How women can improve their financial future

July 21st, 2020 by igniite

How women can improve their financial future

A total of 44% of women rely on their partners’ income as the main source of funds in retirement.

How to change the story

Two in five older single retired women live in poverty and experience economic insecurity in retirement, according to the not-for-profit organisation Women in Super. Women retire with 47% less super than men but live an average five years longer.

A total of 44% of women rely on their partners’ income as the main source of funds in retirement.

Why? Women spend more time out of the workforce caring for children and earn 14% less than men when they work full time. Just over 40% of women work part time.

Making a difference to your financial position can be achieved at any age but the younger you start, the bigger the potential gains.

For example, making voluntary contributions into your super early in your working life will make a big difference at retirement thanks to the magic of compounding interest, says Women in Super.

Choose your super wisely and have just one fund to potentially save on fees.

Finally, says Women in Super, get advice, ask questions and make sure that you understand.

Just start

Investing and planning for the future can take a back seat when you’re trying to handle a busy career and family life but just make a start.

Women are sometimes reluctant to seriously consider an investment portfolio because they’re afraid to ask for help because they feel like they don’t have enough money.

Start to build your knowledge and find an adviser to walk with you.

Broadly speaking, once women start understanding and investing and getting advice, they tend to make fantastic investors, because they’re quite disciplined.

Surveys confirm that female investors and traders do better than men. A 2018 Warwick Business School study found women outperformed men at investing, achieving a return 1.8% higher.

The study, which tracked investors’ performance for three years, found that men were more likely to pick more speculative stocks while female investors had a longer-term perspective.

Meanwhile, the University of NSW analysed 17 years of trading data in 27 major Finnish stocks and found that women achieved better results. The study, The Gender Face-Off: Do Females Come Out on Top in Terms of Trading Performance?, found women had “superior trading intuition” and were better at recognising patterns in the data.

Co-author Professor Peter Swan says women do better because they’re not panicked into following trends or into selling when prices are falling.

“In fact, they’re much more likely to be selling when prices are rising and buying when prices are falling,” says Swan.

Once women start understanding and investing and getting advice, they tend to make fantastic investors, because they’re quite disciplined.

Homegrown wealth

If investing isn’t possible because of lack of funds or lack of income, making your own job might be an option.

While most small businesses fail within the first three years, there’s often a good reason. For example, a lack of start-up capital, product failure, or a lack of market research.

Doing your homework, getting good advice and ensuring you have the funds you need to operate are all essentials.

The business idea can be small and home-based or one with the possibility of something bigger.

The one consistent characteristic is resilience. There’s interesting research that shows successful entrepreneurs are resilient and it’s a trait that really helps the women move forward.