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6 Ways Women Can Boost Their Financial Confidence

Take concrete actions so that you can become financially secure.

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Women Make Better Investors Despite Having Less Financial Confidence Than Men

When it comes to money and financial decisions, women are less confident than men.

In a report by Harvard Business Review, women across Asia Pacific are less confident than men, even though they are more confident than their counterparts in the United States.

Much of this is due to Asia’s economic boom over the past decade, which has accelerated the growth of the female market. 

More women in Asia are business and tech-savvy because they are used to making financial decisions that affect billions in corporate assets, as well as controlling and deploying significant personal assets.

Still, women across the board lag men when it comes to financial confidence.

According to the Financial Times, women are not confident making decisions about investing on their own and usually want to make the decision together with their man.

This is with the exception of property, where women are more confident making decisions, even though properties are rather risky investments.

After all, property entails taking on huge debt, managing tenants if you rent out your property, and dealing with property and rental property tax. 

It’s far simpler to invest your money in an exchange traded fund over the long-term than deal with property. 

But because of property’s historical gains as an asset class, women seem to be more comfortable dealing with these investing complexities because they’re perceived to be safer investments.

Although women prefer to consult and make investment decisions with men, men do not necessarily know better. 

In a study by Warwick Business School, it’s found that:

  • Women outperform men at investing by 1.8 per cent
  • Men are more likely to pick more speculative stocks
  • Women investors have a more long-term perspective

In another report by Hargreaves Lansdown, a leading UK savings and investment platform, it’s found that:

  • Women investors on average saw their investments increase 0.81 per cent more than men over a three-year period
  • If this pattern were to continue for 30 years, the average woman would end up with a portfolio worth 25 per cent more than the average man

Clearly, women are capable of being great investors.

4 Reasons Why Women Outperform Men As Investors

There are 4 reasons women outperform men as investors, according to  the report by Hargreaves Lansdown.

1. Women are more likely to have naturally diverse portfolios

Some 44% of women have either most or all of their portfolio in funds – compared with only 38% of men. 

This naturally diversifies their portfolios more quickly, because fund managers invest in a number of companies, so even a small investment is quickly split in several different ways.

This has the benefit of spreading the risk, so if one share doesn’t do well, it may be offset by growth in others. Diversified portfolios tend to be less volatile.

2. Women tend to hold less risky investments

The analysis found women were less likely to invest in riskier assets – such as single company shares of smaller firms or those listed on the Alternative Investment Market in the UK with higher growth potential but also higher risk. 

As a result, women were 50% less likely to suffer a loss of 30% or more.

3. Women are more likely to ‘buy and hold’

Women trade shares 49% less frequently than men, and funds 67% less frequently, so they are not incurring trading costs.

There is a flip side to this, because even with a buy and hold strategy you do need to revisit your portfolio regularly to make sure your investments still suit your needs.

4. Women are more likely to invest through a tax-free ISA  

Despite fewer women opening a stocks and shares ISA, of those who do invest, some 65% of women invest through an ISA, compared to 58% of men. 

An ISA is an Individual Savings Account in the UK that shields investments from tax. 

By investing in an ISA, they are sheltering their investments from income tax and capital gains tax, and avoiding them from eating into their returns. 

In the UK, women are also 50% more likely to be the named party on a Junior ISA – invested on behalf of a child. 

Investments made from your CPF Special Account are also shielded from tax in Singapore.

Popular tax exempt accounts in the US are the Roth IRA and Roth 401(k). 

Why Is Taking Ownership of Our Financial Life Especially Important For Women?

We didn’t need the pandemic to show us that life is unpredictable.

Spouses get sick and can’t work, or lose their jobs, or unfortunately pass away.

Marriages and relationships can end for a variety of reasons.

Women, globally are living longer and outliving men. Which means, women will spend a significant portion of their adult lives alone.

If you work, you could also lose your job. 

The bottom line is, you can’t depend on anyone else for your own financial security. Whether it’s a spouse, a company or the government.

Before you think that’s frightening, let me offer an alternative, more hopeful, view.

It just means you hold the power in your hands to take charge of your financial life!

Financial Freedom Means Different Things To Different People…And Also The Same Thing

So many people talk about wanting financial freedom and financial security. 

I conducted a survey among women across various age groups recently about the top thing they wanted to learn when it comes to personal finance.

Almost all my survey respondents said the most important thing was financial security. 

They wanted financial security for a variety of reasons.

Some wanted to save up for their own retirement, their kids’ education or make sure they can take care of their elderly parents and their own healthcare costs.

Some wanted to save up for a wedding or buy their first house.

We want to be able to take care of our loved ones, ourselves and live a life we dream of.

You’ve heard about all kinds of ways to secure your financial future.

Some recommend living a frugal life, saving every last cent you have so you can retire at the age of 35. This is referred to as the FIRE movement.

Others talk about starting a side business or taking a second job to earn extra money that you can put away for retirement.

Then there’s that dirty little four letter word, DEBT.

This is about paying your debt off and never getting into debt again.

In the end, we all just want to know we’ll be okay financially.

But life isn’t always perfect and things happen. 

Financial Freedom Begins With Working On Yourself First

What if you’re 40 years old, and find yourself out of a job, with little savings and a huge debt?

Worse still, you have a mortgage, car loan, 2 young kids, and your spouse has lost his income?

This was the exact situation I found myself in a few years ago after we had to close down a business my husband and I started because it was no longer financially viable.

After the shame, disappointment and anger at this ‘failure’ came the fear as we faced this huge debt at a time in our careers when we should have accumulated the most savings and wealth.

I realized that the reason a highly educated, driven and independent woman like me, could end up with such huge debt wasn’t because I didn’t know how to save, invest or manage my money.

It’s because I had unexamined money stories and beliefs that money solves all my problems.

I also lacked financial confidence since I’d been raised to be financially dependent on someone else. I didn’t believe I could be good with money and numbers.

Eventually, I realized that if I really wanted to be financially free and experience long-lasting peace of mind, free from financial fear and worry, I’d have to work on my money beliefs, stories, and the relationship I had with money first. 

The Only Real Prison Keeping You From Financial Freedom is Fear

Sure, you need to take action like increase your income level, spend less, learn how to invest, and accumulate that knowledge and information. 

But without a clear vision of who you are around money and what money represents to you at your deepest level, it’s easy to get anxious, resentful or stressed out trying to make more money, spend less and grow wealth.

Aung Sung Syu Kyi says, 

‘The only real prison is fear, and the only real freedom is freedom from fear.’

True financial freedom for me, is freedom from the fear and worry that I won’t have enough to survive, thrive, and take care of my family.

In other words, to be financially confident.

Imagine if you got to a point where no matter what happens in your external world, you have faith and belief in yourself that you’ll be alright.

No matter what happens, you’re confident you can overcome any challenge and figure out a way to bounce back from the setback or failure you experienced.

So yes, I negotiated for a higher pay and multiplied my sources of incomes.

But I realized, all these actions were just the by-product of something deeper that had taken place. 

How to Discard Your Fear And Be Financially Free

What’s really transformed me and my financial life and gave me courage, determination, and persistence to achieve all of these goals was a result of spending years working on my mindset, my beliefs, and my identity to build up my financial confidence.

They ultimately guided my actions and behaviors that led me to my outcomes and results.

I had discarded my old self – the one that lived in a world of lack, fear, scarcity and low confidence – and put on my new self.

Every day for the past few years, I wrote down a list of what my new self would be like. 

Over the years, the list has grown and evolved to what it is today:

  • Poised
  • Confident
  • Charming
  • Spontaneous
  • Strong
  • Intellectual
  • Positive
  • Hopeful
  • Money Conscious
  • Determined
  • Persistent
  • Patient
  • Composed
  • Compassionate
  • Loving
  • Wise
  • Peaceful
  • Connected
  • Resilient
  • Adaptable
  • Entrepreneurial
  • Integrity

It’s a long list, but it’s my list and different situations have called for a different trait to stand out more than others to help me get through what I needed to, so that I can achieve what I set out to achieve.

6 Ways To Boost Your Financial Confidence 

Here are 6 concrete actions you can take today to begin developing your financial confidence.

1. Educate Yourself

The first step to boosting your financial confidence is to educate yourself.

Lack of confidence is often a result of lack of knowledge about a subject. 

That’s the reason why people who are just starting out in their careers tend to feel less confident compared to someone who’s been doing the job for a few years. 

When it comes to money and investing, no one should be more interested in it than you because it’s your hard earned money.

And taking ownership of your financial life means knowing exactly what your current financial position is and where you want to take it.

To do that requires some effort on your part to take stock of where your money is coming and going. 

But content and knowledge alone are not enough.

Positive thinking and affirmations are also not enough. Sometimes they can even backfire when those affirmations you keep telling yourself don’t seem to be happening for you.

2. Uncover Your Subconscious Thoughts & Beliefs About Money

Our subconscious mind and beliefs drive 95% to 99% of our thoughts and behaviors. 

So while you fill that 5% of your conscious mind with more information and content, it’s really the other 95% to 99% that’s behind what you actually end up doing.

Combined with a system to sustain your actions over time is what will get you long term tangible results.

This took a few years for me to learn. 

It’s been what’s motivated me to pivot to my second career as a financial education instructor in addition to being a leadership trainer. 

I realized more financial literacy content was just not enough to sustain healthy financial behaviors. 

To become financially confident and take concrete steps to transform your financial life, you need to work on that 95% to 99% of your inner self – your relationship with money, money stories & beliefs

You’ll need to examine the thoughts and beliefs that got you to where you are today. 

Here are some questions to get you started:

  • Do you believe money solves all problems?
  • Is something that’s more expensive is usually better?
  • How do you treat people who are wealthy versus those who are poor?
  • Do you see wealthy people as greedy or selfish and poor people as lazy?
  • Does asking for money make you money-faced?

The answers to these questions will help you understand your relationship with money better.

3. Create A New Story

Once you’ve uncovered the subconscious thoughts and beliefs driving your behaviors, you can then decide if this is who you want to continue to be, or if you want to make some changes.

If you do, then you’ve got to start getting some new beliefs and stories about yourself. 

To do this, keep testing your new beliefs. 

For example, I wanted to change my old belief about money and investing being boring, to a belief that money and investing is fun, and helps me to live the life of my dreams.

To disprove my old belief, I look for people, books, shows about money & finance that are fun, relatable and inspiring instead of boring, technical and full of financial jargon.

4. Focus On Small, Consistent Actions

After you’ve done the first 3 steps, you’ll want to set up a system that supports consistent actions towards your new identity and story.

There are many resources out there about forming new habits and sticking with them.

Two of my favourites are Atomic Habits by James Clear and Tiny Habits by BJ Fogg.

In both books, the authors talk about starting small when trying to instill a new habit.

As I worked towards getting our finances under control and paying off our debt, I started small by downloading an expense app to track my daily spending.

Then I listed my expenses in a spreadsheet. 

That led me to discover I had some money leaks that I had to stop.

I also realized I had more money invested than I thought I did, so I felt like I could breathe a little.

Since starting with that small habit of tracking my daily expenses, I’ve now created multiple sources of income and set up a system of investing that doesn’t take up a ton of my time. 

It’s also led to me starting a second career as a financial education instructor, applying personal development principles to help women become financially confident.

Most importantly, I’ve learned how to stay calm and sane while working on paying off our debt, saving for retirement and our kids’ education.

Not only did my financial confidence grow, but my relationship with my husband also improved.

We hardly fight about money anymore.

This in turn has translated to a more loving relationship with our kids because we’re not a couple of irritated, stressed out, and resentful parents.

5. Get A New Identity That Supports Your New Story

Changing your identity and how you see yourself is also key when you’re living out your new story. 

Unless you change your self-identity and all the actions associated with your new identity, it’s easy to go back to your old ways because in your mind, you’re still your old self.

It’s difficult to persist with your new actions when you still associate with your old identity.

I love the example James Clear uses about 2 smokers trying to quit smoking.

A fellow smoker comes along and asks these two people to join him for a smoke.

Person A says, ‘No thanks, I’m trying to quit.’

Person B says, ‘No thanks, I’m not a smoker.’

Who do you think will be more successful in taking the needed actions to quit smoking and stay that way?

That’s right, Person B. That’s because Person B doesn’t identify herself as a smoker. 

Instead, she identifies herself as a non-smoker.

She’s more likely to follow through and stick with the actions of a non-smoker. 

For example, a non-smoker doesn’t usually hang out in the smoking corner because they wouldn’t want to breathe in that secondhand smoke.

Someone who still identifies as an ex-smoker probably wouldn’t mind hanging out in the smoking corner to socialize with her friends. That makes it far easier to relapse. 

6. Change Your Environment If It Doesn’t Support Your New Identity

Your environment and the people you surround yourself with is also a major factor in helping to build up or destroy your confidence.

I remember still identifying myself as a shy, timid person who lacked the confidence to speak my mind years ago. 

I used to worry about what people would think, would they laugh at me, or would I come across as stupid if I shared my opinion in a meeting?

This was at a time when I was working with bosses who told me I wasn’t as good as I believed I was. Some literally called you stupid in the meeting if you said something that they didn’t think made sense.

And the thing was, I bought their opinion of me, making it a self-fulfilling prophecy. 

I was constantly second-guessing myself and my worth.

One day, I decided enough was enough. I was stagnating in a role in terms of my personal growth and compensation. 

So after 6 years in my comfort zone, I struck out to look for another job.

My new manager believed in me more than I did in myself. 

Since then, I’d only work with managers who believed in me. 

From that point, my own confidence sky-rocketed. 

This translated into financial confidence as I found the strength and courage to successfully ask for more money to better reflect my value and worth for the work I did.

This was something I’d never had the guts to do before because I was constantly led to believe I couldn’t do that because I wasn’t worth that much.

From being terrified of speaking up in meetings, much less in front of an audience or making presentations, I became a trainer where all I did was conduct in-person, stand-up training in front of a class.

Summary

Although women may lack financial confidence, they make better investors. 

It’s important especially for women to take charge of their financial lives because we are living longer and relegating our decisions about our money and finances to someone else puts us in a vulnerable and powerless position. 

The good news is, boosting your financial confidence doesn’t require you to learn about boring, technical financial products or content. 

True financial freedom and confidence begins with your inner self. 

This means working on your mindset, identity and behaviors in combination with educating yourself about money and investing. 

To start, you can do the following:

  1. Educate Yourself
  2. Uncover Your Subconscious Thoughts & Beliefs About Money
  3. Create A New Story
  4. Focus On Small, Consistent Actions
  5. Get A New Identity That Supports Your New Story
  6. Change Your Environment If It Doesn’t Support Your New Identity

These steps will not only boost your confidence, they will help you become the person who achieves what she sets out to achieve and transform your financial life!


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