Women and Investing: The Gender Wealth Gap Nobody Talks About

“Take a look at what you want to accomplish in life,” Norris recommends. That could mean buying a home, starting a family, taking a sabbatical from work, or retiring early. Those goals will help you determine the right investment strategy.

“The time horizon you have for your goals—how long you have until you achieve them—is one of the main things that should determine how you should invest,” explains Norris. “If you have a long time to save and invest for a goal, you can be more aggressive. If your goal is right around the corner, you should be more conservative.”

2. Commit to saving

According to Norris, retirement should always be part of your savings plan. “It’s tempting to de-prioritize that goal and pursue near-term goals like buying a home, but I’d discourage that,” she says. Industry best practices recommend saving 15% of your annual income for retirement and taking advantage of a 401(k) match if it’s available to you.

“If 15% is too much right now, save what you can and commit to increasing the percentage you contribute at regular intervals,” explains Norris, “like when you get a bonus or a raise.”

That doesn’t mean retirement should be the only element of your financial plan. “It’s important to know all of your goals,” says Norris. Once you’re able to fund your retirement, you should look into investment accounts that can help you work toward your other goals. Want to know if you are on track for retirement? Use our retirement calculator to find out!

3. Diversify your investments

2013 research shows that women are more risk averse than men, but that doesn’t have to hold you back from investing. A diversified portfolio spreads out your money across thousands of different investment types, rather than hinging your entire account balance on a couple of individual stocks, which could help smooth out some risk.

You’ll also want to consider the level of risk you’re comfortable taking on. Often, depending on your unique financial circumstances, a safe bet might be a more aggressive strategy than you think.

“We typically recommend you invest in the least aggressive portfolio that will help you meet your needs,” says Norris. “But ironically, that can mean an aggressive allocation, because if you’re too conservative, your returns may not keep pace with inflation.”

The key is to expect that the market will fluctuate and stay the course, no matter what. “You have to tell yourself—in good times, before you even see those dips—that they’re going to happen,” Norris explains.

4. Check in annually

Your investment strategy shouldn’t be something you set once and forget. Check in on a regular basis—Norris recommend just once per year to avoid worrying about market ups and downs—to make sure you have a solid understanding of what you own, what you owe, and the status of your accounts.

That yearly check-in gives you the opportunity to make adjustments to make sure you’re on track to reach your goals.

“If you want to buy a home in ten years, you might want to be very aggressive today, but nine years down the road, you’ll probably want to have the account in all cash,” Norris explains. Changing your allocations over time will help you ensure you have the money you need to meet your financial goals on your timeline.

5. Trust that you’re naturally equipped to be a smart investor

“When women commit to investing, they achieve greater results than their male counterparts,” Norris says.

Data backs that up: A recent investments study revealed that when women invest, they outperform men with investment by 40 basis points, or 0.4 percent. What’s more, men are more likely to trade their stock investments than women, which can be a risky approach. As Jean Young, senior research analyst at Vanguard explains in a 2015 Wall Street Journal article, by trading less often, women are less likely to trade at the wrong time.

“When you view yourself as a capable investor—not trying to outsmart the market, but leveraging the market to work toward your goals—you can achieve great results,” Norris adds.

Working toward equal, fair pay between the genders is critical—but just as important is the potential of growing those dollars through a smart investment strategy.

SoFi wants to help. Which is why, in support of this year’s Equal Pay Day, we’re offering a dollar match (up to $200) for those who open and fund SoFi Invest accounts², individual or joint taxable account, through this link.

Best of all, your Invest account comes with unlimited access to SoFi Wealth, LLC financial advisors, who can help you identify your goals, plan a smart strategy, and answer any questions you have along the way.

¹ SoFi does not collect information on applicants’ gender. Gender classifications are part of SoFi’s proprietary machine learning model that predicts demographic information. The objective is to better understand our customers’ financial journey, anticipate their potential needs, and better serve our customers. The data analyzed over 10,000 funded investment account in SoFi Invest, as of Feb. 2018.

Bonus amounts of $600 or greater in a single calendar year may be reported to the Internal Revenue Service (IRS) as miscellaneous income to the recipient on Form 1099-MISC in the year received by applicable law. Recipient is responsible for any applicable federal, state or local taxes associated with receiving the bonus offer, consult your tax advisor to determine applicable tax consequences. SoFi reserves the right to change or terminate the offer at any time or without notice. Please refer to Form ADV Part II for additional disclosure information regarding related parties.

SoFi Wealth, LLC does not render tax or legal advice. Individual circumstances are unique and we recommend that you consult with a qualified tax advisor for your specific needs.

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