10 Steps to Become a Confident Investor: Lena Perepelova
Today in Europe women receive pension on average 30% lower than that of men, in countries such as the Netherlands, Germany or Austria the gap is higher than 40% .  Women’s overall wealth is inferior to men’s as it is affected by a number of factors: women’s salary is lower on average, women tend to take career breaks or pass on promotions due to family commitments, and women on average invest less than men.
The “investment gap” is real and it affects our wealth long-term, but each one of us can pick-up the investment game today.
The main reason preventing women from investing is lack of confidence. It is not our lack of financial knowledge, but our feeling of not knowing enough. It is this lack of confidence which also leads us to choose more conservative investing strategies with lower returns.
Growing our financial confidence is essential to our wealth long-term.
Every woman can grow her financial confidence by exercising discipline, building knowledge and following a strategy.
As a founder of “Women Investors Club” I have been helping women to find confidence and start investing. Here are my 10 steps to become a confident investor.
1. Make wealth management your weekly habit by blocking time in your agenda
This one simple step can potentially earn you more money than years of employment. Watch this video with more details.
2. Create your wealth strategy document
Create a document and call it “My Wealth”. Analyse your current earnings, spending and savings, make the conclusions and establish long-term goals. As you will be learning more and taking further actions, continue working on this document. Keep notes of the learning resources you are reading, make a list of ideas and action points and revisit it regularly. Some more ideas on financial planning and strategy here.
3. Keep your finances under control by using a method which works for you
Having control of your finances starts with understanding the facts. Take time to look through your finances and create a system to monitor them on a regular basis. What are your annual savings? Which percentage of your income do they represent? What changes can you implement to increase the savings? There is no single format and no perfect way to keep your finances under control: use excel or calculator, powerpoint or pen and paper, make tables and charts or use drawings and vision boards. These are your finances, and you decide on the system to manage them, as long as it makes sense to you and gives you a sense of control.
4. Focus on the long-term and ignore the noise
Long-term investing is very different from trading and speculating. It does not require high risks, does not keep you awake at night and, most importantly, it does not require constant monitoring. Unfortunately, the majority of investing news and learning resources are focused on short-term investing. It confuses beginners, gives us a constant feeling of missing out (the famous “fear of missing out”, or FOMO) and sends attention to researching “the winning stocks”. When in doubt, ask yourself “Will this really make a difference to my wealth in 10 years?”
5. Start talking about finances
Talking about finances and investing with other people is a major game-changer. 61% of women would rather talk about death than money . Talking about investing will maintain this topic on the top of your priorities. Your confidence levels will grow as you will start having finance and money conversations. Finally, you will learn from the tips and mistakes of others and you are likely to find similar-minded people.
6. Find an accountability partner, community, or a mentor
You probably know what works best for you and if you are good at learning by yourself or need support from others. Some women prefer learning with their best friends. My accountability partner is my husband, but it is important for me to have women I could talk to about investing, this is how I came up with the idea of “Women Investors Club”. You can join the club on Facebook or LinkedIn to connect with other women wishing to invest or who have already started.
7. Work on improving your knowledge
Financial knowledge is key to your confidence and today there are plenty of learning resources to quickly bring you up to date. “Investopedia” is a perfect place to start your research. This is a list of 5 books for beginners recommended by women in my facebook community “Investing is for Women”.
8. Don't waste time, calculate the cost of non-investing
Any money which is not invested loses its value due to inflation. On average, we lose 2% per year on any amount which we keep in a bank . 1000 Eur, which is not invested, will only be worth 640Eur in 20 years from now . Do you have savings in your bank? It is time to put a number on how much money you lost by not investing in the past five years.
9. Feel responsible for your financial health
We tend to see banks as hospitals responsible for our financial health. In fact, banks are businesses and their first objective is their profits. Unless you think you can afford to pay a salary to someone managing your money, your financial health is your responsibility and there is no point in looking for someone to manage your money.
10 . Cut on the fees and understand passive investing
Now, let's get practical. Investigate management fees for any money which you already invested through mutual funds with your bank or pension products. Make sure to minimise these fees and switch to more affordable alternatives. Keep in mind that a 1% annual fee destroys 25% of your savings over time !
Finally, understand passive investing and build yourself a simple portfolio of index funds.
Not investing is the biggest financial regret for 41% of women, but you don't have to be part of this statistics. On the contrary...you can make investing one of your biggest personal wins!
To take actions towards building your wealth today, find below a list of recommended learning resources. If you think you need more structural help, motivation, guidance and practical advice, you can join my “Investment Accelerator” program or work with me as your personal investment mentor.
Recommended learning resources:
- Books recommended by the members of “Investing is for Women” community on Facebook in no particular order:
- I Will Teach You to Be Rich by Ramit Sethi
- Intelligent Investor by Benjamin Graham
- The Simple Path to Wealth by J.L.Collins
- The Wealth Game by Peter Alcaraz
- Rich Dad, Poor Dad by Robert Kiyosaki
- Rich Woman by Kim Kiyosaki
- Master the Game by Tony Robbins
- One Up On Wall Street by Peter Lynch
- Crisis Investing by Doug Casey
- Little Book of Common Sense Investing by John C.Boggle
2. Videos by Lena Perepelova:
Article References
- https://ec.europa.eu/eurostat/web/products-eurostat-news/-/ddn-20200207-1
- “Taking Action. How women can best protect and grow their wealth” UBS Wealth Management, Oct.2017
- “Women and Financial Wellness”, Meryll Lynch, 2019
- “Women and Financial Wellness”, Meryll Lynch, 2019
- Bank deposits tend to offer interest rates much lower than inflation, but today saving deposits offer rates close to 0% all over Europe.
- Calculation made by Lena Perepelova based on real inflation numbers for Spain and the Netherlands for 20 years 1997 to 2017.
- Calculation made by Lena Perepelova: 4% ROI vs 5% ROI over 30 years
Bio of the Author:
Lena Perepelova is a founder of Women Investors Club and FunFinance Virtual Business School for Kids. She offers education and mentorship to women who want to build their wealth long-term. You can sign-up to Lena’s signature program Investment Accelerator starting in September 2021.
Lena is also a member of PWN Madrid, where she volunteers as a mentor.
Author: Lena Perepelova
Date: July 2021 |
