Why young women are investing earlier to secure their financial future

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When Qadreya Al Awadhi first bought shares in the United Arab Emirates, she was just 16 years old. The Emirati made his first foray into investing with the backing of his father.

In the decade since, his portfolio has grown to include US and global stocks and has grown between 100% and 150%, depending on the stock — except for one outlier.

“I was young enough to take risks and I was lucky to have more experienced adults guiding me and telling me what to do,” says Ms Al Awadhi, explaining how she got such big returns.

Ms. Al Awadhi used the money saved from her allowance and Eid and birthday gifts for her first investment.

“I studied trading in school and understood the kind of return I would get from a savings account. So, I was looking for alternatives. Obviously I didn’t have enough to invest in it. real estate, but I had enough for the stock market,” says Ms Al Awadhi.

She chose stocks because of a weekly tradition of watching movies with her father that began in high school. When she was in her last year of school, she said, they watched her favorite movie, Wall Street.

“This film was one of the main reasons that motivated me to invest and start early,” recalls Ms. Al Awadhi.

Not only were local stocks affordable, but she also knew several adults who were investing in them at the time and she could learn from them, she says.

Although her first investment was a long-term success, she had her share of ups and downs, especially in the international markets.

Initially, Ms. Al Awadhi based her decisions on classic investment ratios such as earnings per share and price to earnings. Now, as a financial services professional and owner of baby food brand Bumblebee, she’s learned to look deeper, reading and analyzing a target company’s finances, industry, peers, and… whole market.

“Since then, I’ve seen very little loss on my portfolio; at worst, I just manage to break even,” she says.

Overall, his guiding principle is to invest in companies that are more likely to exist 20 years from now.

Ms. Al Awadhi represents a new class of women in the UAE and elsewhere who are investing earlier than ever.

On average, women aged 18 to 35 now say they started using a brokerage account at age 21, compared to age 30 for older women, according to a February survey by financial services firm Fidelity Investments.

The findings are drawn from its 2022 Money Moves study, which surveyed 2,015 adults in the United States who have an investment account other than a checking or savings account.

“We’re in the midst of a major shift where more and more women are talking about money and investing – it’s becoming less and less taboo, especially among this younger generation,” says Lorna Kapusta, Chief Information Officer. women investors and client engagement at Fidelity Investments.

“More and more influential women are sharing their financial experiences and advice on social networks; more circles of women talking about money and goals with their friends.

About 35% of women in the younger age group say they started their investing journey with a small amount of money, often as little as $1, to build their confidence and feel comfortable.

Rather than building wealth, more young women (43%) invest to achieve a personal goal, compared to 34% of women over 36. These goals include paying for important family events, using the money to make a difference, or leaving. a heritage.

Meanwhile, Rachael Abraham’s ambition is to retire in 15 years at the latest, when she is in her 40s. “I invest with a view to achieving financial freedom,” she says.

Ms Abraham, 28, is co-founder and managing director of 1&O, an India-based creative IT services agency with clients in the United Arab Emirates.

She started investing aged 21 to secure her retirement income after her older brother explained concepts like the time value of money and compound interest using a retirement calculator on line.

Rachael Abraham, co-founder and chief executive of creative IT services agency 1&O, started investing at age 21 to secure her retirement income.  Photo: Rachel Abraham

“I’ve seen the amount of money you need to save to retire comfortably. This amount scared me and it only increases with age, which proves the importance of starting early,” says the entrepreneur and former Dubai resident.

“Using the retirement calculator has opened my eyes. My brother forced me to start saving money, but once I did, I wanted to keep investing. It’s amazing to see your money grow.

Today, Ms. Abraham invests primarily in the stock market, both directly and through mutual funds, with about 25% of her investments in term deposits, including automated bank deposits.

She bases her decisions on discussions with her family, advice from investment professionals, educational materials and online videos, and her own due diligence.

Growing awareness of financial issues and widespread access to digital platforms on the internet have helped women learn about finance and make their own investment decisions, experts say.

“We are seeing more and more young women starting to think about financial planning and investing. Much of this is attributable to the increased emphasis on financial education at a younger age, as well as the specific targeting of women,” says Jessica Robinson, founder and chief executive of the investment firm focused on Moxie Future women.

“There are now many investment clubs and financial education platforms that women can access, made much easier with the shift to online delivery.”

Jessica Robinson, founder and chief executive of female-focused investment firm Moxie Future, says more and more young women are starting to think about financial planning and investing.  Photo: Jessica Robinson

“FinTech also plays a part – with the rise of investment apps, it is becoming much easier for young women to start investing. Technology is definitely democratizing the investment landscape,” she says .

Do-it-yourself trading platform eToro recently discovered that 47% of 9,500 female investors surveyed in a February survey only started their investing journey two years ago – after the start of the pandemic. The same platform reported a 366% increase in the number of new female investors using its services in 2020.

And last month, roboadvisory platform StashAway said in a report that female users now make up 40% of its new customer base in the Middle East, up from 16% when it launched in November 2020.

In Singapore, the platform took five years to achieve gender parity, growing from 17% female investors when it launched in 2017.

The platform runs StashAway Academy, offering personal finance and investing courses across its network in the Middle East and Southeast Asia. Since its launch, more than 16,000 women worldwide have joined StashAway Academy and another 1,500 have taken its masterclass She invests.

United Arab Emirates-based Crunchmoms, the first and only private network in the Middle East that supports women at all stages of their careers and motherhood, organizes a range of events and community activities focused on the financial education and angel investment information.

Crunchmoms member Rebecca Moreira, 32, is head of investor relations at Glenwood Equity, a commercial real estate investment firm focused on multi-family apartment complexes in the United States.

The British-American made her first investment five years ago at the age of 27 because she had reached a financial milestone.

Rebecca Moreira, a Crunchmoms member and head of investor relations at Glenwood Equity, made her first investment five years ago at the age of 27 because she had reached a financial milestone.  Photo: Rebecca Moreira

“At the time, I knew I had to deploy it or I’d probably spend it if it was liquid,” she says.

With her then-boyfriend (now her husband), she began investing in real estate and has since expanded her portfolio through a series of strategic moves, such as using US tax incentives to increase her income.

“I was lucky enough to start investing in 2017 as the bull run continued. Of course, I could never have predicted this success and so far things are in the green. My only regret is not to have bought more,” she says, although she admits to having learned a lot over the past five years.

“A good investment in a strong squad is vitally important and on this journey we have made mistakes by not acting on red flags sooner.”

Ms Moreira says young women looking to take that first step on the investment ladder should keep three things in mind: “education, a mentor and finding your tribe.”

A financial podcast might be a good starting point. A mentor can be a family member or someone in the community whose insight you admire.

Finally, look to meet groups of other investors who have experience in what you want to do or online communities such as SimplyFI or Bogleheads Facebook groups.

“I believe all three components have contributed to my success in real estate,” says Ms. Moreira. “I know women have the ability to be successful investors [but] they simply have to start by educating themselves.

Updated: July 06, 2022, 5:00 a.m.

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