Why young women should invest early

4 tips—and one major benefit of starting now

If you’re a young woman just starting to think about your financial future, the thought of investing may seem a bit daunting. It’s easy to get overwhelmed by terms like ‘asset allocation,’ ‘risk-adjusted returns,’ and ‘liquidity’. Plus, there’s the pressure of making the right choice and growing your wealth.

But here’s what you need to know: simply getting started is the best decision you can make. And the earlier you start, the more power you have to grow your wealth.

It’s not just about having a comfortable retirement one day – investing now can also help you navigate life changes with the help of financial security. But the road to investing often comes with hurdles, particularly for women.

Why women are sometimes hesitant to invest

The barriers to investing for women aren’t always about a lack of interest – they’re often about confidence, perceived risk and financial literacy. But a recent study from the Ontario Securities Commission found that women actually tend to underestimate how much they actually know about investing.¹ This underscores the importance of getting solid financial advice to build confidence and knowledge women need to invest with assurance.

In fact, studies show that when women do invest, they often exhibit more disciplined investment behaviours and generate stronger long-term returns. Investing is an effective way for women to take charge of their financial future.

Why women need to get a head start

Women face some unique financial challenges that make it even more important to start investing early. Here are a few:   

1. 1. Longer lifespan
   On average, women live longer than men, which means they need to plan for a longer retirement period. To maintain quality of life well into your golden years, investing early is key to building up a retirement fund that will last.
2. 2. Career gaps
   Many women take career breaks for things like maternity leave or caregiving responsibilities. These interruptions often lead to fewer years of contributing to retirement savings. Starting to invest early can help make up for those gaps and ensure you have enough saved for the future.
3. 3. The gender pay gap
   While we’ve made some progress, women still earn less than men on average. This wage disparity makes it even more critical for you to take control of your financial future through investing, so you can accumulate wealth and bridge the earnings gap over time.

How to break through barriers

The good news? It’s not as hard as it might seem. Here are four practical tips to help you take charge of your financial future:

1. 1. Find a good financial advisor 
   If you’re feeling lost, a financial advisor can help you chart your path. More and more women are entering the field, and some even specialize in helping women navigate their unique financial challenges. A good advisor can help you understand your options and help you make informed decisions.
2. 2. Ask questions 
   Whether it’s talking to your advisor, finding a support network, or chatting with friends who understand investing, asking questions is important to help you get started. Don’t be scared or embarrassed to ask. It’s not about knowing everything right away—it’s about getting curious and learning as you go.
3. 3. Boost your financial literacy 
   Start with the basics and build your knowledge (and your confidence) over time. There are plenty of resources—books, podcasts, online courses, and even social media accounts dedicated to financial education.
4. 4. Stick to the basics
   It doesn’t need to be complicated. Start with saving consistently, living within your means, and getting familiar with investment basics like index funds and ETFs. As you grow more comfortable, you can start exploring other strategies.

The importance of having a solid foundation 

When it comes to investing wisely, building a solid foundation is key. The first step is to ask yourself a few critical questions.

“First, ask yourself if you have enough liquid cash to cover your emergency needs,” An advises. “It’s crucial to be prepared for the unexpected so you’re not scrambling when life throws a curveball your way.”

But there’s more to it than just having cash on hand. An suggests, “Do you have high-interest debt that should be paid off first? High-interest debt can eat away at your finances, so clearing that out should be a priority before you dive into investing.”

And, of course, knowledge is power. “Have you taken the time, either independently or with professional guidance, to understand the essential principles of investing?” An asks. Understanding the basics is key to feeling confident in your financial decisions. By taking the time to ask these questions and do the groundwork, women can gain the knowledge and confidence to build a path toward long-term financial stability. It’s about setting yourself up for success.  

The biggest factor in your favour

Here’s the most powerful thing working for you: time. You’ve probably heard the saying, “time is money”, because it holds serious weight when it comes to investing.

Investing early gives you options and flexibility. The longer your investment horizon, the greater your ability to take on risk. Why? Because time allows investors to ride out market downturns and benefit from subsequent recoveries.

Each investment, whether stocks, bonds, funds, ETFs, or alternatives, has its own objectives, risk profile, and expected returns. Historically, riskier and more volatile assets, such as stocks, have delivered higher long-term returns compared to safer, less volatile investments like bonds or cash. A longer investment horizon enables you to explore a wider range of investments across the risk spectrum.

Starting early also allows you to harness the power of compounding—earning returns not only on your initial investment but also on the returns that accumulate over time. The earlier you begin, the greater the potential for long-term growth.

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Get proactive – invest in yourself

Women already control a significant portion of the world’s wealth – and that number is expected to increase. When you invest, you’re not just growing your money – you’re taking control of your financial future. It can seem overwhelming at first, but once you break it down into manageable steps, it becomes much more approachable.

We can help

Whether you’re just beginning your investment journey or looking for guidance to optimize your strategy, we’re here to help. Reach out to us for personalized advice and support tailored to your goals.

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[1] Investor Knowledge Study