Contrary to popular belief, there isn’t as significant of a financial literacy gap as there is a confidence gap between men and women. With a financial confidence gap of 60%, even women who are financially literate have trouble with making investment decisions. Women tend to be more conservative when making money decisions, which prevents them from significantly building their financial fortress. Although it’s good to know as much information about your investments as possible, the need for knowledge might get in the way of making successful decisions.
Women might consider saving money in their savings accounts as investing, however, this might not be the reality. Saving is holding your money in a safe account for a temporary period and investing is putting that money in investments to grow for a long period of time in the hopes of becoming a significant if not primary income resource. With very low-interest rates of savings accounts, money that goes into these accounts can only be ‘savings’ and not investments.
By taking advantage of compound interest, you can grow your investments significantly. On the other side, keeping most of your money in savings account you can significantly miss out on investing opportunities.
A significant way to fix the confidence issue is to truly understand what the worst outcome might possibly be and how we might react to that. Do the potential benefits outweigh the potential costs? Working with a financial expert who can explain all the details of your investments with you can help you to get answers to these questions and make educated decisions without having the fear factor on the lead. If you can handle the worst possible outcome after having a knowledgeable understanding, you can consider taking the risk.
How can we gain this knowledge power? By having money conversations!
If you have questions about your investments, you should always ask your financial planner. There are no stupid questions when it comes to handling your money! As much as you might perceive your questions as silly or embarrassing, you need to have a complete understanding of how your money is invested and managed. This also builds the trust element between you and your advisor and helps you to take advantage of better investing decisions.
Talking and asking about money might be uncomfortable, however, they are vital for you to step out of your comfort zone and take the reigns on your finances. By asking questions that might embarrass you, you can build your confidence, gain significant financial knowledge and better understand your financial opportunities.
You aren’t the only one who might be having some challenges with money! If you have friends or a community you feel comfortable with, open up to them about financial topics you want to know about. Are you curious about who to work with for investments? Your social network might be working with great people you might be unaware of. By reaching out, you can broaden your perspective on financial topics. If your questions are more technical, you can always reach out to a financial planner to gain expert insights!
Working with a financial professional can significantly lift the weight off your shoulders when it comes to investing. Although you might be extremely knowledgeable, working with a financial expert with years of experience might bring you greater opportunities and expertise. Not to mention that it will put your mind at ease! If you want to have greater peace of mind around your investments, a financial planner is a great option. As professionals, they can inform you of everything you need to know while doing the hard work.
Do you have a financial plan if you lose your job, spouse or health? Having investments that become a source of income can protect you from these life risks you might not be expecting. If you want to get started with investing planning, book our complimentary 30-minute consultation session with our team!
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