Women and finances: Money mindset and financial know-how suit every woman
According to the Global Wealth Report for 2022, wealth development in Western countries has gone in reverse for the first time. Millennials are particularly affected, while women have been able to maintain their 40% share of global wealth in Western countries (USA, Canada, Europe, and Australia). So there is a lot of responsibility for the future. We know from behavioral finance that inherited money is invested in exactly the same way as the testator did, so never change a running system? “Never change a running system” is often said. However, many women start from scratch when it comes to financial knowledge and wealth management. That’s a good thing, because it means they haven’t made any mistakes and can start with the right financial training right away. So what is it all about?
- It depends on your goals, wishes and needs
Many women go into the stock market without a clear objective and without stock market know-how. That’s okay if you’re only investing small sums and experimenting. Curiosity and a sense of adventure then take center stage. But long-term successful investing with larger sums is different. Firstly, think about what your goals are.
Here are a few examples:
I enjoy more free time:
As a mother and entrepreneur, I reinvest 80% of my profits and use the rest to buy myself valuable time by hiring domestic help.
I make provisions for my children:
We invest child allowances from the state directly in the capital market, preferably in shares. Our children will later be able to use this money to go to university, buy a flat, or fulfill other wishes in life.
I am closing my pension gap:
Poverty in old age is female. As mothers, we are doubly and triply at risk. My long-term investments also ensure a high quality of life in old age.
So first of all, it is important that you consider your investment horizon and your investment goal.
2. Your money mindset determines how far you get
You can never go further in investing money than your money mindset allows you to. Your money mindset is about your fundamental attitude and thoughts about money. Money mindset is like your personal glasses through which you view money. A large part of your thoughts, beliefs, and decisions are influenced by your subconscious. You probably already know this from other areas of life, but it also applies to finances. Your attitude toward money can also have a positive or attractive effect. Studies by the Gallup Research Institute show that people with a positive attitude towards money achieve a higher income than people with a negative attitude, all other things being equal.
3. Are you still experimenting or are you already diversifying?
Then it is important that, regardless of your risk appetite, you first build up a portfolio that ensures that you only have to take the market risk in the end. The level of market risk naturally varies depending on whether you invest in an emerging market equity portfolio or a portfolio of government bonds from the USA or the G7 countries.
Most investments fail because they are not diversified enough. A portfolio approach means that you have at least 30 different securities in your portfolio. A certain Henry Markowitz discovered the diversification effect 50 years ago. So the question is, how do you diversify properly? There are lots of different strategies here, which we are happy to introduce to you in our training course.
When is the right time to invest?
The answer is always now. The right time is now. But the question is, how much should you invest? You should start with the 1 percent method and slowly increase your investments to a maximum of 30 percent of your income. Use the budgeting tool to do this. The running costs must be covered before each investment. But feel free to be creative in how you improve your income.
After that, you need a financial cushion that you can use to cover unforeseen costs. The cushion is not just a nest egg, it also allows you to fulfill one of your wishes. You can decide whether you want money or love for the property.
Then you can start investing. You have covered your costs, you have a cushion, and now you want your money to work for you. A second income would give you more freedom. We have mentioned a few examples. Money mindset and money know-how suit every woman, and that’s exactly what you’ll learn in our Angel Training. Starting with the question of what your goals are and how you can generate more income, we will guide you step by step through all investment strategies and asset classes, right through to investing directly in new companies as an angel investor. Here, you can learn how to close the wealth gap. The Angel Training is a training where you are not alone but form cohorts with other women.