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5 Myths Women Are Told About Investing

copyright Disney, 1997

I’ve never been big on the whole damsel-in-distress trope. I associate more with Meg from Disney’s Hercules when she says “I’m a damsel. I’m in distress. I can handle this. Have a nice day.” The whole concept that someone needs to be saved rankles me (is rankles a word? I don’t even know). But being a damsel in need of saving is kind of the messaging women are told when it comes to investing. I call bullshit. Here are 5 myths women are told about investing and why they’re not an excuse to ignore your money.

#1 Money uses math and math is too hard.

Am I just too pretty to do maths? *pouts* Gah! This one really Imagines my Dragons. This is a myth girls start feeling very young. A 2015 study found that teachers give boys higher scores on math assignments than they give girls. This may be because of unconscious biases. Whatever the reason, this starts to erode girls’ confidence and causes a ripple effect until many self-select out of higher math education. Somewhere between middle school and college, math becomes a male-dominated field of study. They happens because girls don’t think they’re good enough.

But that’s all perception. The hard numbers show use that women are just as good on math tests as their male counterparts. And managing your money doesn’t exactly require a deep knowledge of calculus; simple arithmetic is all that’s required. If you passed elementary school, I know you can do it. Don’t buy into this myth.

#2 It’s risky. Girls don’t take risks.

Yeah, there are risks involved in investing. But there are also risks of running out of money if we don’t invest. Which one sounds worse to you? For a long time the saying has been that women don’t invest because they are risk-adverse. But I argue that women are risk-aware. We know that there are risks, but the system built by and for white men hasn’t taught us what those risks are. Women are far more likely to say they know less about finances than men. And if there is something we don’t understand, then we are hesitant to participate.

I don’t know about you, but I get stressed out when I have to do something I don’t fully understand. Some studies suggest that men and women make different decisions when they experience stress. Women tend towards the lower-risk behaviors while the guys go big or go home. In the context of money, better education and guidance could ease the emotions we all feel about investing and lead to ladies being comfortable with more rewarding bets.

Anecdotally, I also feel like men are more inclined to see wealth as a way to keep score in the game of life. While women see wealth — or, more precisely, cash — as a way to help their families and communities (no science to back that one up, but over my career its usually the guys who reach for higher returns, while the ladies are more concerned with being okay).

#3 You just need to stop buying silly things. You and your silly spending.

One of the most impactful financial articles I have ever read is called “Just buy the f***ing latte” Take a couple minutes to read it. Go on, I’ll wait.

I love the philosophy so much that I have a coffee mug with the saying on it. Because I think it beautifully sums up how women are taught about money: you need to save more and spend less. No mention of earning more money to be found. In fact, about two-thirds of finance articles targeted to women tell us to budget, limit, and restrict our spending. That’s the message squeezed in between the articles telling you you need a $200 face serum and a whole new wardrobe. Awesome.

But the thing is, women aren’t necessarily the frivolous things we are portrayed as. First of all, even if you live exactly like a guy, it literally is more expensive to be a woman. Plus, we’re paid less. I vote we address those issues before telling half the population to just accept it and be thrifty. So go ahead! Buy the fucking latte. If it brings you joy, there is nothing wrong in working it into your discretionary spending. That’s not the reason you’re not investing.

#4 Investing is hard; you won’t be interested in it.

Here again, I blame an industry that doesn’t put its users first. Being a financial advisor who focuses on female investors (ahem: the goal of Valkyrie Financial) is actually considered a niche business. Since when is serving half the population a niche business?? This probably comes from the huge gender imbalance in financial services. Only 15% of financial advisors are female. Let me tell you: a financial advisor’s conference is the best place to be if you ever need to use the restroom. I have rarely felt the level of pure joy I experienced while breezing past the line for the men’s room and waltzing right into the ladies room. Seriously: bliss.

Anyways, I digress.

The lack of diversity here absolutely comes through in the messaging advisor’s deliver. I have sat in countless meetings where the male advisor focused on the male client. I have sat in countless meetings where the male client overrode his female partner (I’ve also sat in meetings were they worked as a team and those were the best). But then I’ve sat through meetings with newly widowed women who don’t know how they are going to get by and my heart broke every time. 41% of women say their BIGGEST money regret is not investing more. So, no, you are not weird for wanting to know more about investing. The industry is gaslighting you. Go ahead and push back.

#5 Investing is hard; you won’t be good at it.

I think this might be my favorite of the myths women are told about investing because it is outright bullshit. When I took my investments course in college we did one of those portfolio simulations where teams got so much fake money to invest each week. My team was all ladies and we consistently outperformed our male peers right up until the class learned about options and leverage. After that, the boys went all-in and outpaced us because we weren’t willing to take the risk or make overly-complicated bets.

Remember above where I said women are risk-aware? That actually leads us to be better investors. Multiple studies have found that women earn better returns. Whether it’s because women trade less or because they are more deliberate in the companies they invest in, the average difference in returns has been found to be anywhere from 0.4% to 6%, depending on the market cycle. 6% is amazing, but even an average of 0.4% year after year adds up over a lifetime.

Now that we’ve busted the most common myths women are told about investing, what are you going to do about them? Just because you can handle this on your own doesn’t mean you have to. Hit the button up above to schedule an intro Zoom with me and we’ll get after these together. Have a nice day. 😘

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