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BIG UPDATE: The super-secret is out –– we’ve officially launched Treasury, the investing education platform for the Her First $100K community that combines non-judgmental discussion, jargon-free educational videos & articles, and tools to easily understand and manage your investments.

All you have to do is attend Investing 101, a live online workshop with Tori to teach you the basics of investing in a way that is fun, simple, and approachable. You’ll get the chance to invest during the workshop.

Afterward? You’ll gain access to Treasury, where you can make investments, ask questions, and participate in daily challenges.

Did you sign up? Great! Now, without further ado…

The #1 reason why women say they don’t invest is fear.

Fear of getting started.

Fear of getting it “wrong.”

So it’s likely you are experiencing, or have experienced fear around investing. That’s why this episode is so damn important.

We’ve said it before but it bears repeating: Financial Feminism is so much more than just advocating for equal pay or more female CEOs (though these are ALL good things). It’s creating a more equitable and just society for all –– which includes closing both the gender and racial investing gap.

And that gap closes when women have the confidence and financial literacy to begin building their financial futures.

In this episode, Tori goes over the basics of investing, including her rule of 2s, why compound interest is absolute magic, and more reasons why you cannot wait to start investing.

She also *might* be dropping some hints about the next big thing happening here at Her First $100K –– spoiler alert, it has to do investing…

After you listen to today’s episode, we’d love it if you would screenshot and share it to your Instagram story –– make sure to tag @herfirst100k!

This is also a fantastic episode to send to all of the women in your life. Remember, financial education is the backbone of financial freedom –– so help us get this information into the hands of other women who need it.

Not sure where to start with your finances? Take the free Money Personality Quiz to get tailored resources for your financial journey!

Special thanks to Trust and Will for sponsoring this episode! Get 10% off your estate plan for Financial Feminist listeners!

Timestamps:

0:35 – The statistics highlighting the gender wealth gap

2:35 – How do I get started investing? The rule of 2s

3:05 – The first rule of 2s

4:10 – The story of Rose, the woman who was in financial purgatory

7:50 – What do I invest in? The second rule of 2s

9:20 – Diversification!

10:18 – Should you DIY or use a roboadvisor?

12:00 – Dropping a hint about the next big thing for Her First $100K!

13:00 – The myths that keep women from investing

Resources:

Our HYSA Partner Recommendation (terms apply)

My Favorite Money Tools

Course: Back to Basics

The $100K Club Facebook Group

Blog: What is a Roth IRA?

Women ‘Know More Than They Think They Know’ About Finance — How Confidence Can Help Close the Gap

The gender investing gap by the numbers

Timestamps

Episode 9: A Beginner’s Guide to Investing

So we hear about the wage gap a lot. As a society, we talk about the wage gap constantly –– 78 cents to a man’s dollar, it’s even worse if you’re a woman of color, right? That’s the average amount.

And it’s something we should continue to talk about. It’s something that’s super important to discuss. But what we’re not talking about enough, is the investing gap. So, women either wait longer to invest compared to men, or don’t invest at all. So we take less money because of the wage gap. It grows at a slower rate, because we’re not investing. And then on average, women lives seven years longer than men do. So less money growing at a slower rate, and then we’re expected to live longer on that money. How the fuck does that make sense? It doesn’t.

So, what we need to do is start investing. The number one reason women don’t invest is fear, fear of getting started fear of doing it incorrectly. And what ends up happening is we lose 10s of 1000s, hundreds of 1000s, potentially millions of dollars by waiting to invest. Because when it comes to investing, time is more important than the amount of money because of compound interest.

What is compound interest? Simply put, it means that your interest earns interest. So let’s say $1,000 at 25% interest, right? If we’ve gained 25% interest on $1,000, we now have $1250. Now we’re earning 25%, interest on $1,250, etc, etc, right? Our interest is earning interest in addition to the original amount of money we put in. So that means if you’re only able to contribute a small amount, either per month or one time, but you allow it to grow for decades, that money will be exponentially larger when you need it, maybe for retirement, maybe for a big goal in the future, right?

So I talked about this all the time, but my $100k, my original $100k at 25. At 65, by the time I’m set to retire, that’s the typical retirement age that $100k will be over a million dollars, it will be multi-millions of dollars, even if I never contributed another penny.

Investing is our best tool of protest as women, it is our best tool for wealth building. We talked about this earlier this week with Sally. But you’re probably wondering, how exactly do I get started investing? How exactly do I get started? And how do I get rid of the intimidation? How do I get rid of the nervousness around investing, and actually get started?

So how I explained investing is with a strategy called the investing rule of twos. If you are driving, if you are on a bike, if you are somewhere where you can’t take notes, maybe log this in your head and come back. If you are seated. If you are stationary, this is a great time to grab a notebook.

Alright, first rule of two about investing. Investing is a two-step process. This is the number one mistake I see people make when they’re investing. They go and put money in an account, maybe that’s in an IRA or a 401k or in a regular brokerage account. And go “cool, I’m done. I put $1,000 in I’m done.” It is a two-step process. When it comes to opening a bank account, that is a one step process, you put $1,000 and you’re done.

Investing, you have to put the money in step one. And step two is to actually choose your investments, an IRA, a 401k, a brokerage account. These are not investments. These are accounts where you keep the money, then you have to go choose your investments.

It’s like putting money on a gift card. Right? It’s like okay, I went put $25 on a gift card. Yeah, gotta go spend the gift card. It is a two-step process. I have seen way too many people put money into an investment account and then think they’re done. And what that means for your money is it is just sitting in financial purgatory is just sitting there not working for you at all. And it’s not even working for you with like a savings account interest, because it’s just sitting there waiting to be invested.

And the most extreme example of this I’ve ever heard, and I’m going to try to get through this without crying I never have. I was speaking on a panel a couple of years ago. And I was with a financial advisor on this panel. And she was telling the story about Rose.

Rose was this cute little 65-year-old woman who was a teacher and had worked so so hard her entire life. 30/40 years as a teacher, and every month diligently –– she was saving in her retirement accounts. She was putting money in our 403B’s she wa
s putting money in her IRA and she was saving diligently for decades of her life. And then when she went to retire, she realized she had never actually invested the money. Her money had sat in financial purgatory for decades without her knowing it. So instead of taking the $350,000 that she contributed over these decades of her life, and turn it into multi-millions by investing, it was simply $350,000, which sounds like a lot of money, but $350,000 to sustain her for potentially 10, 20, 30 years was not going to be enough money. And it didn’t even earn interest in a savings account, because it just sat there waiting to be invested. It just sat there on the sidelines waiting to get into the game, and it never actually happened.

So all that to say, I tell Rose’s story –– a very tragic, very sad story –– in the hopes that we don’t ever have any more Roses. So please, please don’t let this be you. If you are already investing, our first piece of homework is to go make sure that you’ve actually put the money into an investment account and then bought things with that money. And if you’re getting started investing, please make sure you do both steps. You open the account, right you put the money in the account, and then you go choose your investments.

6:20

Some parts of being an adult are exciting to talk about like opening your investment accounts, buying your first home, or starting a family. But we often neglect to talk about the less sexy but just important parts of your adult checklist –– creating an estate plan. If you’ve ever heard that wills are only for people with loads of money or who are older, you’ve actually heard wrong. And if you have or hope to have anything you’d like to pass to future generations, you need a will. And if you have kids, you especially need a will to assign them legal guardianship. Something as important and specialized as an estate plan shouldn’t be created through a one size fits all template and hiring a traditional estate planning attorney can cost you $1000s. With the help of the experts, at Trust & Will, you can create a state-specific legally valid custom will or trust in as little as 15 minutes for a fraction of the cost.

Setting up your will online with trusted will is simple, convenient, and secure. Plans start at just $39 and you can nominate guardians for your children delegate who receives your belongings and plan for your future medical care from the comfort of your home.

To get started, visit www.trustandwill.com/financialfeminist and fill out their short quiz to help you find out which documents are right for you. They’re offering 10% off your estate plan just for Financial Feminist podcast listeners, and Trust & Will’s support team is available seven days a week to answer your questions and make sure you feel confident with your estate plan.

With Trust & Will you can leave a legacy with peace of mind, head over to www.trustandwill.com/financialfeminist to get started today.

7:45

So you’re thinking to yourself, what do I choose? That seems overwhelming. People talk about the stock market. It’s like Leo DiCaprio shouting into a phone and Wolf of Wall Street. What do I invest in?

There’s two basic things to invest in, only two, it’s not more complicated that. There’s literally two basic things to invest in. This is your second rule of two’s, the two things you can invest in are stocks and bonds.

At the very basic level, you can either invest in stocks, or in bonds, stocks, or tiny little slivers of companies. If you buy a share of Amazon stock granted, that’s like owning a grain of sand on big ass beach, right? But you own a tiny little share of a particular company, you are part owner in that company. This is could be Amazon, Bumble, Shopify, Tesla, any company on the stock market, right? A typical financial adviser will tell you that stocks are more lucrative, they’re also more risky. On the flip side, you have bonds, bonds tend to be less lucrative, but more stable and consistent over time. And bonds are the debt of a company or government. So you make money on the interest from loaning a company or government money. On the flip side, you’re like Sallie Mae, you are earning money by offering a loan to a company or government. So there are two basic things to invest in stocks and bonds.

And then you’re thinking to yourself, well, I’ve heard of mutual funds, what are mutual funds? Mutual funds, index funds, ETFs  (exchange-traded funds), these are groups of individual stocks.

One of the most important parts of investing is doing what we call diversification. That’s a fancy way of saying we don’t want all of our eggs in one basket. So when we are thinking about investing, if you’ve just invested in Amazon, the likelihood is very unlikely, but say Amazon went bankrupt tomorrow, you could be out a significant amount of money. So one of the ways to mitigate your risk by investing in stocks is to invest in these groups of stocks, these mutual funds index funds ETFs. So mutual funds, index funds, and ETFs. These are simply groups of stocks. And it makes sense right? Why invest necessarily in one company when you could invest in five 100 or the entire stock market, right, it helps mitigate some of that risk of investing in individual stocks.

The Final Rule of Two, you have two basic options of how to actually get started investing –– you can DIY it, or you can use a robo advisor. DIY in your investments means that you feel confident enough managing your investments yourself, you feel confident choosing index funds, you feel confident choosing what you’re going to buy with the money, you’ve put it into the account.

I feel confident enough doing that I managed my own investments, I feel good about that. If you’re listening and investing is really confusing or intimidating, this might not be the best option for you. But it will save you some money by doing your own investments. There are a bunch of DIY platforms. But here are some examples: Vanguard, Fidelity, Charles Schwab, TD Ameritrade, etc.

These are places where you are managing your own investments yourself, you’re putting money into the accounts, you are then choosing what to buy with that money, you feel confident enough to manage your own investments. Now if you don’t feel confident managing your investments, but you do want to get started investing, because you do you do want to get started in investing.

Your second option is a roboadvisor. We have Sallie Krawcheck on from Ellevest earlier this week –– Ellevest is an example. I also recommend unlike M1 Finance, there’s also other options Betterment, Wealthfront, Wealthsimple, Acorns, probably heard of others as well.  What roboadvisors are doing is they’re taking a small fee to do it all for you.

They’re gonna ask you questions like: What are your goals? When do you want to retire? What is your risk tolerance? Basically, like how aggressive do you want to be? How aggressive do you want to be in the stock market? And they are going to make decisions, buy funds, buy stocks, buy bonds based on those answers. So it’s a great way to get started investing.

If you feel still too intimidated, maybe, but you know, you need to get started. I also have a third option, which is something that’s coming this summer. And it’s something that I am in the midst of building, but I could not be more excited about.

I am partnering with some friends to build an investment community, a place where all of us in Her First $100K’s Financial Feminist community can come to not only talk about investing, to feel like investing less scary and less intimidating but also to actually get started investing step by step.

So if you listen to this podcast, and you’re like, cool, this was a lot of great info, but I still need to know what a mutual fund is. Or I still need to know exactly how to get started, we are guiding you through that entire process.

So if you’re interested, if you want to learn more, we are in the midst of building it, it should be launching in the summer, you can go to www.herfirst100k.com/waitlist. You can also go to the link in the show notes.

But that is your third option. If you want to hear from me if you want to be guided through how to get started investing, and hang out with some dope women who are doing the same, this is going to be for you.

So ultimately, when it comes to investing, even if you’re a little intimidated, even if you’re a little scared, I need you to get started.

There’s the thing called analysis paralysis, right? Where you think I need to know how to do absolutely everything. And I need to be a complete expert in order to get started. And that takes you months, years decades before you actually start. And no, you don’t need to be rich to start investing. That’s how you get rich. And two, you don’t need a lot of money, right? You just need to get started. Even if it’s with a couple $100 maybe $1,000 upfront, right and then can’t contribute again for a while.

It’s just important that you get started. I like to say learning how to invest is like climbing stairs, it’s honestly really easy. Just that first step is like five feet high. So if you’re listening to the show, if you’ve already started investing, but you haven’t continued to invest, or if you’re finally ready to get started, I encourage you to climb up that five-foot high stair and just fucking do the damn thing. I like to say learning how to invest is like climbing a staircase. It’s honestly not much more difficult than that. Not much more difficult than climbing stairs. Except that first step is like five feet high. So I’m here to guide you.

There are so many people out there to give you investing advice. I just need you to get started analysis paralysis is real, right? It’s so easy to think, Okay, I need to be an expert. I need to know exactly what I’m doing. I need to have all of the answers before I get started. And what ends up happening is you miss out on so much money by waiting weeks, months years to learn how to invest. So even if it’s just a small amount of money, even if it’s just one time for any can’t invest again for a while. I need you to just get started. This is how you grow your money, right? This is your best form of protest. This is your best form of wealth building. And I know it’s intimidating. I know it’s scary. I’m here to support you. And I need you to just climb that five-foot-high stair and just do the damn thing.

I’m cheering you on.

15:05

Thank you for listening to Financial Feminist, Financial Feminist is produced and hosted by me, Tori Dunlap. Theme song and audio production by Jonah Cohen Sound. Administration and marketing by Olivia Kolkana, Sophia Cohen, and Kristen Fields. Research by Arielle Johnson. Promotional graphics by Mary Stratton and photography by Sarah Wolfe. A huge thanks to the entire Her First $100K team and community for supporting the show. For more information about Financial Feminist, Her First $100K, our guests, and our sponsors go to www.financialfeministpodcast.com

Transcribed by https://otter.ai