Women are particularly wary about the whole investing circus. We’re more likely to say it’s like gambling. More likely to be more mistrusting. To roll our eyes at the pinstripe suit brigade who may as well be on Mars. The industry likes to say that we have “lower risk tolerance” or are a “less adventurous investors”. The truth is we simply don’t want to put our money into things we don’t understand or with people we don’t trust.
Today, just 12% of women in the UK today have a stocks and shares ISA. Compared to 19% of the guys. Yet we’re just as likely to have cash ISAs, insurance, savings accounts, wills and all the other financial stuff there is to deal with.
But here’s the problem. To start with, there’s a gender pay gap. So women start with a lower income. The State Pension Age is also going up. Slowly but surely. Currently this stands at 65, but if you’re 40 today, you’ll have to wait till you are 67 to claim your pension. And just to add insult to injury we are more likely to leave our long-term savings in a limp old cash account making pathetic returns.
So here’s the rub. Choosing to keep your long-term savings in cash can be the worst long-term plan By trying to avoid risk we sit on the side lines and watch inflation nibble away as our money becomes progressively less powerful . Now think about the investment markets which we’re turning our backs on.
If you had invested £15,000 in 2007, over 10 years that would have grown to a healthy £26,593. Think of every doom-laden headline relating to “the market” going back 10 years. You would have weathered all of them to arrive at your destination with a bigger chunk of cash. This long timeframe is important and is like padding, shielding you from the bumps along the way.
In contrast keeping that same £15,000 in cash would have netted you a pretty disappointing £794 over 10 years. When factoring in inflation (the root cause for things getting more expensive year after year) the real world spending value of that profit would be even less.
With investments there are no guarantees. But over any ten year period since markets began, shares have done better than cash 9 times out of 10. So our challenge to you is don’t get mad, get even. If your response to the grey suits in the investment industry is to turn your back – who are you hurting? These days the markets are more user friendly than ever and online quizzes can put you in the best solutions without you needing a PhD in Economics to get through it all! People are getting involved for as little as £25 a month.
If you want to find out more from people who don’t have products to sell, and offer independent free advice, customer reviews of services and some plain-talking tips then come and check us out. Don’t get mad. Get even?
Join the 1000s of people who get our weekly musings on money, great products, top tips and a dollop of opinion.