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It’s a very tired cliché that women are bad with money. TikTok abounds with videos where women do ‘girl math’ to buy clothes they can’t afford; shows like Sex and the City have sold us the idea that debt is fine, as long as the fashion is on point. "I spent $40,000 on shoes and have no place to live! I will literally be the old woman who lived in her shoes,” Carrie says in series six. That said, there is some truth in it. As a student, I nodded sagely; Carrie’s words made sense. After all, shoes trumped boring things like houses. Or so I thought at the time. These days, in the middle of a cost-of-living crisis, the joke is starting to wear thin. I’ve not spent my life being frivolous with money, but I have spent it being poor at money management — rather than doing anything sensible with it, like, say, investing it, I usually put my savings into one account and leave it there. Over the years, that’s meant I’ve ended up with a sizeable chunk of cash sitting in my old NatWest Student Account (which was finally upgraded to an adult one a few years ago), accumulating absolutely no interest and doing nothing, much to the dismay of my partner. With my 30th birthday on the horizon, I thought, it was time to finally grow up and fix that. The only problem: the world of investing is a terrifying one. A quick Google would pull up endless information about Cash ISAs, stocks and shares, GISAs, bonds… but wouldn’t provide an awful lot of guidance on which options to go for, or which worked best for my savings plan. Faced with seemingly endless options, all of them written in dense financial jargon, decision paralysis set in and I found it was easier to just do nothing. I’m not alone. The gender investment gap is a real thing. According to research by Hargreaves Landsdown, it actually comes to a whopping £599bn in the UK. That means women are missing out, big-time: usually, we retire with £136,000 less than men. And yet, when we do invest, we’re good at it. The women that do invest outperformed men by 0.81 per cent in 2020. The internet is also an increasingly friendly place to women looking to grow their cash: apps like the female-driven Propelle offer potential investors a step-by-step guide to getting started. Surely a week was long enough to teach myself the basics? In an effort to set myself a hard deadline, I vowed I would be investing my own savings before the week was out. Here’s how it went. I sit down for a chat with Ayesha Ofori, the founder of Propelle. Ofori is a former Goldman Sachs wealth advisor who quit her job “making rich people richer”, as she tells me, to found an app that put some of the power back in the hands of women. “We had so few female clients,” she explains of her time at Goldman. “I thought it was a Goldman problem, but when I did some digging, I realised it was an industry wide problem. Long story short, I went down a rabbit hole and realized women do have money — we're getting more money at an accelerating rate — that we tend to keep as cash. Or, we just hold on to it and don’t put it to work.” This, she says, is bad not just for the economy, but for the women: “so many get to retirement age and don't have enough to see them through to the ends of their lives. For some of them, this could be avoided if you just started investing earlier.” After my chat, I feel inspired. I download Propelle and spend some time flicking through the app. It offers webinars, bite-size lessons on what things like ISAs and stocks and shares are, as well as a section dedicated to actually investing. A promising start. Time to get going. The nice thing about Propelle is that it breaks down the investment journey for you via handy bite-sized lessons. One of the first steps I need to take, it tells me, is setting a financial goal for my savings. According to Fidelity, 71 per cent of women who invest feel more confident when they have a clear financial plan. Do I want to use it to buy a house, for instance, or go travelling, or get married? Well, a car’s not happening in London. To be fair, the house isn’t happening any time soon either — but it seems like a good place to aim for. Seeing as the house is a long way off, that means investing in an option with a long-term return on investment (ROI) — basically, I don’t touch my money for several years. That means, my partner tells me earnestly, investing in an option that is high-risk: something that might see the value of my money go down in the short term, but up in the long term. I nod sagely, but I am confused. I stress about my finances. Why haven’t I invested them earlier? Come to think of it, why is this a common problem for women? “One of the biggest [barriers to investing] is lack of confidence,” Ofori explains during our chat. “A lot of women feel that they don't know what they're doing. It doesn't even matter if women work in financial services: we even come across women who work in investments but still don't invest their own money. “The lack of confidence doesn't only come from lack of education. There is also this thing that women seem to have where they just want somebody to kind of give them the thumbs up or give them that extra reassurance before they press the button.” I certainly had no education in investing as a child; something that’s probably impacted my lack of desire to learn about it as an adult. Out of curiosity, I ask some female friends about how they invest. Often, it seems, the key to success is starting from childhood. “My parents opened an ISA for me when I was a child and invested birthday gifts in it for me,” one tells me. “My mum only properly handed the reins to be when I was about 21. I would say I have actively invested in it for about 5-6 years and I only do funds, not individual stocks.” Another says she only started investing because a flatmate worked in banking and was shocked she didn’t; another says she set aside £200 to invest, total; not much, but “it’s scary, because who has money to be wasting really!?” I agree. “Have you invested any money yet?” My partner asks me. I tell him no. He looks slightly exasperated. It’s happening, though. I’ve promised. In an attempt to get going, I ponder: do I want to invest, or save? Apparently, there’s a difference. Saving means sticking said money in a bank account and hoarding it like a dragon. Because I’m inept, my money has been sitting in a bank account with no interest rate, which means (due to inflation) that I’ve been losing money in real time as it gradually loses value. A Cash ISA seems like a good way to remedy that. They’re easy to use — “you can set one up with only a pound,” Ofori tells me — and would let me invest £20,000 worth of savings a year, tax-free. They also offer fairly good interest rates, or as good as they get in the UK, of around 4.5 per cent per month. Investing is putting your money ‘to work’ on the stock market, by investing in stocks and shares. Most people do this via a fund, which is run by a bank and spreads out your investment across a big portfolio of different companies’ stocks, rather than individual stocks (aka, putting all your money in Microsoft and hoping the company does well). This does mean that any money I invest is ‘at risk’ — if the market does badly, and the value of the stocks goes down, I lose money too. But on average, if the market does well, I’ll be in line to get more return on my investment than I would if I stuck it in a cash ISA. There are also different risk levels: a low risk fund will invest a share of my money in the extremely safe, predictable world of government bonds, which offer hardly any financial benefits but are also extremely unlikely to lose value, either. At this point my head begins to hurt. Today is the day, I decide. I head to Martin Lewis’ site, MoneySavingExpert.com, to try and find a good Cash ISA where I can invest a chunk of my savings. He’s very informative – the site breaks things down by best value, best recognised names and flexibility – aka, whether you can withdraw money from the ISA without being penalised or not. In line with my cash saving goals, there is some information about something called a Lifetime ISA, or LISA, which offers a 25 per cent bonus on savings if the money is used to buy a house. However, they can only be used when buying properties worth up to £450,000 — a no-go in London. Eventually, I settle on Trading 212, which offers a loss-leading (aka, absurdly good value) 4.5 per cent ISA. Bingo? Setting it up is actually pretty easy — an identity check, a couple of details confirmed — and then I’m live. I deposit some money. It’s literally that easy; slightly embarrassingly so, in fact. I’m on a roll. In a mad money-spending frenzy, I head to Propelle and decide to invest some money in actual stocks and shares. Seeing as the Cash ISA is a very safe bet (I get guaranteed 4.5 per cent interest every month with no risk to my cash), I decide to plump for something a little riskier, with a potentially higher ROI. That means investing in a stocks and shares fund. Historically, for me, the issue with investing has been the sheer choice of funds to pick from. How do I know that, say, a Vanguard account is better than a Blackrock one? What does any of it mean? Propelle has made things easier for me: the team has picked out seven dedicated funds to invest in for beginners, which include things like sharia-compliance (Ofori tells me this one is hugely popular) and ESG funds (in other words, ones which invest in ethical practices rather than, say, weapons). “With a lot of these global diversified funds, if you have a good fund manager… they're all pretty much the same,” she says. “In terms of fees, they won't be too dissimilar. And in terms of what actually goes in and then the ultimate performance, again, there's not a massive difference.” That makes sense. I opt for the Vanguard fund which promises 100 per cent equity — aka, 100 per cent of the money I put in is invested in the stock market, rather than in the safer realm of government bonds. That means higher returns, potentially (this one promises an average 11.17 per cent return on my investment, per year) but also more risk. This is the good long-term option — I will, on average, get a higher return on this investment, but it might take a few years for the financial benefits to really become apparent. There are risks, too. After all, if the stock market crashes, then my investments go down in value. With that in mind, I start small, with a few hundred pounds, and cross my fingers. It’s frighteningly easy. And just like that, I am an investor! Flushed with success, I spent a large chunk of my day checking in and out of my account in an attempt to see if my money has grown yet. It hasn’t — surprise, surprise. As Ofori reminds me, investing is a long-term game; the biggest returns are often seen after the six year mark, as interest rates start to pay off. It’s a little deflating: to have taken the plunge and have nothing to show for it. But perhaps that’s the point — when I got around to doing it, investing was actually, surprisingly, easy. The mental block was the biggest barrier: the idea that I wasn’t intelligent enough to know where to put my cash. “Investing is long term,” Ofori says. “When you start, you'll probably have the same as you had yesterday. But when you've actually invested and you've made that commitment, something changes and you don't have to invest a lot for that change to happen.” She recommends getting comfortable with the idea of investing first, then begin to think about adding more, or investing on a recurring basis. “It is not as hard as they make it seem, but you will only figure that out for yourself once you start.” The only magic ingredient is time: “Einstein called compound investing the eighth wonder of the world. You just have to stick at it for a decent period of time… and you'll be amazed at how it grows over time.”
