(WHTM) — During the month when we celebrate women, there is a spotlight on the importance of them taking control of their money. Women are investing more and it is really paying off.
“It’s been a challenging year for everyone, particularly women, but it’s also been an opportunity for them to re-prioritize and focus on what’s important to them. And then think about how they align their money to help them achieve those goals,” said Lorna Kapusta, the head of Women Investors at Fidelity.
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“For women in particular, we just need to normalize the money conversation, and make it a part of our regular dialogue,” Kapusta said.
Kapusta says traditionally women have been known as the savers while men took the risks of investing, but that needs to change.
“When women invest they see results. In fact, on average they earn higher returns than their male counterparts,” Kapusta said.
Two-thirds of women are now investing, which is a 50% increase from 2018, and they are seeing success. Kapusta says that’s because women do three things really well.
- They figure out what is important and line up their money to reach those goals
- They’re investing on a more consistent base rather than trying to time the market
- They take a buy and hold approach
“They have their plan, they know their goals and they stick with it so they don’t make rash and emotional moves of buying and selling and that recipe seems to work,” Kapusta says.
So, why is it important for women to get involved?
“First of all, there are a number of factors that are unique for women such as longevity. Oftentimes, women are caregivers — 75% of caregivers are women — that does impact how much we save over time and have for our own longevity as well as our family and what we’re looking to achieve,” Kapusta said.
She also stresses that investing is the way to make your money work even harder for you.
“$20,000 in a savings account earning .06% over 10 years translates to $120 in earnings. That same $20,000 in a conservative mix investment portfolio based on historical returns has the potential to earn $12,795. That’s a big difference,” she added.
Kapusta says typically women have held back from investing because they do not think they know enough about it. But, she adds that this is something women can do and should do.