In recent years, women have made a lot of progress in taking control of our finances. We’re feeling more confident about how we handle money, and we’re also investing more. But what, exactly, do we need to get more women investing for the first time?
A study from Fidelity shows that 67% of women are now investing outside of their retirement accounts, compared to 44% in 2018. Our State of Women 2022 survey found that 80% of women prefer to take the lead with their family’s finances…. But we still need more women investing for the first time. Women still invest less often than men, and the gender wage gap and racial wealth gap have barely budged in two decades. (Research from the National Women’s Law Center found that a 20-year-old woman just starting full-time work today will amass $407,000 less over a 40-year career compared to a man starting in the exact same position. Black women will amass $941,000 less, and Hispanic women will amass $1 million less over their careers compared to white men.)
There are clearly a lot of reasons for these inequalities, but a big one is that it’s hard to dig into your finances when you don’t see people who look like you in the financial space. In other words, representation is everything! But Wall Street is still overwhelmingly white and male, as is the financial planning industry — just 23% of certified financial planners are women, and less than 5% are Black or Latino. In other words, women of all races are facing an uphill battle when it comes to investing for the first time.
READ MORE FROM OUR INTERVIEW: From Wall Street Trader to Social Media Star: How Vivian Tu Became “Your Rich BFF”
Thankfully, Vivian Tu has thoughts on how we can help women take the first steps into their investing journey. She’s an expert on things gender, money, and representation on Wall Street and beyond. She’s a former Wall Street trader, an entrepreneur, and a personal finance educator. Like our team at HerMoney, Vivian has been on a mission to make conversations about money less scary and more accessible to women, people of color, and other marginalized communities. You might know her as @YourRichBFF on social media, where she’s taught 4.5 million followers and counting how to save, invest, and build their careers.
Vivian thinks that looking and behaving differently than your typical man on Wall Street is what has made her so successful as a personal finance influencer. She says it’s really important to acknowledge that “when you are a young person in this economy, in this stage in your life, money looks very different than if you were born back in the era of a 10-year bull market when things only went up,” and that we need to plan for our unique set of challenges. (This includes when you’re getting started as a first-time investor and when you’re planning for retirement.)
We also talk about the importance of finding a mentor who you can relate to and trust when landing your first job. Vivian’s first boss on Wall Street took her under her wing. Her best piece of advice? “You can only save and invest as much as you earn, and you can always earn more money.”
In Mailbag, we answer questions about how to offer your services without them feeling like a sales pitch and whether or not to put money into renovating a home before you put it on the market. In our money tip of the week: the top 5 questions you should ask yourself before merging finances with a partner.
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