We all like to think that if we are smart and work hard enough that we will be able to live the life we want. I think most of us also know, in the real world, there are some forces working against some of us more than others.

This post covers one of those mysterious, mystical (not at all….) forces that stops women from achieving their biggest dreams. It’s a topic that I can't. stop. talking. about:

The investing gap. 

A quick note before we go any further! Talking about money can be weird and sensitive. A study by Fidelity discovered...

"Despite the fact that 92 percent of the women involved in the study want to learn more about financial planning, and 83 percent want to get more involved in their finances in the next year, a whopping 80 percent admitted that they have refrained from discussing money with family and friends." (Source: this article).

I believe talking about hard topics is the easiest form of activism. Whether investing, negotiating, a job change, a purchase, our friends are and can be our most trusted advisors. This type of knowledge sharing also helps beyond our individual needs. Knowing what's going on and how to support each other helps us battle all the gaps (pay, investing, education, leadership, etc.) But I know it isn't easy. So pat yourself on the back for reading! (Here's a funny real talk piece about this awkwardness that we should get over.)

Okay, let’s get back to it!

What is the investing gap (or gender investing gap)?

In short, women invest later, less and less aggressively over their lifetime than men. Which results in women retiring with ~30% less than men. Or another article cited, for a woman making $105K annually, a difference of over ~$1M dollars over her lifetime. 1 MILLION DOLLARS. 

Wait, why aren't women investing?

That's a complicated question for me to answer. So…let’s phone some friends.

• Ellevest has a great piece on the mistakes women make that lead them to invest less

• If you like infographics, you'll love this one

• The funny thing is, there are some studies showing that as a whole women are actually BETTER investors than men.

I know it's important but, I don't have enough to invest right now.

It's a common misconception that you need to be making a lot to be able to invest. Apps like Acorns and Digit will pull small amounts to at least get you started (Acorns actually invests it, Digit you'll have to manually invest that money). But the key is getting started. Because compound interest is the bomb.com. See the articles below for how powerful it is. 

• A super easy to understand explanation of what the heck this compound interest thing is

• A great example on how you can put less money in than your peers and get more out. 

• An illustrative example (read: a little rosy eyed) on how saving $4 a day (aka the cost of your latte) can lead to $1M in retirement

Isn't it more important to focus on the pay gap?

First, let’s take a pause to acknowledge it’s annoying there are so many gaps?!

Okay. Moving on. Obviously all the gaps are important. But because of compound interest, the investing gaps allows the money we make TODAY to build a stronger foundation for later (when we might take a pause in earnings to have kids or worse, run into the s#!t that results in the pay gap...another topic). But they don't exist in isolation. This article covers some of the interplays between all these topics. 

But how do I start? There are so. many. options. 

So real. Analysis paralysis is a big hump to get over. You know that factoid that women only apply for jobs they feel 100% qualified for, while men apply even if they only hit 60%? (Apply for the job, girl!) Don't feel the need to completely understand every acronym, stat and definition before you make an investment. Here are some good rules of thumb to help you push through:

• We can be "riskier" while we're young. In your overall portfolio (across your 401K and any other investments), in your 20s and 30s, it's generally recommended to be 70-100% invested in stocks, with the remaining in "safer" investments like bonds or cash.

  • Why? For long term goals like retirement, where you won't be pulling the money out for decades, you have plenty of time to ride the ups and downs of the stock market in order to get higher returns over time.

  • Diversity (as in all things) is good. Especially if you're a beginner, Mutual Funds, ETFs, Index Funds are easier and safer options than trying to pick the next Apple or Amazon (where there's the potential risk of that one company failing). 

    • Why? These funds are all made up of hundreds, if not thousands, of stocks. If one does poorly, others generally make up for it. They're a way to get exposure to the stock market without a ton of risk.

Reminder - I'm not a financial advisor or any type of professional here so please do your own research on what's right for you!