservative annuity plans that guarantee risk-free investments and market-linked and fixed-income options that come with a part annuity. This way you take a partial risk and can be assured of sure-shot returns from part investment. Conduct thorough research before investing in market-linked options as they possess the potential for higher returns and are tax-efficient. 

Diversifying Your Asset Allocation Pool

Women tend to be more risk-averse when it comes to investing their money. According to a survey conducted by BlackRock, only 45% of women in the US invest in the stock market, compared to 63% of men. This risk-averse behavior can limit women’s ability to grow their wealth over time.

One of the first steps that women can take toward attaining financial independence is to challenge their risk-averse tendencies.

Instead of solely relying on savings accounts, women can diversify their investment portfolios across different asset classes such as stocks, bonds, cash, equity, gold, and real estate. Diversification helps spread out the risk and protect against market volatility. Diversification also leads to higher returns over the long run. A study by Vanguard found that a diversified portfolio of stocks and bonds outperformed a portfolio that only invested in stocks over a 20-year period. By diversifying your portfolio, you can achieve a balance between risk and reward that aligns with your financial goals.

Consolidating Your Individual Assets And Liabilities

It’s important to have a strategic plan in place for managing your finances as a couple, including how to allocate your assets. You and your partner should work together to determine a sound asset allocation strategy that takes into account your monthly income, expenses, and savings. This means considering not only your salaries, but also any other sources of income such as investments in stocks, mutual funds, gold, property, and more.

By thoroughly evaluating your investment options and determining how much you can earn from each, you can create a comprehensive investment plan that aligns with your shared financial goals. This will help you make informed decisions about how to consolidate your individual assets and liabilities in a way that is mutually beneficial for both partners. 

Preparing For Retirement 

By beginning to save and invest for retirement as early as possible, you can create a larger corpus and achieve greater financial comfort in your golden years. For women in particular, planning for retirement is especially important. As women tend to live longer than men on average, they often have to rely solely on their own savings in later life. It’s important to start building a retirement corpus early on, taking into account the potential impact of factors such as inflation, increased longevity, and rising healthcare costs.

Make a list of rewarding investment plans that can generate income that exceeds your lifestyle needs, and explore different options for building your retirement corpus, such as investing in a variety of financial instruments, real estate, or starting your own business. By taking a proactive approach to planning for retirement, you can avoid financial stress and enjoy a comfortable retirement. Keep in mind that retirement planning is an ongoing process, so be sure to regularly review and adjust your strategy as needed. Remember, the earlier you start planning, the better off you’ll be in your golden years.

Engaging An Investment Advisor 

Engaging the services of a qualified investment advisor can be a smart move for women looking to take control of their financial future. While it’s great to have a trusted friend or family member to turn to for financial advice, there are often inherent biases and emotional attachments that can make it difficult to make objective decisions.

A professional investment advisor can help you navigate the complex world of finance, and provide you with expert guidance and support as you make important investment decisions. Working with an advisor can also help you stay on top of changes in the market, and ensure that your portfolio is structured to be tax-efficient. 

Remember, choosing an investment advisor is a personal decision, and it’s important to find someone who shares your values and understands your unique financial situation.

Summing Up

Investing for women is a critical component of building long-term financial security and achieving important life goals. By taking a proactive approach to managing your finances, seeking the advice of qualified professionals, and making informed investment decisions, you can create a strong foundation for a brighter financial future.Remember, investing is a long-term process, and it requires patience, discipline, and a commitment to ongoing learning and growth. With the right mindset and the right tools, however, you can overcome any obstacle and achieve success on your own terms. So take the first step today, and start investing in yourself and your future. The rewards will be well worth the effort.

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FTB News Desk

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