Returns matter a lot, it’s our capital”
-Abigail Johnson
As a multiple business owner and most importantly, female, I am no stranger to the financial risks every entrepreneur defies in starting up a business. No matter how carefully calculated and constructed our plans are, the best we can do is to minimise the risks. We can navigate the hurdles, however, by constantly anticipating them and strategizing ways to cushion their effect on our businesses. One powerful and proven way to achieve this is by investing.
Investment basically means the use of assets to earn income or profit. It is a good way to generate maximum returns on our assets that would otherwise have been sitting idle in the bank. With the returns from our investments, we can meet our company’s financial needs, timing and risk profile which could make all the difference in whether our businesses survive a short change or not.
Luckily, we are witnessing a shift in the market as more women are leveraging investment opportunities and yielding positive returns. We now have female fund managers, financial advisors who are women, women investment clubs.
Studies have also shown women to be better investors because they are more long term in their approach, well calculated with their risks and understand that it’s the time in the market and not timing that matters.
There are a host of investment options to go for from agro investments, stocks, bonds, fixed deposits, mutual funds and real estate, but as a business owner, it’s important to assess the financial needs and goals of your company in relation to your investment options.
Also, do not view investment from the lens of a doubling money scheme. Be smart about your investments, always put your businesses interests first and don’t get into what you don’t understand.
In this article, I have summarised five benefits that female business owners stand to gain when they invest.
1. Creates new opportunities: If women are to level the playing field in the business world, we need to have financial power and investments are a good way to achieve this in the long term.
When our investments yield rewarding returns, they provide opportunities for us to stretch our business capacities. With more money, we can improve our products and services, serve our customers better, expand into new markets, and negotiate seats at the table which encourages other women to aspire and stay motivated on their business journey.
2. Outperform Inflation: The rate of inflation will always be greater than the interest rate we get from a savings account. Yes, Investing takes more risks-even possibly losing money in the hopes of a higher return rate, but not without a possibility of greater growth.
Investments give our assets the opportunity to experience capital growth. These returns can provide us capital to run our businesses when we are shortchanged. Like I said, always weigh the risks of investments against the potential rate of return.
3. The world wins: It’s a common saying that when women invest, the world wins. This is because women are more ethically driven with their investment portfolios. They are sustainable in their approach and go for investments that reflect their values. With this, they can influence a company’s behaviour and contribute to sustainable development in society.
4. Enhances Decision-Making Skills: As investors, we are often faced with dicey decisions on whether to buy or sell our securities quickly. Sometimes these decisions have to be made in the absence of adequate information, but we make them anyway and stand by our guts. Even if it doesn’t work in our favour, we learn from the pitfalls and apply them to our futuristic decisions.
What’s true for investing is also true for our businesses. As entrepreneurs, we can incorporate lessons from risk/return relations to making strategic decisions for our businesses.
5. Personal development: The wealth of knowledge we gain from trading in the financial market cannot be underestimated. Knowledge will always stand the test of time and put us in the driver’s seat of our lives. With it, we can make better decisions concerning our finances, retirement, families and most importantly impact the communities of women around us.
Building a portfolio of quality investments is a surefire way to financially advance your business and gain the power that is key to gender equality. As women entrepreneurs, we should take the lead to close the investment gap, which unfortunately is still male-dominated. Through our stories, we can break down the barriers and create an investment equal world.
Download the HerVest app today and join our community of women impact investing and saving towards their financial goals.