We’re all thinking about money more than usual these days. How to stretch what we have, and how to make the most of what we’ve managed to save.
If you’re lucky enough to have squirrelled away a rainy day fund, you may think the safest place for your pennies and pounds is in a savings account. And you’re not necessarily wrong: in February, the Bank of England raised the base interest rate to 4 per cent, so top-performing savings accounts are now offering the best returns that we’ve seen in a while — especially if you can lock in your cash for the long term.
Right now, SmartSave is offering 4.41 per cent if you’re happy to tuck away your cash for three years. The catch? You’ll need to deposit at least £10k to qualify and even then, you’ll only have earned £441 in interest by the time 2026 rolls around.
Better than nothing? Maybe. But in the face of inflation, a savings account is marginally better than stuffing your cash inside a piggy bank — and at least there are no early access penalties if you decide to crack said swine open.
Yet there is another way to nourish your personal money tree, but only if you’re in it for the long-haul: by DIY investing in stock and shares. Despite what Hollywood would have us believe, this world isn’t the sole reserve of chest-thumping men lunching in impossibly swanky restaurants; the average Joe — and Joanna — can do it too.
But Joes are doing it more. More men invest than women, creating a chasm of nearly £600bn according to a Boring Money study, known as the financial gender gap. And, according to Kantar’s Winning Over Women report, the ratio of male to female customers in the top DIY investment platforms is thought to be 68 to 32. Why is this?
Men are regarded as more risk-tolerant, a plus when there are multiple moving factors and variables at play. For example, the pandemic, Brexit and last year’s Russian invasion saw the markets take a pummelling, which could spook nervous and rookie investors. Then there’s the question of research: many women say having the time to look into it is the biggest barrier to DIY investing. Plus, men still earn more than women in most industries, which means they’ve got more disposable income when it comes to buying stocks and shares. All this puts women at a distinct disadvantage.
Founder and CEO of Boring Money Holly Mackay points out the benefits of shares versus a savings account: “Cash is a known deal. There’s an interest rate we get, full stop. With shares it’s uncertain; we have great years and bad years. Over the last five years, a mixed bag of shares from around the world would have turned £10,000 into about £14,000. Cash might have gone from £10,000 to about £10,500.” She concludes: “Cash just doesn’t do as well as shares in the longer-term.”
One of the biggest reasons this world is so disengaging is because it’s bogged down with jargon and numbers — or “technobabble’, as Mackay puts it. The result? “We turn off and assume their world isn’t for us. We think it’s too risky, only for rich people, or people who are good at maths. But investing is simply backing the world’s biggest companies and sharing in their growth, from Apple to British Airways, from HSBC to Microsoft. Yes, there will be ups and downs. But it’s not the same flavour of risk as backing crypto or other speculative things.”
It’s tempting to lump your nest egg into an ISA and let the Savile Row-suited middlemen sort it out, but it’s your money; isn’t it better to be in control of it, hands firmly at ten and two in the financial driving seat? It may seem like some folks come tumbling out of the birth canal armed with financial knowledge, but the truth is, everyone begins at the same starting block. Knowledge is learned, it’s not innate.
It’s a message that financial educator and investment community Female Invest is on a mission to spread. The company, now in its fourth year and with $7m in funding under its belt, pulls back the curtain on personal investing, dispelling the mysteries of stocks and shares and empowering its mainly female and non-binary subscribers with the confidence to buy and trade for themselves.
Their book, the feminist manifesto Girls Just Wanna Have Funds (£12.59, Amazon), has sold 25,000+ copies, read everywhere from Australia and Italy, to Canada and Dubai. It complements the platform and has rave reviews, bringing together history and social issues with the business of investing. Spurred by its success, another book is in the works.
Headquartered in Denmark, the company was founded by Camilla Falkenberg, Anna-Sophie Hartvigsen and Emma Due Bitz, who met at Copenhagen Business School in 2017 and have since made Forbes’ 30 Under 30 list. They bonded over a shared frustration at the lack of information on self-investing and penned a book — Ready, Set, Invest — which became the seedling for Female Invest.
This is feminist finance school — one that’s been backed by Emma Watson to boot — a straight-talking portal with galvanising courses on personal finance, investing and financial wellbeing, covering everything from the merits of ploughing money into property to exactly how to invest on trading platforms. There’s food for thought too. In one video, Hartvigsen explains, with BFF-levels of familiarity, that investing can be about more than money. It’s a way of voting for companies and shaping a better world: think sustainability, green tech, renewables.
You don't need thousands in the bank to start investing, either. "Some trading platforms offer investing accounts from as little as £25 a month, but we warn Female Invest members about the trading and account fees which could easily eat away half of this amount, meaning you only invest a small amount each month in the actual stock or fund,” Hartvigsen and Falkenberg told the Standard. “Instead, we’d suggest saving up a few hundred pounds and investing it every other month in regular chunks to ride the peaks and troughs. Shop around for FCA-regulated trading platforms and compare their charges. Then aim to invest a sum where the fee is under 10 per cent of the overall amount. And remember, it’s a marathon not a sprint."
When women are left out of the conversation, they say everyone loses — not just women but “their families, companies who don’t recognise the talent they’re passing by or not supporting, and actual entire economies. McKinsey reports that advancing women’s equality could add $12 trillion to global growth, and companies with more women on the board perform better than those without diversity.”
It’s Female Invest’s community — accessed via app exclusively — that makes you supported navigating virgin territory. Here’s where you’ll find groups to celebrate financial triumphs, chats for personal finance, plus advice for British users on UK-relevant products like ISAs, pensions and funds.
That Female Invest is simply sharing knowledge — not managing your money for you — wins a certain level of trust: there are no vested interests to dodge. A year’s subscription costs £99, working out to £8.25 a month — that’s around the same as Netflix. Keep watch on Instagram (210k followers) for discounts; you can bag a subscription for as little as £49 for the first year.
Meanwhile luxury workwear brand The Fold has launched the Start with One campaign that aims to get more women engaging with and talking about money. The company is sponsoring 50 Female Invest memberships so that more women can be part of the conversation after its research showed while we’re more likely to be asked about weight, relationships or having kids than investing, we’re also more likely to start investing after speaking to someone about it.
There are other resources to help wannabe investors make the most of their money, but Female Invest’s Hartvigsen and Falkenberg are clear that “DIY investing does take time and dedication, especially building a foundation understanding of how the market works and filtering through trading platforms.” In other words, do your homework before anything else.
Recognising that gender is just the first layer of the onion, Black Girl Finance Fest INVEST is a one-day event sponsored by Scottish Widows to empower Black and ethnic minority women, who typically have less capital to play with than white women, and level the playing field. Headed by financial coach and author of Black Girl Finance - Let’s talk money (£12.99, Amazon) Selina Flavius, it takes place on March 11 in central London with a schedule of expert speakers, workshops and finfluencers covering all things personal finance (tickets £38.62, Eventbrite).
Then there are apps like Moneybox (free), Financielle (app, £23.99 a year), Obu Invest (female-focused fintech platform) and FreeTrade (commission-free investing) to help you take stock. Neither Female Invest, Black Girl Finance nor the apps promise overnight riches. Instead, they offer a warm, intimidation-free approach that will help many who have considered investing but didn’t know where to begin.
And right now, can we really afford not to? As Mackay plainly states: “The very simple truth is that women will be less well off in the long run if we keep saying no to investing.”
Five top tips to investing in stocks and shares
- Read the papers. Investing shouldn’t be a roll of the dice, look at the news and take note of growing and emerging industries and the companies shining within them. Utilities, IT and healthcare are broadly safe bets, while green sectors offer the most opportunities for growth. If you’ve enough time to scroll social media, you’ve got time for this.
- Build your pot. Set up an easy-access savings account with a decent interest rate to build your pot, ready for an initial investment. These accounts let you withdraw without penalties. Around £300 is about right for your first stock or share buy. Tandem Bank, Post Office and Nationwide currently have good options.
- Research investment platforms. There are dozens of options out there, all offering something slightly different. Make sure they’re FCA-regulated and take note of their fees and charges — big numbers will eat into your returns. Female Invest advises "to invest a sum where the fee is under 10 per cent of the overall amount".
- Get comfortable with the idea of risk. Markets, both the UKs and global, ebb and flow, but they’ll typically offer better returns than a savings account — sometimes as much as 10 per cent. If you’re nervous about risk, depositing small sums over a regular period can provide a shield. It also means you can pause buying stocks and shares if you need to.
- Be prepared for the long-haul. Whether you’re hoping to buy your first home, boost your pension fund, or finally go on that once-in-a-lifetime trip, having more money means more freedom to do what you want with it. Expect a timeline of 5 - 10 years to see real growth on your money. The long-term means that younger people are prime for DIY investing, although you can start at any age.
