Invest / Financial Planning

Invest Like You Shop and Watch Your Money Confidence Skyrocket

Kathryn Tuggle  |  September 26, 2018

Most of us are proud of our shopping savvy, but we aren’t as confident when it comes to investing skills. Here’s what to do about it.

Quick, how many of your favorite brands can you name? OK, what about your favorite stocks?  

If I asked you tell me about the best deal you’ve gotten on clothing this year, would that be easier to recall than details on which investments made you the most money?  

If you’re feeling as bad as I was at this point — don’t. Turns out that while 80% of us say we’re savvy and informed shoppers, just 29% of us identify as savvy and informed investors. And the majority of women (68%) say they’re probably missing out on chances to grow their money because they’re unsure about investing, according to a new study by HerMoney Media. In other words, we have a lot of work to do, but we’re going to feel so much better when we do it. Don’t believe me? The vast majority of women we surveyed (87%) said that the more control they take over their money, the better it makes them feel.

And, in case you hadn’t heard, when women invest, we’re better at it than menwe consistently earn higher returns than men (by 40 basis points on average), and succeed at adding more to our account balances over time (12.4% compared to 11.6%), according to a study by Fidelity. Also, according to Schwab’s 2018 Modern Wealth Index, women are great at playing the long game with their investments — if the stock market were to drop 10% within a month, only one in five female investors say they would get out of the market.  

“If you look a the numbers, it’s clear that there’s a disconnect between women’s confidence and their ability,” says Mike Katchen, co-founder and CEO of digital investment platform Wealthsimple. “This is just a confidence issue, because women possess a superior ability.” The good news is that all our shopping savvy can be put to use right where we need it — in our portfolios.

Here’s how to ace your portfolio management with the same confidence that enables you to snag all the best bargains at Nordstrom:

1. Try it on, even if you’re unsure. You might be surprised how good it looks.
Translation: Just invest already. What are you waiting for?

Investing builds muscle memory — after you get over the first-time hurdles,  it gets so much easier, explains Jocelyn Wright, consultant at The American College of Financial Services. “You just have to put your toe in the water. You may make some mistakes, but most can be adjusted in some way,” she says.

2. Compare multiple sellers to ensure you’re getting the best price.
Translation: Spend as much time planning for your retirement as you do scouting out your wedding dress.

“How much time do you spend on shopping in your lifetime or in a year, and how much time do you spend thinking about your money?” Katchen asks.  Think about it this way: Would you rather devote a couple of hours to saving 40% on one purchase, or adding $100K to your bottom line? It’s a no-brainer.

3. It’s always a good time to browse, even when you don’t want to buy anything just yet.
Translation: Build a test portfolio online and see how things work, and decide where you want to invest real money.

If you’re not quite ready to take the plunge into the market, set up a model account, make some “purchases” and test the water before you start dealing with real dollars, Wright suggests. Check out the MarketSim app to manage a $10,000 sample portfolio right from your phone.

4. Never pay full price.
Translation: Buy low, sell high.

Timing is everything when it comes to finding a bargain. “When the markets are low, women who love sales should be freaking out saying, ‘Now is the best time to buy!’” says Cary Carbonaro, CFP and managing director of United Capital of NY and author of “The Money Queen’s Guide for Women Who Want to Build Wealth and Banish Fear.” “When the markets are down, stocks are ‘on sale,’ which is territory we’ve explored many times before — we’re just looking at different goods.”

Since it’s impossible to time exactly what the market’s going to do, the best way to snag sales is to purchase stocks on a consistent and periodic basis. In other words, if you’re making a contribution to your retirement account every pay period (which you should be doing!), look to invest on that same schedule, and you’ll catch all the best bargains as they come up.

5. Consult with your personal shopper for all the best tips, tricks and bargains.
Translation: Consider getting a financial planner who you meet with regularly to get all of your questions answered.

Just like a personal shopper will know the lay of the land with what’s fashionable and what’s going on sale, a financial planner will offer assistance with your budget and strategy, and help you make tweaks to your plan if you need it, Wright says. “Some of us are afraid that we might make a mistake or end up with buyer’s remorse, but a planner can alleviate that stress and anxiety.”

6. There’s no such thing as a bad time to go shopping with friends.
Translation: It’s always good to talk about money with people you trust.

“Why will we talk about sex, but we won’t talk about how much we make, or our struggles with money?” Carbonaro asks. “Money has historically been an intimidating topic for women, and we’ve been socialized not to talk about it. We have to move past this.”

Women shouldn’t think of money as a taboo subject. The next time you’re out with friends, try to bring career and compensation up as a topic for discussion. You may be surprised how eager your friends are to chat, and hopefully you can start learning from one another.

Starting with us! Join our judgment-free zone of like-minded ladies: the HerMoney Facebook group. Let’s talk about everything.


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