‘If millions of old men have been doing it for decades, what makes you think you aren’t equally as smart and capable of doing it?’
These words were said by @webravelygo, a young woman who educates about personal finance management on Instagram. One morning during lockdown while mindlessly scrolling through my Instagram feed I stumbled upon her permanent story in which she gives an introduction to stock investing. It was intriguing, but I remember thinking that investing isn’t something for me. I barely even know how to open a regular bank account, not to say a brokerage account. It was always something I associated with old people or with men in suits with a MSc in economics. Something so far out of my spaces of interest that I would never even consider reading about it. Or maybe it was because I never thought I would be able to understand this ungraspable, complex thing or how I could even benefit from it. But these words really stuck with me. If millions of old white men have done it before me without prior education or knowledge, why didn’t I think I could do it? The next few weeks I spent educating myself on financial empowerment and specifically stock investing. Now I am here to prove to you that you, too, can learn how to invest your money and make it work for you.
First, let’s get started with the basics. What is investing and who is it for?
If you have ever bought something or paid for a service and expected something out of it in the future: congratulations, you have made an investment. Taking a cooking class and expecting to know how to cook upon finishing it is not very different from investing your money and expecting it to grow when you take it out. There is no guarantee that you will be the next Gordon Ramsay but with enough research, attention and persistence it will surely benefit you greatly, just like investing.
My belief is that women and specifically women of colour should know how to grow their own money. The gender wage gap shows that women are financially disadvantaged to men in every sector across all positions. Add being a person of colour, having a disability, identifying as LGBTQIA+ and/or inheriting generational poverty to it and the gap widens. While I am a strong advocate for systemic change to counter this, I also believe that to some degree we can take it into our own hands to make choices that will alter our reality for the better. So, if you are likely to be paid less because of your gender, sexuality, race or social background, investing is FOR YOU.
But what are the benefits of investing your money?
Why not just leave it in your savings account where it stays safe? Well, first of all, we should consider that savings accounts more often than not come with fees and over the years this will chip away at your hard-earned cash. But more importantly, your money has no growth potential in a savings account. What’s even worse, with inflation (when goods and services become more expensive) it might even lose more of its value. Don’t get me wrong, I’m not saying savings accounts are bad – you should definitely have one for emergencies, so you have money on hand when you really need it – but they are not the only option you have to save money.
There are funds that let you invest in the 500 best performing companies in the US for example. You would bet that companies like Apple, Amazon and Google won’t be going anywhere in the near future right? Why not get in on their success by investing in them? The average annual stock market return for the past 10 years has been 9.2%. In 10 years that will likely be double the amount you have invested initially. Doesn’t that sound a lot more compelling than leaving all your money in a savings account where the interest rate (what you gain from depositing it there) is often something around 0.5% per year?
Okay, but where do you start?
To get you started I have compiled a cheat sheet for everyone who wants to learn more about stock/index fund investing with the vocabulary explained, notes and some advice I have gotten from my research. I also recommend looking up the basics on YouTube and downloading apps like MyWallSt (personally tested and recommended) and Investmate just to get started. There is also an abundance of Instagram accounts that do educational work on personal finances and stock investing. As I love to learn from women and/or POC here are some of my favourites in the field that you should be following: @webravelygo, @smartwomensociety, @likeagirlacademy and @heyberna. This is a great place to get started as they don’t only educate about money and finances but also speak about its intersection with feminism.
Are you still not convinced?
I am fully aware that not every student has the means or savings to invest their money just yet (although you can start investing with as little as 10£). If you can’t invest in stocks yet or decide it is not something for you, you should get educated on financial literacy nonetheless. Virginia Woolf famously said: ‘A woman must have money and a room of her own if she is to write fiction.’ Her words still hold true to this day. Money isn’t everything but money is access and power. It opens up spaces to you that you thought were unattainable. It lets you live a life that is authentic to you because you won’t have to worry about money. And doing whatever you want, however you want it; it doesn’t get more empowering than that.
Sources:
Scheid, Brian. “S&P Global Market Intelligence”. S&P 500 returns to halve in coming decade – Goldman Sachs. 27 Sep 2020: https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/s-p-500-returns-to-halve-in-coming-decade-8211-goldman-sachs-59439981