Money Musings: 💭 What stopped me from investing
Next week when you’re reading Financial Adulting (it comes out in 7 days! 😆) and get to chapter 8, you'll learn that only half the people in the United States invest - and women tend to invest 40% less than men, on average.
These numbers are even lower for communities of color. In 2019 only 34% of Black people and 24% of Latinos owned stocks, compared with 61% of white people.
The problem is many fold but it comes down to that most people don't have money leftover to invest. It’s not something that’s reasonable or feasible for most.
Investing is a privilege. If you have that privilege, you want to use it and have your money grow for you - exponentially.
Here are the things that kept me from getting started with investing even when I had the money to do it…
1. INVESTING CULTURE. Things are getting better (more slowly than I would like) but the investing world is still very much dominated by older white men. Despite my finance degree and finance background, it still felt inaccessible to me.
I learned that my super simple, unsexy way of investing beat out even the people who sounded super confident about investing.
Spoiler alert - there is no correlation between sounding confident and knowing much about investing. AND I’ve noticed people tend to talk a lot about their wins and are pretty quiet about their losses.
2. FEAR. I was afraid of losing the money I worked hard to save. I saw people lose a lot of money in the Great Recession and I didn’t want that to happen to me.
Yes, there’s risk, but if you invest for the long-term you have time to wait out the decreases in the market. You aren’t at the mercy of the market.
Over the last 20, 30, 50 years, the market has returned over 8%. And that’s including the dips we saw in 2007 and more recently with the pandemic. That’s why you hear me say (over and over) to invest for the long-term.
3. WANTING TO WAIT TO "KNOW" EVERYTHING. This one is a biggie. We want to understand what we are investing in but there is SO much information out there. There are even entire TV channels dedicated to talking about investing 24/7.
Another spoiler alert - I don’t watch them.
If I waited until I knew everything, I never would have started investing. We learn so much by doing.
If you are ready to invest, read chapters 7 and 8 of my book, and then get started!
MONEY MOVE OF THE WEEK
REWIRE FOR WEALTH.
I interviewed Barbara Huson, a financial therapist, wealth coach, and author whose most recent book, Rewiring For Wealth, talks about how to program your brain for financial success. She shared that “our beliefs about money are inherited from our family of origin, from the culture we grew up in, and from the school that we went to.”
So how do we change a belief? Here are Barbara’s three steps to training your mind for wealth and well-being.
RECOGNIZE. Recognize the unhealthy negative thought that is not serving you. Try to recognize it without judgment or criticism.
REFRAME. How can you see things differently? This is the new belief or affirmation you want to replace the negative thought with.
RESPOND DIFFERENTLY. If that affirmation were true (and Barbara says it’s okay if you don’t believe it at first!), how would you respond? What would you do?
Choose a money belief you’d like to rewire and go through Barbara’s process. If you have questions or aren’t even sure what money beliefs you have, check out this article for all the details!
YOU GOTTA SEE THIS
THE END OF FORCED ARBITRATION.
When I interviewed Linda Scott, author of The Double X Economy (I highly recommend it!), for my book, she said one of the easiest ways to make progress towards equality for women is to end the use of forced arbitration contracts.
These are contracts that many people have to sign when they start a job, affecting around 60 million working Americans, including men, but they have a disproportionate impact on women. Of course.
Linda shares that these contracts “basically take away American employment rights across the board.” They “force employees to surrender their job rights as a condition of employment by agreeing to pursue any grievance through arbitration arranged by the employer. The employee usually also signs away the right to join a class action suit.”
Linda believes eliminating forced arbitration contracts should be of the utmost priority, mostly because “congress has the power to do it and there's been bipartisan support.”
And guess what?! It happened! Congress approved a bill to end forced arbitration in sexual assault and harassment cases this month. You can learn more here. It's a win to celebrate!