It is impossible to think about money, (especially YOUR money), without bringing your emotions along. We all have a huge and complex tapestry of emotions connected to our concept of money.
For many women, money represents security, and they fear putting any of it at risk. The thought of becoming a “beggar lady on the streets” is enough to spur any woman to put all of her retirement savings into a savings account or a bullet-proof treasury bond.
Sir John Templeton, of Franklin Templeton Investments, wrote a short and elegant manifesto called The 16 Rules for Investment Success. It takes less than an hour to read and is well worth the time. Templeton’s final rule is this: “Do Not Be Fearful Or Negative Too Often.”
This is great advice for any investor, but especially for women who tend to be more risk-averse than their male counterparts. Women are more likely to see potential the loses of investing rather than potential gains, but if they invest too cautiously, they could be losing out more than they know.
The safest investments, like treasury bonds, have extremely low interest yields. In recent years, we have seen yields lower than the rate of inflation, which means that the money in these accounts is actually losing value over time.
Invest In Quality
Despite the recent rollercoaster of the Great Recession, the stock market still historically returns gains over the long term. If you do your homework and invest in solidly performing companies with quality products, services, and leadership, you will likely be rewarded in the long term.
Women can also help overcome fear of investing by working with an experienced investment advisor who can guide them into low-maintenance mutual funds which are carefully monitored by well-trained fund managers.
Another way to help keep your money fears at bay is to diversify. If you need to have easy access to your money for your own comfort, then keep a small percentage in cash. You can also invest outside of the stock market, such as in real estate or commodities to protect against a crash. Just make sure you do your homework in these areas or work with an experienced investment advisor.
Don’t give into fear when it comes to saving money. Investing is an optimistic endeavor, and if you use best practices, you can grow your nest egg, which will give you much less to worry about in the future.