Men in suits, yelling on the floor of the New York Stock Exchange. “BUY BUY BUY!” “SELL SELL SELL!” It’s loud. It’s messy. And you need to be a snappy dresser.
Based on the images you see in the media, it’s easy to think that investing in the stockmarket is something that only middle-aged white men can do.
But you know what? I’m a young female. And I invest in the stockmarket.
… And it’s not even hard.
We get a lot of messages from the media that we subconsciously absorb: if we only see men doing specific tasks in the media, we think that only men can do it. Fewer women try it because they think it’s not for them, and then when women try to break into it, they don’t have role models or support networks to learn from. And that perpetuates the gender divide.
So today – let’s break it down and show why women can and should invest in the stockmarket.
Investing in the stockmarket is kind of like sex: lots of people are doing it – but no one is talking about it. So you’d be surprised how many women are actually investing in the stockmarket and totally owning it – but because we rarely talk about money in our culture, so we just don’t know about it.
We have this fear of talking about money and we give money more power than it deserves. We treat money as if the only important thing in life and we discount the things that really matter: like if you’re a good friend, neighbour, partner, parent or colleague. Money is just a tool which can be used in a bunch of ways – for good or greed. It doesn’t mean more than that.
Today, I’m going to share a few misconceptions I had about the investing and stockmarket before I started doing it, to show you that it’s not as difficult as you might think.
I thought you need to follow the finance news really closely
The first thing I learned about the stockmarket was simply what it is.
Buying a stock is just buying a small piece of a company, and you hope that company earns money that year, and they give you a share of the profits. Simple.
So, for example, you’re buying 0.00001% of a company like Netflix. If they earn a profit that year, they give you money. If they don’t, you don’t. So you want to pick companies you believe in.
The stockmarket is a place where you buy and sell stocks. Back in the day men in suits did it at the stock exchange (think The Wolf Of Wall Street) – but today, you can just do it on an app on your phone.
Do you need to follow the finance news? Nah. But you do need to be aware of what’s happening with the company you’ve invested in. Are things going well? Do you still want to own a piece of them? Choosing companies you use already or know a lot about is a good start.
I thought it’s something that greedy rich people do
Why would you even invest in the stockmarket? To make money. But is that something that just greedy people do? Not necessarily. It’s for people who are thinking about their future.
Many of us go to work, get money to pay the bills, and do our best to save up and buy a few special things, or go on holidays. But about halfway through our life, we retire. We stop having a job to pay da bills – so where do we get money to live?
Yes, in Australia we’ve got a government pension, and with our Super, we’ve got some money set aside for retirement, too. But both of those are a back up plans and you’d be living pretty frugally if you rely on those. If you want to live more comfortably in your golden years, you need a little more money.
This is why people make investments: they buy a house, a build a business, they invest in the stockmarket. The idea is that you put money into something that will be worth more than you paid for it in a couple of decades. Then, you can live off that money when you retire.
In Australia, it’s pretty popular to buy a house, but it is not the only way to plan for your future. Investing in the stockmarket is another thing you can do.
I thought you need to have heaps of time to do it
I always thought that to enter the stock market, you needed to do what people do in the movies: check it every day, buy, buy, buy, sell, and be on top of it like a mofo. But that is just one way to invest in the stock market, which is called being a ‘day trader’.
It’s where you invest in a company one day, and the stock price might rise over hours or minutes, and then you sell it to capture the profit you made in those minutes. Time intensive and high risk, right? You need to be always watching the stocks to see the change on a minute by minute basis.
The other thing you can do is buy a company and sit with it for years and years and watch the profit grow over decades. This is a long term investing strategy, or being an ‘investor’. In fact, that’s what the world’s richest man, Warren Buffet does.
While day trading has the glitz and glamour, apparently long term investing is both less effort, and can have higher returns long term.
Of course, it needs to be pointed out that if you’re taking the ‘slow and steady’ approach, you aren’t going to be rich overnight. But if your objective is to build money for your retirement, then that is fine.
Each approach suits different goals, so it’s about knowing your objective.
I thought it’s super hard to learn
Once you realise that you don’t need to be across buying and selling every day if you’re going to do long term investing, it’s about researching a couple of companies you think will grow in the future, and buying a piece of the pie.
Yes, it requires some research to learn the lingo and how to actually buy and sell a stock – but you can learn it in a few weekends, or spend some time on your morning commute reading up on it.
It’s actually really easy to buy and sell – you can use an app on your phone, or log on using your laptop at home.
There are plenty of online courses run by the ASX, the and government has loads of advice about how to invest so learn up before you put your cashola there.
I thought you need lots of money to get started
I thought you needed lots of money to get started. But one birthday I got $500. So I bought some stocks. And, if every year I do the same, over a decade, I’ll have $5000 in there. And if I keep reinvesting my profits each year, I have even more stocks.
There are now micro-investing platforms which exist, which mean you can start buying stocks with even less money, but the fees are apparently pretty high, so do your research to see if they are for you.
Don’t forget that you don’t want to invest money you will need in a bind. Don’t put your emergency fund into investments because you might need that money quickly. If the stockmarket is having a downturn for a few months and you need to pay your cat’s vet bills, that money won’t be there for you to use. Only use money you don’t need in the next few years.
I thought investing in companies means I’m supporting consumerism and waste
We often think about investing in the stockmarket is for greedy fat cats and you’ll just be investing in mining or wasteful consumer products. But actually, it’s your money. And you can invest it wherever you want.
You can invest in things that make the world a better place. You can invest in companies that create green energy. Or support companies that support healthcare. Or that create sustainable products. Or support food production. Or education. Your money. Your choice.
Related: 5 Ways Women Can Rule the World by Owning Their Money
I thought men are just better at these things
Did you know what women actually rock at investing? Yep, research shows that because women are a little more cautious, and trade less often – so they actually outperform men in the stockmarket. Yep – you read that right. Studies show that women are better at men at investing.
There’s a stellar Instagram account called @girlswhoinvest. And who know what it features? Women who invest. If you’re looking for role models of women doing it (other than – ahem – yours truly) – it’s a kickass place to start.
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Sallie Krawcheck currently wears many hats as she works toward the aim of getting more money in the control of women. She is the Chair of Ellevate Network, a professional women's network, CEO and Co-Founder of Ellevest, a digital investment platform for women, and Chair of a gender lens fund. Krawcheck is known as one of the most influential woman in business, and got her start in the financial industry as a research analyst. Previous roles have spanned the C-suites of Merrill Lynch, Citigroup, Sanford C. Bernstein, and more. Krawcheck sees positive results coming from communities of women collaborating: "[W]hat is working now is not the individual woman trying to make it on her own separated from the pack, but really women who are supporting each other and coming together and driving real cultural change for the first time. That isn't about empowering anybody. That's about us recognizing the power we have, the strength we have, and using it." #WomensWednesday
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This #WomensWednesday, we are highlighting the youngest trader on the NYSE, Lauren Simmons, who also happens to be the second Black woman to ever hold the position as a full-time trader on the exchange. The message she wants to get across? "To encourage more women to be in these roles and to not let fear stop you from doing amazing things…continue to break glass ceilings until it’s normalized."
Don’t let the movies make you think that investing in the stockmarket is something you can’t do.
Own your money. Make smart decisions for your future. You got this!
I was wrong
I had a lot of misconceptions about what it meant to invest in the stockmarket before I started.
I thought you had to be a man in a suit, and do things with maths or follow the business news really closely.
I thought you needed to be greedy and have to invest in companies that were bad for the planet.
I thought it would be too hard to learn, and take up loads of time to manage my investments.
Wrong. Wrong. Wrong.
And it’s a good thing. Because all of that was just misconveptions of what the stockmarket is, based on movies. And you know what? Now I’m investing in the stockmarket. And my money is building up over time.
To get me started, I found the following websites helpful:
- ASX How-To
- Dummies Guide To Investing
- Investopedia (a US site, but good basics)
- The Barefoot Investor (this article is a little old, so stock recommendations are likely out of date, but the basics are solid!)
- Your bank may also have a guide you can use, but ensure you also get information from sources that don’t have a direct stake in you investing – which is why a few government sources are listed above.
If you’re looking for a way to invest in your long term future, investing in stocks might be one approach to help you build that strong financial future. Or maybe you’re not doing it for your financial future. It’s so you can afford the latest instalment of The Legend Of Zelda in VR, or whatever Nintendo will invent by then. Whatever your priorities, play the long game.
Take a free online course provided by the Australian Stock Exchange to get across the basics and see if it’s something you want to give a go. Yep, there’s new things to learn but take your time, so slowly and make progress. You got this!