General Investing

What Happened When These Women Started Investing

FEB 01 | 2021
A woman sitting at her desk surrounded by papers, a laptop and a calculator.

Fewer women than men invest their earnings¹, and that needs to change. The consequences of not investing are serious—like the gender retirement gap. Women over 65 live on income that’s about 17% less than men and have a longer life expectancy. Let’s see what happened when three women took a different path.

Greater financial freedom and independence are two of the top reasons why people invest. Three women told us about the surprising ways investing improved their lives, from windfalls to life lessons.

Women have 17% less than men in retirement but are expected to live longer.*

Alexis’ Story

Age: 35
Years Investing: 16
Lives in: Atlanta
Works in: Financial industry
Portfolio: 401(k), Roth IRA and a brokerage account. Investments include mutual funds, stocks and REITs (real estate investment trusts)

At 19, Alexis sat down with an advisor at the bank where she worked and opened a 401(k). But she didn’t really focus on her finances until a few years later, when she vowed to eliminate her credit card debt. While working to become debt free, Alexis read all she could about saving and investing. 

She became an enthusiast, sharing her investment convictions and encouraging friends to invest their earnings as well.

I get so excited about investing, and I try to explain the importance of it to friends.

Today, Alexis has no consumer debt, and her investing goal is to retire comfortably by age 55. That isn’t just a vision of an easier life. She dreams of continuing a family tradition of sharing experiences with future generations.

“I plan on having children, and I want to be able to pay for my children to go to college and be able to take my children and grandchildren on vacations with me—because that's what my grandmother did when she retired.”

For Alexis, it also feels good knowing that she won’t likely be a burden to the next generation in her later years. She’d like to leave money to her future kids.

But it’s not all about the distant future. Alexis is currently working on a near-term financial plan to buy her dream car, a Tesla.

“For this Tesla, I was thinking about opening a specific investment account, because I believe investing will put me further ahead than just putting it in a regular high yield savings account.”

Kim’s Story

Age: 52
Years Investing: 4 actively
Lives in: Chicago Metro
Works in: Public relations and social media
Portfolio: IRA and a small brokerage account. Investments include mutual funds, stocks and exchange-traded funds (ETFs).

Kim first started a 401(k) through her employer in her early 20s. Then she ignored it for decades while her husband took the lead on finances.

But in the past four years, Kim did a financial 180. Today, she actively selects each investment in her 401(k). She opened a brokerage account and keeps an eye on the market regularly.

Along the way, Kim has learned about herself and her risk tolerance, and has developed her own investing style.

One of the first stocks she purchased was from a software company.

“It went up, seemingly a lot. I asked my husband, should I keep it, or should I sell? He said, ‘It's your decision,’” Kim recalled.

Ultimately, she decided to sell, and was excited to have a profit. But the story took a twist.

“Then the stock went up even further. OK, now I’m mad!” she said, laughing about the incident, which helped her become a more patient investor.

It can be empowering and rewarding, psychologically as well as financially, because I did this thing that I was kind of scared of all these years.

Kim has witnessed the sobering cost of elder care for her parent’s generation. She sees her portfolio as her chance to have something left to pass on, after paying for end-of-life care.

For the present, she enjoys using a small percentage of her money to invest in companies she believes in. But the majority of her portfolio for the future is invested for the long-term with a risk level that’s right for her.

Xin’s Story

Age: 37
Years Investing: 20
Lives in: San Francisco Bay Area
Works in: Software engineering
Portfolio: 401(k), Roth IRA, individual accounts and other holdings. Investments include mutual funds, stocks, bonds, real estate, precious metals and others.

Xin started her Roth IRA at the tender age of 17. She socked in money she’d earned working at her mother’s business and selling used textbooks online. She doesn’t claim to be a financial prodigy for having such foresight.

“My parents told me to do it,” she said. Both of Xin’s parents happened to be accountants.

When she started working after college, Xin dutifully contributed to her 401(k). Although she made a good income, she didn’t rush into buying a home. That left her with cash on hand to invest in real estate during the housing market fall in 2009.

Over the next few years Xin was able to make a profit as the housing market recovered.  She now lives in one of the properties she purchased at the time. In the meantime, she’s continued building an increasingly diverse investment portfolio.

One investment that intrigued Xin was cryptocurrency (digital money). While it’s had its ups and downs, and where it goes from here is anyone’s guess, she’s holding on to some as a long-term investment. She is able to do that because her portfolio is diversified in other ways.

I want to invest in more women right now. I invested in a female CEO for the last angel investment I did, partly because I think she would make more money.

If Xin seems to take more risks than others, it’s because of the freedom she earned by starting to invest early. Another example: although she is her family’s breadwinner, she didn’t think twice about leaving her corporate job for a startup.

Now, Xin supports other startups through angel investing, funding very young companies. She enjoys that she can use the money she’s earned from investing to help out others.

Is Your Portfolio Working for You?

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Gallup, US Stock Ownership Down Among All but Older, Higher Income, May 24, 2017

Source: National Institute on Retirement Security, May 2020

This is an unpaid testimonial and may not be representative of the experience of other clients. 

Investment return and principal value of security investments will fluctuate. The value at the time of redemption may be more or less than the original cost. Past performance is no guarantee of future results.

Diversification does not assure a profit nor does it protect against loss of principal.

Generally, as interest rates rise, the value of the securities held in the fund will decline. The opposite is true when interest rates decline.

Past performance is no guarantee of future results. Investment returns will fluctuate and it is possible to lose money.

This material has been prepared for educational purposes only. It is not intended to provide, and should not be relied upon for, investment, accounting, legal or tax advice.