According to Ellevest, an investment platform created by women for women, “of all the assets controlled by women, 71% is in cash – aka not invested.” Statistically, women are less likely to invest, and even those who do invest tend to wait until they are older to start.

Most women don’t think they know enough about investing to properly grow their savings; therefore, they wait to start investing until they feel they’re more financially stable and believe they can risk the possibility of losing money. A common misconception around investing is that you have to be an expert in the industry to succeed when the reality is that there are so many tools and resources that make easy to start investing with as little as your pocket change.

Why Should Every Woman Invest?

According to a study by Merrill Lynch, 41% of women wish they invested more of their money. But why is it such a necessary part of personal finance?

1. Financial Equality

First and foremost, it’s important for women to be able to achieve a sense of financial equality and independence. In the face of issues like the gender pay gap and the pink tax, investing is one of the best ways for women to ensure that they have the potential to accumulate the same amount of wealth as men.

“It’s important for women to be able to walk away from situations that are hurting or not serving them – whether that’s a bad job or a bad relationship,” comments Ellevest’s Susan Thompson. “You should be able to have your own financial power to make decisions that enable you to care for yourself.”

2. Reaching Financial Goals

Whether you are looking to go back to school, save up an emergency fund, send your kids to college, save up for a large spend like a house or wedding, or just grow your overall wealth, investing is arguably the best way to reach those goals.

3. Saving for Retirement

Women earn approximately 83 cents to every dollar a man earns, on average. That means that even if we’re saving the same percentage of our income as men, we’re not going to save the same amount. In addition, women also tend to live longer. Basically, less money has to last longer when women simply save their money without an investing strategy.

Many employers do a match on a 401(k) or similar retirement savings plan. If you’re unsure about whether or not investing is really a good option for you, enroll in your employer’s program and watch as your savings grow.

Why Is a Savings Account Alone Not Enough?

Cash that sits in a checking account, safety deposit box, or under the mattress is actually depreciating in value year-over-year because of inflation. That means you’re essentially losing money when you aren’t actively growing your savings.

Check out the chart below, and you can see that a solid investments strategy can help you grow your savings exponentially over the course of 10, 20, and 30 years.

How to “Invest Like A Woman”

Despite the stereotypical belief that we aren’t good investors, women actually tend to possess quite a few qualities that give us an edge in the market.

Kiplinger’s article on the secrets of women investors puts it perfectly: “Studies show that men are more inclined to behave like baseball sluggers, who swing for the fences, even if it means running the risk of striking out far more often. Women, by contrast, are more like contact hitters, who are satisfied with a string of singles.”

Because women approach risk differently, we’re less likely to see large swings in our portfolio values, meaning a steadier growth over time.

Studies have also found that women are:

• Less likely to trade investments, which translates into almost a 1% higher increase in investment earnings per year than men (who trade 45% more frequently than women).
• Long-term planners, meaning we focus on our specific growth goals rather than chasing risky returns that may end up costing us.
• More likely to ask for financial help. Just because 60% of men think they are experts at investing does not mean they know everything there is to know about the market. Women being more willing to seek out trusted financial advice from experts in the industry give us more opportunities to grow our wealth.

So, how do you leverage these qualities in your investments strategy?

Choose a Strategy That Works for You

Not all investing strategies are created equal, and unfortunately, most of the “gender-neutral” investing tools available to the public ultimately hinder the potential earnings for women.

Ellevest released a side-by-side comparison of a retirement scenario where a man and a woman both started saving at 30 years old, earning $85,000, and investing 10% of their salaries over the course of 37 years.

The study found that because of the gender pay gap and the natural progression of women’s careers (our salaries tend to peak at 40 while men’s salaries tend to peak at 55, and women are much more likely to take long career breaks), the woman would have about $320,000 less by the time she retires based on average market returns. That means she’ll have less money to live off of even though she’s likely to live years longer than the man.

Take these differences into consideration when you’re defining your goals, retirement plan, and investment strategies.

Figure Out Budget Allocation

Experts suggest a 50/30/20 philosophy when allocating your budget. You should strive to keep your “needs” at 50 percent of your income – food, rent/mortgage, clothes, utilities, etc. Then, 30% should be dedicated to self-care. Have some fun, get a manicure, go out to eat with friends. Lastly, 20% should be saved or invested.

Figuring out how much you should invest vs. set aside in a short-term savings account comes down to how much risk you’re willing to undertake. Year over year, the market has been steadily rising, but that doesn’t mean that a return is guaranteed. The golden rule is to never invest more than you’re willing to lose, especially if you’re going after aggressive or volatile markets.

Once you decide, Susan Thompson suggests setting up automatic withdrawals each month, even if it’s only $20 a month.

“In our mind, investing should be a ritual like any other that we undertake,” said Thompson. “Make a habit of putting money back towards your future, even if it’s a small amount.”

Know the Basics of Investing

Even though you don’t have to be a stock market expert, knowing the basics can help you communicate your goals and understand what’s happening with your money.

Some of the different types of assets you can invest in:

Stocks. They represent a part ownership in a company or corporation, also known as business equity. Basically, when a company performs well, the stock tends to increase in value. Stocks tend to be more volatile investments, meaning they can give you a high return on your investment long-term but tend to have larger swings in value in the short-term.
Bonds. Also known as fixed-income investments, bonds are one of the most popular assets for conservative portfolios. While they tend to be more stable than stocks or other volatile investments, they also have a lower return potential.
Money Market Accounts. When investing in these types of accounts, you’re allowing the bank to make low-risk investments into certificates of deposit (CDs) or government securities. The best money market accounts are low-return, yet stable investment assets.
Real Estate. Property has a tendency to rise in value over time, and there is a subset of investors who specialize in transforming real estate investments into high returns.
Cryptocurrencies. Bitcoin and blockchain technologies are continuing to grow in popularity. Experts expect for the current volatile market to become more stable in the coming years, which means

Conservative vs. Aggressive Investment Strategies

Investing and portfolio strategies are typically broken down into two main categories: aggressive and conservative. Aggressive strategies will put more money into stocks or other volatile markets such as cryptocurrencies. Conservative strategies will put more into bonds and money market accounts.

Aggressive investments typically get you a much higher return over time, but they’re also riskier. By contrast, conservative investments are more stable, but without the opportunity for the maximum return.

Your personal strategy can be a mix of both, and your strategy should ultimately be based on your financial goals, timeline, and risk tolerance.

If you’re looking at short-term financial goals such as saving up for a wedding or looking to pull together an emergency fund, a more conservative route will work best. This limits the risk of you losing money while still promising a good return.

However, if you’re looking to save for retirement over the course of 20 or 30 years, an aggressive strategy is going to get you the best return possible. While aggressive markets tend to fluctuate widely in the short term, the overall market trends upward an average of 10% each year. When you can afford to be patient in the market (something women are proven to be better at than men), an aggressive strategy can definitely pay off in your favor.

Also, remember that your investment strategy is not set in stone. As your financial goals change and as you get closer to when you plan on pulling money out of your investment accounts, it’s important to readjust your priorities and risk tolerance.

Choose the Right Investment Platform

If you don’t consider yourself an investment expert (and frankly, even if you do), getting professional help is a good idea. There are a lot of options out there for both the DIY-er and someone looking for one-on-one help. However, be careful about who you choose to trust with your money.

1.  Choose a fiduciary.

A fiduciary is a company or organization that is legally bound to do the right thing by their clients. Not all brokers or investment firms classify as a fiduciary, so make sure to ask before officially signing with anyone. If you find a great firm that isn’t a fiduciary, just make sure that they put client security and well-being above personal gain.

2. Know their strategy.

Talk to any potential firms about their strategy for investments. Some firms craft personalized portfolios that you have a heavy hand in selecting. Others use a formula and automated system for choosing your investments. Every firm and platform is different, so make sure that the firm you choose uses a strategy that will work best for you.

For example, most robo-investment platforms use an investment algorithm that is based on a man’s salary projections and career lifetime, so they aren’t always the best choices for a personalized approach to fit a woman’s financial goals for the long-term.

3. Consider your budget.

Take a serious look at the minimum balance requirements and fees for each platform or firm you’re considering. If you have a tighter budget, it will be worth it to find a platform or firm structured like Ellevest, where you can choose an account

4. Trust your gut.

If you get an “off” feeling about a firm or platform that you’re considering, trust it. You are trusting a company with your financial future, and in order to do that, you have to trust that they are acting in your best interest. Take the time to find a platform or firm that serves you and your financial goals.

5. Look for firms that support women.

While women investors are on the rise, there is still a gap between the number of men and women are in the investments market. Make sure you’re choosing a firm that will support your financial goals and understand the unique challenges that women face in the industry. Also take a look at the companies that these firms and platforms invest in. Are any of them led by women? Do they support women? While it may not immediately affect the return you get, choosing a firm or platform with a pro-women mindset will help us gain financial equality in the long-run.

Resources: Where to Look for Help and Inspiration

Ellevest’s Susan Thompson’s first piece of advice for women looking to get started was to dig into some research.

“Women are very fortunate today because there is an abundance of really good quality content online,” said Thompson. “Go places where the content can just get you thinking about your options.”

Check out a few of these resources for a deeper look at why and how you should be investing your savings and how you can maximize your return:

• Ellevest’s “What The Elle” Newsletter. The Ellevest site as a whole is my favorite resource for women-specific investment research and advice. They have content about the gender pay gap, how to invest responsibly, how to negotiate for a raise, and every financial topic in between. Their co-founder and CEO Sallie Krawcheck has a monthly newsletter called “What The Elle” that gives insights into everyday investing and financial advice for women.
• Women Investing Network’s Podcast. Twice a week, this podcast talks with powerhouse authors, entrepreneurs, financial experts, and top-tier investors about insider tips and tricks to mastering your personal finances.
• The Everygirl. While this site isn’t purely focused on finance or investing, they have a great resource pool of advice from everyday women. They cover topics on how to bridge the gender pay gap, investing 101, investing apps, and more.
• Money Girl. This podcast covers the entire sphere of personal finance in short, 10-minute episodes that break down incredibly complex topics.
• Stock Market Simulator App. This app will let you try your hand at the U.S. stock market to invest in virtual funds without any real risk. While this isn’t recommended as a decision-making tool, you can get the hang of the stock market and learn more about the investments industry.
• Wall Street Journal. Sometimes this publication can seem like a daunting resource tool for the beginner, but it’s one of the best platforms for staying up-to-date on all things wall street. You’ll be able to take a look at investment trends, tips and tricks to maximize your return, and more.

If you’re looking for a way to automate your own investment strategy or want to start investing on a small-scale without using a broker or firm, an investment app might be the right platform for you. If you type in “investment apps” in the app store search tool, hundreds of options will pull up, but not all will help you grow your savings to hit a solid return.

Robinhood

Robinhood is a commission-free trading app. While it’s functionality is basic without many research or analytic tools, if you’re looking for a basic platform for trading stocks, this is a great option for you.

Fidelity

The College Investor lists Fidelity as their favorite app that allows users to invest for free. They offer no-minimum IRAs and a range of commission-free ETFs, making this the perfect app for those of you who are looking to manage your own investments on a budget.

E*Trade

One of the more well-known trading apps, E*Trade started as a desktop online broker. The app works similarly to their website, including offering an Investor Education Center.

Acorns

While it’s not really a trading app, you can invest your extra change or add a scheduled auto deposit to continually invest. You choose your strategy (aggressive, mildly aggressive, mildly conservative, or conservative), and the app takes care of the rest for you.

Whether you’re looking to save for retirement, bridge the gender pay gap, or just grow your wealth and financial security, investing is a great option. Do your research, trust your gut, and get started. When you see how much your savings can grow, you’ll wonder why you didn’t start sooner.

“Don’t be afraid,” advises Thompson. “Investing is less expensive and less intimidating than you think.”