Personal Finance

Why are Women Afraid of Money? How to Get Started With Investing

I really wish that this post was written by me, but today’s post comes from Robert, who founded The College Investor.  If you read personal finance blogs, it’s easy to see that many of the women’s sites focus on saving money, while the men’s blogs have a focus on investing money. Sure, we have retirement funds, but I bet we trusted some dude in a suit to tell us how to manage it. Only 26% of women were confident making their own investment decisions, compared with 44% of men, according to a survey by MassMutual Financial Group. So why are women afraid of money? Knowledge is power, so I asked Robert to help ME out with how to get started with investing (since sadly, I honestly have no clue).

Are you currently investing for your future? If not, why haven’t you started? Many people believe that they don’t have the excess funds to put toward investments. Still others believe that they have plenty of time and can afford to wait until later in life. The truth is that most people just don’t get started because investing is not an exciting thing to do, and it can be a little intimidating to get started.

They always mean to set up an appointment with the broker or put some extra money into savings in order to get started, but life just has a way of getting in the way and prolonging our intentions. For those that are a bit frightened because you aren’t knowledgeable when it comes to finances, don’t worry, that’s what your financial advisor is for. They won’t poke fun of you for any of your financial decisions. They simply want to help you get to where you want to go financially.

For others, simply taking a class or talking with a good friend may be enough to help.  Regardless, here are some more tips on how to get started investing if you’re shy and don’t know where to start.

Build Your Savings

Some of you aren’t making the excuse that you simply don’t have enough money to get started. In fact, perhaps you have a lot of money in the savings account, but are beginning to wonder if that’s really the best place for it. First of all, an emergency fund is always a good thing to have, so you want to be sure that you don’t move all of your money out of your savings. Keep approximately six months’ worth of expenses in a place where you could remove it within 24 hours without hassle.

Never invest your emergency fund.  Remember, there is risk to investing – the stock market could go down next week.  In the long run (over many years), the stock market will rise, but you may not be able to wait that long to recover.  So, even when you start investing, keep your emergency fund.

With the remainder of your money, it is most likely time to start investing it. After all, it’s earning practically nothing sitting in your savings account. Chances are that it will do much better in an investment fund and earn far more money for you in the near and distant future.

Getting Started Investing

women investing

You really have two options if you’re ready to start investing. You can decide to invest the money yourself or you can hire a financial advisor. I’d say that 90% of the population should probably get the advice from a professional to get started.  I don’t mean shelling out big bucks, but simply getting help getting started.
For most, simply taking a class on investing with the right people can help you get started.  For others, you may want to sit down with a fee based financial planner to go over your entire financial life and see what works best for you.  Finally (the most expensive), is to get a broker to help you make all decisions for your portfolio.  Not only can they make trades for you, but they can set up a plan for your future retirement. If you want to retire by the time you’re 55, they can lay out a plan that will most likely get you there.

I think for most people, simply taking a class and investing in index funds would work very well.

Index Funds

Many people have heard of mutual funds, and this is what most women end up investing in. They are simply a fund of many different types of stock, typically in a certain category like retail or restaurants, that an individual can invest in and have a diversified approach with a low cost. Financial advisors tend to push these investment funds because they pay well for them (advisors get paid a percentage of your investment for advising that you invest in their fund). You won’t hear much about Index funds even though they cost much less in fees and are actually proven to earn more money than mutual funds.

There are many good index funds that are out there for individuals to get started with.  One of the most popular is S&P500 Spider, or SPY.  This index fund simply tracks the S&P500, which is a fund of the biggest 500 companies in the United States. Many people call this a good gauge of the economy since it includes so many large companies.

By investing in that index fund, you are basically investing in the US economy, and should get a return that matches the growth of the economy.  Plus, index funds don’t have many fees, so you don’t have to worry about your return getting eaten up.

What’s Stopping You?

So, now that you know the basics, what’s stopping you?  Go out, read a book, take a class, or meet with a financial advisor and get started investing today!


This is a guest post by Robert Farrington, founder of The College Investor.  He seeks to help young adults and college students get started investing through is online Investing 101 Course.


  1. Thanks for the advice! I think a lot about investing, but there are so many options after you make the basic index fund purchase. Once you have an index fund, and then have extra cash, it seems like there’s a whole new world for figuring out where to invest. E.g. Drips, Stocks, ETFs, Real estate. And with each option its tons of research. but before investing, people should really try to understand what their risk tolerance is, and goals for the money are. Also, having more calculators can help people visualize what their money *could* do in different types of scenarios.

    • Thanks for the input! The guy who wrote this post actually has a great online course he’s developing that explains things more in-depth – the link is below :)

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