In the world of business, men have always had the upper hand, yet when it comes to investing, research tells us that women are better than men. This may sound counterintuitive, considering that women love to shop and look good. Women never seem to have enough of bags, shoes, hairs, jewelleries, and a retinue of accessories.
In working with various clients as an investment advisor, I often found it easier working with women not just because opposite poles attract, but for these seven (7) qualities which I believe we can all learn from.
- Commitment to the Investment Program
As it is with every aspect of human endeavour, commitment to your investment program is a key determinant of its success. A true test of one’s commitment to their investment program is the ability and willingness to defer today’s enjoyment for tomorrows gains, one that many of us fail woefully. Although this is a problem that bedevils the entire human race, women do a better job of managing it.
Men often act on impulse and get caught chasing short-term returns. Women on the other hand are more patient, systematic, better disposed to embrace the long road of investing.
The journey of investing is paved with ups and downs, gains and losses, optimism and pessimism, success is found by sticking to a chosen strategy and trusting the process over a long period.
- Women are Natural Savers
In spite of earning less than men, evidence shows that women save better than men. This dates back to the traditional settings where women often act as family treasurers and thrift (isusu) collectors. Men may have the advantage of earning more, but when taken as a percentage of their earnings, women save more. Women also tends to show more fidelity when entrusted with money. I know an employer who only hires women as his treasurers.
It is nice to make a lot of money, but the ability/willingness to consistently save and invest a significant portion of it is what truly translates to wealth.
- Openness
There are three people who must have the keys to the cupboard where your skeleton is hidden. Your doctor, your spiritual guide and your investment manager. Imagine hiding issues about your health from your doctor, that would be literally shooting yourself in the foot. When it comes to issues around their finances, many people have some uneasiness sharing EVERYTHING with their investment managers.
There is nothing like sharing too much with your investment manager. In fact, the more information he/she has about your finances and even your personal life, the better he is able to tailor your investment strategy to meet your goals.
By DNA construct, men tend to have taller walls around themselves than women. These walls end up limiting the effectiveness of their investment managers.
- Better Homework and Due Diligence
According to Fulton J. Sheen, “it is generally true that man’s nature is more rational and woman’s, more intellectual”. Once interested, a woman will go to any length to get all the facts on a subject. And they bring this ‘deadly’ trait to investing. And boy, do they ask lots of questions?
Researching and selecting the right investments and investment manager and is a very important step on which the success of the entire program rests, and you should not rely too much on anyone to do it for you. You must investigate the credentials, experience and qualifications of your investment managers, as well as understand their business and the investment strategy they have recommended to you.
When it comes to investing, anything you can’t understand is not worth putting your money into.
- Starting Small
The reason a lot of people never achieve their investment goals, is the erroneous notion that they can only start investing when they have saved a large sum of money. We often assume that it makes no sense to start with a small amount because the investment returns will be too small to make any difference to our wealth. So we wait for a windfall from that contract or business, which in many cases don’t materialize for years, and do nothing until it is too late in some cases.
It is far better and less burdensome to start early with any amount no matter how small, and be consistent with growing it over the years than waiting for a lump sum which may be far-fetched. After all they say ‘big trees grow from small acorns’
- Having Clearly Defined Goals
Investing without having any clearly defined goals is like taking medications without a diagnosis. There is a saying that women always know what they want, while men don’t. Men often seems to want everything; they want to have lots of money. When women invest, it is usually for specific goals.
Investing is far more effective when it is for an identifiable and quantifiable goals.
- Women are Better at Managing Debt
Women hardly borrow unless it is very necessary, and when they do, they are better at paying back than men. Because the cost of borrowing is typically higher than the return on most investments, borrowing is bad for most portfolios.
Although borrowing may be inevitable and even good for your portfolio in some instances, managing it smartly without default will do your future wealth a world of good, and improve your credit score. Investment experts often advocate paying off your debts before investing for a reason.
Debt must be used in a manner that does not compromise your investment goals.
Conclusion
As we celebrate the International Women’s Day, it is right to give all women their flowers for the beautiful jobs they are doing as our first teachers, nurturers, home makers, lovers, helpers, bread winners,………. and investment models.
The publications on this website are purely for providing general information relating to the financial market and for improving financial literacy, it makes no personalised recommendation of individual securities or investment strategies. See here for full disclosure information.
