Girls That Invest | Simran Kaur​

Summary of: Girls That Invest: Your Guide to Financial Independence through Shares and Stocks
By: Simran Kaur​

Introduction

Embark on a journey to financial independence and shatter stereotypes as we delve into ‘Girls That Invest: Your Guide to Financial Independence through Shares and Stocks’ by Simran Kaur. This summary will shed light on the importance of overcoming limiting beliefs about women and money, and how financial freedom can empower and protect. You’ll gain insight on the reasons to invest, core personal finance foundations, and different investment types. Additionally, learn about ethical investing and the FIRE (Financial Independence, Retire Early) movement as pathways to financial freedom.

Breaking Down Barriers: Women and Investing

Society perpetuates limiting beliefs surrounding women and investing, but it is vital to overcome these beliefs and take control of our finances for long-term financial health. Structural and institutional barriers, along with negative media depictions of women and money, lead many women to falsely assume they’re bad at investing. The media tends to feature white women when portraying investment powerhouses, leaving minority women without representation. However, gender should not deter females from investing, and everyone should aim to overcome these limiting beliefs. Financial freedom is crucial, and every woman needs a reserve of money to rely on in emergencies or during major life changes. Women often sacrifice their financial independence by focusing on household tasks instead of building their careers, making them more vulnerable during divorce or bad relationships. Nevertheless, taking control of our finances and investing can protect us and ensure we live our lives on our own terms.

Why You Should Consider Investing

Are you losing money to inflation? Are you saving but not seeing significant growth? Investing can be an excellent solution. First, inflation can cause a 2% loss each year, but investing in stocks yields an average annual rate of 7-10%, showing positive returns. Second, investing permits the power compounding interest offers, allowing you to double your savings’ value every ten years. Third, investing can help you reach your financial goals faster, creating better financial security overall. Fourth, your mental and physical well-being can benefit from securing financial independence that relieves anxiety and contributes to a sense of control and peace of mind. Finally, investing also enables you to contribute to social, environmental, and governmental causes aligned with your values. With these five key reasons to invest, it’s time to consider furthering your financial goals.

Debunking the Myth of Investment Risks

Investing in the stock market is often considered daunting due to the perceived high risks. However, historical data shows that the market has always bounced back, making it a worthwhile investment for those with a long-term outlook. Investors can choose their risk profile and research companies before investing. The notion that investing is too complicated or requires large amounts of money is a myth. Fractional shares allow even those with a low investment amount to participate in the market. Investing is simple – the market acts as a facilitator, allowing buying and selling of shares. Don’t let common myths hold you back from investing and achieving long-term financial rewards.

Foundations of Personal Finance

Gain a clear understanding of your cash flow, tackle debts, build an emergency fund, automate your money and sort out your retirement account as part of your basic foundations in personal finance.

If you plan on investing, it is crucial to have a clear understanding of the basic foundations of personal finance. The first step is to track your “cash flow” or the money you spend and earn. By doing this, you can identify areas where you need to improve. Tackling any high-interest debts you may have comes next. Consider consolidating or refinancing your debt to manage a more manageable interest rate.

The next approach is to build an emergency fund that can cover expenses for at least three months in a savings account. Also, decide on the minimum amount you want to contribute to your retirement account and sort out a basic balance fund suitable for you. Most importantly, it’s essential to do your research and decide what’s best for you.

Finally, automate your payments to make your life easier. You can set up regular payment to an account you’ll use as your investing account and wire those funds to your broker either every two weeks or every month. By following these foundations of personal finance, you will be well on your way to making wise investment decisions.

Investment types for beginners

Learn the different types of investments and their suitability for your needs as a beginner.

Are you interested in investing but unsure where to start? Before investing your hard-earned money, it’s essential to understand the various types of investment options available to you. Fortunately, you don’t need to be a finance wizard to become an “investor in training.” In this summary, we’ll explore the different investment types and their suitability for beginners.

Stocks or shares are one option available to you. When you buy stocks or shares, you receive a portion of a company and become a shareholder. While you can earn dividends and see your money grow if the company performs well, you could also lose money if the company does poorly.

If you’re looking for a less volatile investment option, you may consider bonds. Bonds allow you to loan money to a company or government in exchange for a fixed interest rate. Bonds are less risky than stocks but have a lower return rate.

Mutual funds and index funds both allow you to invest in several companies with different combinations of bonds, stocks, and other investments. Mutual fund managers tend to take a 1.4% fee on your portfolio, whereas index funds are passively managed with a higher barrier to entry.

Exchange-traded funds (ETFs) are like index funds, but with a lower barrier to entry and a fluctuating price throughout the day. You may also consider real estate investment trusts (REITs), which allow you to invest in multiple real estate companies and profit from real estate without the risks of becoming a landlord.

Finally, hedge funds are mutual funds, but with a higher risk tolerance, run by investment fund managers to outperform the market. Commodities and alternative investments like art, handbags, NFTs, and cryptocurrency can also diversify your portfolio while combating inflation.

To conclude, as an investor in training, you must choose the option that best suits your needs, keeping your goals, and risk tolerance in mind. Knowing the different types of investments available and their characteristics is the first step to becoming a successful investor.

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