Be brave – take control of your financial future
DON’T THINK OF YOURSELF AS AN INVESTOR? IF YOU’VE EVER BOUGHT A HOME OR HAVE A WORKPLACE PENSION, THINK AGAIN, SAYS VICKY SHAW
MANY of us don’t think of ourselves as being savvy investors – and research suggests women may be particularly likely to feel this way.
Around one in five (21%) men aged 18-34 have sought help from a financial adviser, compared with just over one in 10 (12%) women in the same age group, according to Fidelity International. This is despite nearly a quarter (24%) of young women saying they worry about money every day.
So why is this, and how could we all become more confident about investing money? Here, Maike Currie, an investment director at Fidelity International, shares some insights...
FIRSTLY, THINK OF YOURSELF AS AN INVESTOR
YOU may think of yourself as having no experience of investments – but if you have a workplace pension, or you’re a home owner, Maike suggests considering yourself an investor.
“I often see this when I speak to groups of women and say, ‘Who of you invest?’, and then one or two people in the audience will stick up their hands,” Maike explains. “I ask them: ‘OK, so how many of you have a workplace pension?’ And then almost the entire audience will stick up their hands.
“Start thinking of yourself as an investor – and a good place to start is your workplace pension, to build up that confidence and have a look at where you are investing that pension,” she suggests. “Also, if you are stepping onto the property ladder, you are also investing.”
YOU KNOW MORE THAN YOU THINK
MAIKE says people can often be far more conscious of what they don’t know, than what they do.
“What’s happening in the world around you can already tell you a lot about where the investment opportunities lie,” she says. “It’s just about gaining that confidence.”
START EARLY
TIME is a crucial part of investment planning, because the earlier you start, the longer the period your investments have to grow, Maike says.
“People may think, ‘I can’t invest because I don’t have a lot of money’. Well you could start with a regular investment of as little as £50 a month, or a lump sum payment of between £500 to £1,000,” she explains.
“When you start early, you have more time to ride out the ups and downs of the stock market and you have more time to benefit from the power of compound interest (earning ‘returns on returns’).”
UNDERSTAND THE VALUE OF FINANCIAL ADVICE
“LOOK across the market, because there are different options and options that are more affordable,” says Maike. But people should not just focus on the cost of advice – and be put off by it – she adds.
“There are certain points in your life where you do need financial advice – making a decision on how you want to take your retirement, for example,” Maike says. “People think the biggest decision they make in their life is who they’re going to marry and which university they’re going to go to and when they buy a property. But actually, a key decision is when you try to retire, how do you take your retirement savings?”
CONSIDER WHETHER NOW IS A GOOD TIME TO REFLECT ON YOUR FINANCES
MAIKE says that for many people, the coronavirus crisis has been a time for making re-assessments about their lives, and prioritising what is important. For some, this could mean thinking more about long-term finances.
“We know there’s a gender pay gap. What few people talk about is the gender pensions gap, so the knock-on effect of earning less, combined with the fact that women take career breaks to care for children, or to care for sick and elderly relatives,” she says. “All of those have a cumulative impact on your pension savings.”
ENGAGE MORE WITH YOUR INVESTMENTS
MAIKE suggests budding investors should make the most of new technology and apps to keep on top of their finances. Investing can also be a way to support environmental causes, if that’s something you’re passionate about. “One of the most powerful ways you can contribute to the environment is being more engaged with where your investments are,” she says.
THINK LONG-TERM
INVESTMENTS can go down as well as up, particularly amid the current economic uncertainty. But it’s important to think long-term and not make knee-jerk reactions. “Ultimately,” says Maike, “investing should be a long-term gain.”