There once was a time when finances—especially investing—were seen as something only men had to worry about.  Those days are gone, thankfully, as more and more women become financially independent.  The statistics bear this out:

  • 57% of women participate in the labor force.1
  • Two out of every five affluent women report earning the same or more as their spouse.2
  • Approximately 75% of women describe themselves as the primary decision-maker in their household.3

For this reason, it’s more important than ever that women become savvy, educated investors.  That’s because how you invest can make or break your financial future. 

The Importance of Investing

These days, most people can’t afford to reach their financial goals—such as retirement—on their employment income alone.  The cost of living is simply too high.  This is especially true for women, who on average make only 82.1 cents for every dollar a man earns.  That’s why investing is so important: because it allows you the opportunity to put your money to work for you.  Through investing, you can potentially grow your money and seize opportunities for additional income. 

But it’s not enough for women to simply invest.  You must invest wisely if you’re to reach your financial goals. 

But that’s easier said than done, isn’t it? 

The fact is, all investing comes with risk.  Just as proper investing can bring increased wealth, making a mistake can take it from you.  For this reason, all women must take the time to educate themselves on the basics of good investing. 

There are many resources you can turn to, such as hiring an experienced financial professional to help.  (We’ll get to that in a moment.)  But to get you started, simply take a look at the following to find … 

Five Steps to Becoming a Financially Savvy Investor

  1. 1.  Understand the concept of risk. It has been mentioned that all investing comes with risk.  That can sometimes be a hard truth for women to get around.  Some studies suggest that women are more risk-averse than men, and while it’s hard to say whether that’s true or not, it’s almost beside the point. The real point is that all investors have to understand the balance between too much and not enough when it comes to risk. 

Yes, there is such a thing as not enough risk.  To put it simply, if you never take on any risk, then there’s really no possibility of reward.  Remember, investing is a means to reaching your financial goals.  But if your investments are not earning a high enough return, reaching those goals becomes much more difficult. 

Of course, too much risk is never a good thing either.  The more risk you take on, the higher your chances of losing what you can’t afford.

For that reason, remember this rule of thumb: invest for need before you invest for greed.  Determine what your own needs and goals are, and what kind of return you will need to accomplish them.  That’s a good starting place for determining what kind of risks you can afford to take. 

This leads us to the next step, which is to …

  1. 2.  Create a financial plan. When you make investing part of an overall financial plan, it’s easier to understand what you’re doing and why.  It’s easier to feel comfortable with your purpose for investing.  While there’s no one-size-fits-all type of plan, most good plans should contain:
  • Your goals.  What do you want to accomplish?  What do you want to protect?  Who do you want to take care of? 
  • Your current financial situation.  How much money are you bringing in?  How much is being spent on current expenses?  
  • Your needs.  What will it take to meet your expenses and reach your goals, especially compared to your current situation? 
  • The steps you intend to take to fill those needs and reach those goals.  What habits need to change?  What are you going to invest in, and when? 
  1. 3.  Learn more about your personal retirement savings plan if you have one. For many Americans, male or female, most of their investing comes in the form of a retirement savings plan like a 401(k) or IRA.  In fact, nearly 80% of full-time workers have access to an employer-sponsored retirement plan such as a 401(k).4  For this reason, it’s clear that plans of this sort are an invaluable tool.  But many people don’t give them the attention they deserve.  For example, studies show that many investors have no idea what’s even in their 401(k), what their options are, which investments they’ve selected, or how much risk they are taking on.5 

So if you have some sort of personal retirement savings plan, take the time to really understand how it works and what you’re trying to accomplish with it. Specifically:

  • Be able to understand the different investment options available to you so you can choose the right options for your specific needs and goals.
  • Be able to tell how much risk you are taking on and how you may be able to decrease it.
  • Be able to decipher the fine print so you’ll know exactly how much you’re paying in fees.

By taking these steps, you can get the most out of your personal retirement savings plan … and by extension, the most out of your investments. 

  1. 4.  Talk to your family about your investments, especially your spouse and children if you have them. Investing doesn’t just affect you … it affects your entire family.  It’s important that everyone be on the same page so that there are never any misunderstandings, miscommunications, or unpleasant surprises.  This is especially true regarding spouses and partners.  If your partner currently handles all the investment decisions, explain to them that you want to be involved.  If you currently make all the decisions, take time to involve your partner.  This way, you can reduce the risk of fights and hurt feelings, which can have a serious impact on reaching your goals … not to mention your personal happiness.
  2. 5.  Consider hiring a qualified, experienced financial advisor to help you. Let’s face it, all the steps just outlined are simple to understand, but that doesn’t make them simple to follow.  Furthermore, many women don’t have the time to follow these steps on their own … and the points We’ve covered here just barely scratch the surface of investing.  That’s why many investors, men and women, seek to hire a financial advisor. 

A good advisor can:

  • Help you create an investment strategy that’s right for you—with the right investments and the right level of risk.
  • Answer your questions and help educate you further so that you can make informed decisions.
  • Hold your hand to get you through those periods when the markets are particularly volatile.
  • Perform the research, handle the transactions, and take care of all the other heavy lifting that comes with investing, that many people have neither the time nor the inclination for.

When it comes to hiring an advisor, you should always take your time, shop around, and do your due diligence.  Different advisors have different levels of experience, specialization, and even competence.  Therefore, make sure any advisor you decide to work with can explain what they do and why.  Make sure they are properly licensed and credentialed in your state.  Finally, pay attention to the level of interest they show in you.  Are they asking lots of questions?  Are they trying to learn everything they can about your personal situation?  Or do they simply seem intent on selling you something?  The answers go a long way to determining whether that advisor is right for you. 

In the meantime, start on the road to becoming a savvy investor.  Read, learn, inquire.  As a financially independent woman, you owe it to yourself, to your family … and to your own future. 

If you have any questions about these tips, or about investing in general, please don’t hesitate to contact us.  We would be happy to speak with you!




1 “Women in the Labor Force,” United States Department of Labor, accessed September 29, 2015.

2 Jennifer Openshaw, “An investment challenge more women need to confront,” CNBC, February 11, 2015.

3 Sylvia Ann Hewlett & Andrew Turner Moffitt, “Harnessing the Power of the Purse: Female Investors and Global Opportunities for Growth,” Center for Talent Innovation, accessed Sept. 29, 2015.

4 “401(k) fast facts,” American Benefits Council, updated April 2014.

5 Richard Eisenberg, “We’re Flying Blind Investing for Retirement,” Next Avenue, June 12, 2014.