Let’s Talk Investing: Girls Guide To Financial Independence

We know, we know, the stock market is just astrology for men. But if you have any kind of regular income, it’s high time you get your chart read and start reaching for the stars.

Contrary to popular belief, investing is not just for finance bros, self-proclaimed girl bosses or those with millions in savings. In fact, it’s something all of us can (and should!) be doing, no matter the size of our bank accounts or how much we hope will one day fill them. Think about it like a form of financial security, which by all accounts is one of the most significant guarantors of female empowerment, as it can help ensure your independence for years to come.

Like with anything, though, beginning this journey can be a little daunting. Stocks and bonds? Asset allocation? Compound interest? I’m just a girl! Here to help is the Hong Kong nonprofit Girls Just Wanna Have Fund$ (GJWHF$), a community of women whose mission is to eradicate the gender investment gap and pave the way for women’s financial freedom. Sassy sat down with GJWHF$ to get some insight on how women can begin their investment journey and why it’s so important.

Not sure what some of these terms mean? Scroll to the bottom to see a breakdown of the lingo!

Read More: The Beginner’s Guide To Investing

GJWHF$ Talk Investing 101

What is the gender investment gap and why does it matter?

The gender investment gap refers to how women tend to invest less, less often, and later in life than men. A recent study shows how this disparity results in 23% less accumulated wealth on average compared to male counterparts! Yet when women do invest, over a 30-year period their portfolios have a 25% higher value than men’s.

Why is investing (and conversations around investing) so often male-dominated?

Historically, social and cultural barriers have discouraged women from actively participating in financial decision-making. This is due to a wide range of factors, from unconscious bias, traditional gender roles and the finance industry being male-centric, to it being considered taboo for women to talk about money (even though it’s common for men to discuss!). This lack of access to financial information and conversation results in 72% of women lacking the confidence to invest some of their money.

What is the easiest way to begin investing?

The first step is understanding your financial goals and risk tolerance. Start with small, manageable amounts while educating yourself on basic principles such as diversification and the time value of money. You can also consider going on ‘Money Dates’ with friends and colleagues who have financial experiences they can share (our upcoming GJWHF$ Christmas Money Date is just a good place to start!).

Are there any risks associated with investing?

Yes, all investments come with risks! Risks vary depending on the type of asset, such as market volatility for equities, interest rate risks for bonds, and liquidity issues for alternative investments. Understanding your risk tolerance, setting clear goals, and maintaining a diversified portfolio are key strategies to mitigate these risks.

What are your top five tips for beginners? 

1. Understand your investing values by assessing your financial goals, risk tolerance, and time horizon.
2. Prioritise financial literacy by learning about asset classes, fees, and taxes through workshops and trusted resources.
3. Join a supportive community to connect with other women who are on their investment journey to financial freedom.
4. Participate in educational initiatives to gain knowledge in a safe and judgement-free environment
5. Start small and focus on consistency by leveraging strategies like recurring monthly investment of a small amount, such as $100 or $500, into a low-cost index fund to build your investment portfolio gradually.

Read More: Embracing Equity And Addressing The Gender Pay Gap In Hong Kong

Breaking Down Money Talk

Risk tolerance

How much you can spend (and maybe lose!) without putting yourself if in a bad financial situation

Diversification

Not putting all your eggs in one basket. Think about investing in different kinds of assets

Time value of money

Basically, it’s better to receive money now rather than later, because if you invest it now, you could grow the amount tenfold in the future

Equity

A piece of a company that you own when you buy stocks, like the tiniest slice of an enormous pizza

Market volatility

Unpredictable fluctuations in the price or worth of stock, whether those be sharp rises or falls 

Interest rate on a bond

The extra money you get back when you lend your money to the government or a company

Interest rate risks

When interest rates go up, the value of bonds you already have may go down, and when rates drop, bond values might rise

Liquidity in investing

How quickly and easily you can buy or sell an investment without affecting its price

Alternative investments

Different types of assets beyond traditional stocks and bonds, like real estate or gold

Read More: Financial Goal Setting 101