If you're looking for more confidence in your investing abilities, you're not alone. A February 2018 study by the Financial Planning Standards Council of Canada noted that nearly four in 10 Canadian women, regardless of education level, age, or marital status felt they knew ‘very little’ about finances and investing. Fifty-six percent of the respondents to the study also stated that they don’t have a written financial plan.
What Can You Do To Change That?
1. Start small – don’t think you need to tackle your entire investment and financial situation in a single day. That’s a daunting perspective, and one that will set you up for frustration
2. Work with a financial professional – you don’t need to do the work alone, and having a written plan helps you better understand where your money is going, how much you’ll need to fund your goals, and what you need to do to keep your money growing
What Else Can I Do Now?
While it’s important to find a financial professional you’re comfortable working with, a simple way to get a confidence boost may be thinking about the answers to the following questions on your own, even before that first meeting:
1. Define your personal goals. What are you passionate about achieving? Think about your goals in the short, medium, and long-term. Depending on what you’re looking to do – be it go back to school, get married, save enough to send your children to university, or travel the world when you retire (or even mid-career) – your financial plan will look very different from someone else’s plan
2. Think about how soon you’ll need your money – an investment strategy, and how much you’ll need to save will be very different you if you’re looking to travel the world in the next few years, or if you’re going to be a homebody in your retirement 30 years from now
3. How comfortable are you with risk? Are you okay with putting your money into riskier investments, or are you more cautious? While taking larger risks may result in higher returns, more cautious investors won’t be as comfortable with the potential ups and downs in their portfolios that those riskier investments often introduce
4. What does your day-to-day financial picture look like? Are you spending within your means, or are there areas where you can cut back? Preparing a simple budget, and monitoring your cash flow over a three month period will help you know where your money is going now, and help you identify what changes need to be made in order to save more towards your goals.
5. Additionally, you might want to think about opening a self-directed online investing account – a daunting thought for the four in 10 women who believe they know very little about investing. But think of it this way – by making your own stock picks, learning the lingo, and tracking the performance of what you picked – you’ll learn as you go. And that’s a powerful confidence booster for even the most experienced investor.