Just like our health, money seems to be a taboo subject for women. As of 2022, just 10% of women are said to invest in stocks and shares, and only 28% of women are actively investing their money in the UK – compared to 46% of men. More women are investing than ever, but as financial matters are not exactly taught in schools, nor is money management advice shared through the generations, how are we able to confidently determine how best to invest our money? With so many options – and complicated terms- where do we even begin?
When we heard about Girls That Invest, a book authored by Simran Kaur, creator of the number one stock market podcast of the same name, we just had to read it.
Simply, this book is a gamechanger for anyone starting out on their own personal investment journey.
Why we love this book
Two of the main barriers to investing is the jargon and knowing how to access the various investment products available. You seem to need a degree in financing just to understand the terminology. Although it is seemingly complicated, it really isn’t and this book will help smash down those barriers; it helps you to understand, simply, what it all means and even leads you through, step by step, into understanding the various means and ways you can invest your money.
Importantly, it highlights that most of us are in fact already investing; we’re just perhaps doing so passively. Whether that’s through your company’s opt-in pension scheme, or the ISA account that you pay into sporadically. You are placing your money into different pots and schemes but may not (are probably not) getting the best from these investments. It’s not that these schemes don’t have their place- they do, and a savings account you can access is important, but this book really does help you to understand how to get more from your investments and therefore, your money.
Our key takeaways on why we should all be investing:
- Financial freedom
- Address inflation imbalance – most savings accounts underpay on interest.
- Investments can help create social change
Crucially, this isn’t just some book you read cover to cover and struggle to know how to apply what you’ve read, nor does it seem fanciful and not applicable to the average person. Each chapter ends with a worksheet, helping you to review and take action on what it is you’ve just digested. Not only will you get to know and understand the various terms and options when it comes to investing, but with each chapter you’ll be taking active measures to increase your wealth potential. You are, as Simran highlights throughout, an Investor in Training, and by the end of the book you will know why investing is important for you personally and therefore what your motivations are for investing; you will have assessed your financial situation and determined what is available to invest; you will understand more about your risk tolerance and how this will play into the type of investments you make; you will know how to determine the companies and products that are right to invest in for you; you will be able to take active steps to start investing your money, and you will know how to monitor, review and adjust your portfolio to ensure growth.
Investing is seen as a rich man’s game and unless you’ve got hundreds of thousands of pounds to put into the stock market, its not worth playing the game. However, what this book is great at illustrating- not just telling you how or why but literally showing you, through easy-to-read charts and illustrations, just how far your money can go, whatever you have available to invest, whenever you’re ready. Not only does Simran’s very eloquent and fun book make this an exciting and attainable prospect, but each chapter also finishes with an investor portfolio, illustrating other women’s journeys through investing.
We had a couple of questions following our read which we put to the author. Here is what Simran Kaur advised.
Most of the ideas talked about in the book – including the case studies- are around long-term investments. Is investing still viable if the motivations for investing are to save for a deposit for a home, or buy a 2nd home, for renovations etc., if looking to draw it out in 2, 5 or 10 years?
When it comes to investments or investment goals that are less than 5 years, you need to understand the risk that you’re taking. Financial experts often advise against investing in a shorter time frame.
I was someone that invested my money to be able to buy my home, but that came with the awareness that the closer I got to my goal, I had to start pulling my investments out and turning them into safer investments classes such as cash or cash equivalents. The markets are more volatile in the short term but less volatile over those longer time frames.
What would the minimum term for investing in the stock market be realistically?
I don’t personally put money into the share market that I need within the next 3 to 5 years that money is probably better kept in things like a term deposit or Bonds where the risk is lower but the returns are slightly lower as well.
How would you recommend women manage investing for these different financial goals?
The first thing to do is to understand what your goal is and get specific – for example wanting to retire by the age of 50 and being able to live-off $50,000 each yearly, passively. You then want to be able to work backward from there and determine what risk profile you have and also how much will need to invest to reach that goal e.g., $500 a month invested into a broad market index fund like the FTSE 100.
For example, someone that’s investing to buy a home and in 5 years’ time is probably not going to be taking on as many risky individual shares such as growth companies compared to someone who’s investing for retirement in 30 years and who has more time at to ride out the volatile market.
From the book we understand that, when it comes to investing, the sooner, the better. The case studies do not illustrate anyone over the age of 30 and lots of them have already been investing for a number of years. For those thinking about investing later, do they need to be more aggressive/take greater risks to ‘catch up’?
One of the points I really wanted to make in the book is that we often come across many women who feel discouraged by the fact that they weren’t able to learn this information earlier. We’ve had people feel disappointed that they missed out the opportunity to invest earlier.
In Girls That Invest I wanted to make it very clear out that you might be starting later but that does not mean you cannot improve your financial circumstances. I love the saying the best time to plant a tree was 20 years ago but the second best time is now. Taking a more risky investment approach is not always the best way to go about reaching your goals faster.
You’ve also got to remember that you are at a greater earning potential than you were in your twenties or thirties. Rather than focusing on trying to catch up we often recommend comparing their idea of what would happen if you didn’t invest from here on out compared to if you did and often times that can look like an extra half million dollars towards your retirement!
With only 10-20% of women in the UK actively investing, what would you say to the other 80-90%?
The one thing I would want a woman to take away is to question why we think we’re bad with money. We grow up being told we’re not someone that has a “numbers brain” – yet the truth is no one comes into this world with a financial guide in their hands. It’s often just about finding the right resource in learning in a way that makes sense to you.
Thank you to Simran for answering our questions and for creating a really powerful financial tool that makes financial matters more accessible for all.