Five financial lessons for women – newsdubai

There is still a significant gender gap when it comes to important issues like financial security. There are many reasons for this, some of which are complex and embedded in societal imbalances, and others are simple and easier to solve. Although it’s a generalization, I’ve found that women tend not to talk freely about topics like investing or financial planning. Of course, we all know that it is in connection and sharing that we can learn the most. In that spirit, I’m sharing below a few lessons I’ve learned along the way. I hope these are helpful to others who – like me – are keen to take the financial reins and give themselves the best chance of a comfortable retirement.

1. Take some risks

If you are in the early stages of your career, you probably have at least 30 to 40 years of accumulation ahead of you, most of which will hopefully be in some form of paid employment – self-managed or more formal. You can afford to take some risks (aligned with your comfort levels) and make a few mistakes. It may be the right time for an appropriate level of “good debt”, for example to get on the property ladder. You probably don’t need to worry too much about market cycles: while they can hurt while you’re experiencing them, most (not all) wash out beyond 30 years.

2. Find out early what your investment behavioral biases are

It is a good idea to identify your behavioral weaknesses. Does your stomach drop when you see a drop in your statement? Do you overestimate your ability to choose the good idea? Do you get worried when your friends tell you about an idea and you think you might be missing out? Find out what will hold you back from making the right decisions and then try to put mechanisms in place to “protect yourself from yourself”.

3. Don’t give in to inertia or the “I don’t have time to fix my admin” excuse

Most people in their 30s are juggling a job, perhaps starting a family, managing their extended family and other broader responsibilities. There may be times when months go by and you realize you haven’t sorted out the tax-free investment for your child or increased your contribution rate. Don’t fall for that excuse. Treat every important, non-urgent decision as if you were retiring in three months, not three decades.

4. Form professional and social networks, especially with other women

We all struggle to raise our hands and admit we need help. Learning from other women can be a powerful tool. This can inspire you to take ownership of your own financial plan. Instead of seeing women-led groups as just social occasions (eg book clubs), you can also join or start a women-only investment or savings club. Contributing ideas in this kind of forum creates a safe and fun place to gain confidence by learning from other women’s investment mistakes or successes.

5. Think about what you would say to the next generation about money

I’ve had to think hard about what I want my daughters to understand about money, taking risks, the importance of savings, and the beauty of compounding values ​​over time. Admittedly, the latter can be a somewhat dry subject and is harder to teach when you’re competing with online games, friends, and sports. I’ve tried to put their decisions in their hands and reward them when they postpone immediate spending by, for example, doubling any value they choose to save. We’ve also given them their own accounting so they can see how values ​​can rise (and fall) over time. These conversations have also been important to me as I often reflect on the lessons I wish I had learned earlier.

After a few failed attempts, I was finally rewarded when my 13 year old got a birthday present of R200. She looked at it solemnly for a while and then handed it to me and said, “Please, can you take it to work tomorrow and make it grow!” So if there’s someone in your life or community who you think could benefit from hearing about your financial journey, consider paying it forward.

Tamryn Lamb is Head of Retail Distribution at Allan Gray.