Investing for Women Over 40
Investing for Women Over 40
No one can deny the great advancements for women over the past twenty-five years. Women now make up a majority of college graduates, are nearly half of the labor force and are increasingly becoming the primary income source for their households.
Yet, today’s working women still seem to be under educated on matters of investing and personal finance. According to a recent study conducted by Prudential, only 23 percent of women surveyed feel prepared to make financial decisions and only 12 percent are actively seeking to educate themselves about investing.
In the investment classes and workshops that I teach, women over 40 make up 70% of my students. In many cases, financial advisers and family members have discouraged them from handling their own finances. They’re told that wealth building is a man’s domain. That is 100% untrue. Investing is for any woman who seeks a financial education and desires peace of mind.
In the Wealthy Investor Program, I find that women over 40 are highly intuitive and make both great investors and online stock traders. This is important because it’s no secret women tend to live longer than their male counterparts. Translation: they will need more money throughout their lifetime. Therefore, women have an even greater need to save for retirement and pursue a financial education.
For instance, if an employer has a 401(k) plan, conventional wisdom states a woman working in her twenties would be well on the road to a secure financial future if she starts contributing to her 401(k) plan sooner rather than later. A fifty-dollar weekly contribution can make a big difference over ten years. Most 401(k) plans allow an employee to invest as much as 10 percent of their gross income. Under federal law, an employee can contribute up to $17,500 of their gross income, and the company they work for can contribute up to a 3 percent annual match.
Whether because they think it is their only choice or due to a fear of taking control of their own money, most working women over 40 allow their 401(k) dollars to be invested in a mixture of seven to ten mutual funds chosen and offered by the fund’s manager. This is where they go wrong.
Anyone with consistent income can start and contribute to an IRA (Individual Retirement Account). In fact, anyone can open an IRA with as little as fifty dollars. Additionally, you can transfer funds from your company managed 401(k) to an IRA that you manage yourself by investing online. Of course, the next question is what is the better investment, stocks or mutual funds? The answer is that most investors do better choosing individual stocks as long-term investments.
I encourage women in the Wealthy Investor Program to create a financial plan even if they are now in a committed relationship. Your financial plan should include your ability to own a home, take a five-star vacation and, of course, retire without the fear of outliving your money.
Good News
The good news is that anyone can reach these goals. All you need is a financial education and a brokerage account for online investing.
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Yes, you can be a wealthy investor if you get started right now.