Welcome to the May 2022 Manager Panel! Each month, where relevant, InvestNow will ask some of our fund managers some questions surrounding a topic. This month we asked Macquarie Asset Management, Mint Asset Management and Pie Funds some questions in relation to the Financial Services Council (FSC) ‘It Starts With Action‘ campaign. The campaign aims to grow women’s financial wellbeing and we are really excited to be supporting this awesome initiative!

The campaign period is May-July 2022, with certain themes taking place over this timeframe. From the 16th-29th May, the theme is ‘how to make your money work smarter‘ – in which the FSC is sharing videos on myths about money. The Manager Panel this month will focus on this theme. Check out the videos from the FSC and see what other myths you can think of.

See here for a list of other activities that are happening during the campaign period.

1. What myths have you been told about money? Why are these myths not true?

A common myth is that women like spending and are inherently bad at managing money. That’s simply not the case as women make investment decisions all the time: managing household budgets and taking responsibility for the family finances, investing in education for children, and running businesses. Nothing about women makes them inherently “bad” with money. They may take a different approach to investing than their male counterparts but this does not equate to poor investment outcomes.

Another myth is that women tend to be more cautious about taking risks, so they invest less aggressively. I think we are less likely to invest in things we don’t understand, regardless of risk level. Once we understand, women are often better long-term investors, using a more consistent and balanced investing approach which can give better long-term results. Being disciplined, having a financial plan and sticking to it regardless of what’s going on is the most important thing that matters to building wealth long term.

2. How do these myths affect women?

One of the main stumbling blocks that affects women is a lack of confidence in their ability to invest, often perpetuated by the myths discussed above. It is also assumed that a lack of money is the reason women don’t invest, but many are slow to begin investing because they lack the financial confidence to get started.

If you’ve been told that women are not good with money, have had limited access to relevant financial education, or grew up in a home where money was never discussed, these experiences may also result in negative feelings around money. Therefore, developing a more positive mindset plays an important part in investing and thinking about money in a way that allows you to believe you will be successful.

3. How can we help women become more financially confident and knowledgeable?

The first step toward gaining financial confidence is to begin simply talking about money. Money is often seen as a taboo subject but a lack of discussion around money can be harmful. However, money is simply a tool that helps you acquire things you need or want. Because we aren’t used to talking about it, we may then lack the confidence or skills to use it to invest.

The next step is to educate yourself. The quickest way to gain confidence around investing is to get educated about it. People who understand investing are less likely to be intimidated by it and more likely to do it. Developing confidence with regard to investing, or finance in general, doesn’t necessarily happen overnight, you’ll need to put some time and effort into it. However, improving financial literacy is key to helping to close the gender finance gap.

I believe young women should be encouraged to learn about money from a young age. Knowledge is key and financial capability education for girls while still at school would help overcome some of the gender gap. The Sorted in Schools programme is going some way to addressing the issue and helping to normalise financial education. Each year the Women in Super group also run activities in schools to support Money Week and raise awareness.

Improving women’s experience with investing can also build more confidence. If you’re new to investing, ease into it by starting small and investing in the share market, even if it’s only $20. The notion of needing a lot of money to begin investing is no longer true, particularly today with share platforms that require minimal investment. Pick an investment platform and learn by doing! Also, don’t forget if you’re contributing to KiwiSaver then you are already an ‘investor’ and providing for your future.

4. What are some useful tools/websites/resources to help build confidence and knowledge?

A lack of knowledge can be a roadblock for women to start investing or get financial advice. However, don’t feel discouraged if you feel less than confident about your money. While investing has been made to seem complex, it doesn’t need to be and there are so many resources available today that aim to build knowledge and help women become more investment-savvy.

Whether it’s personal research, an online class, or seeking professional advice, there are a variety of ways to learn about market fundamentals. There have never been more books geared towards educating women about money management, investing money, and building their personal wealth. There are also a growing number of resources online. The Sorted website, Sharesies, Hatch and the Financial Markets Authority (FMA) have great educational resources. The Curve is another platform, aimed specifically at women, for learning more about money and investing. You might also want to check out the podcast Girls That Invest which is aimed at empowering female investors and is the number one financial podcast in New Zealand. Hosted by two millennial women of colour based in New Zealand, they have a huge Instagram following and are about to release a book.

Conversations about money are also an important part of any healthy relationship. Good Shepherd NZ is a charitable organisation that has some tools on their website to start conversations about money and talk about finances with your partner.

Learning to become financially independent and knowing how to make money work for you is an essential life skill. The key is to educate yourself, have confidence in your investing ability and get started, however small, by taking action.

1. What myths have you been told about money? Why are these myths not true?

“Women aren’t as good at investing than men.”

Interestingly, a study from Fidelity Investments released in 2021 based on an analysis of more than 5 million Fidelity customers over the last 10 years, found that on average women outperformed their male peers by 40 basis points or 0.4%. There are a couple of reasons for this which are highlighted in the FSC video on busting the myths that “Women are risk averse”. Women are in fact risk aware and therefore tend to undertake different tactics to manage risk. For example, they invest smaller amounts more regularly which is known as dollar-cost-averaging, reducing the effect of market volatility. Further, they tend to be less affected by the market volatility and stick to a long-term outlook, riding out market fluctuations and letting compound interest run its course.

2. How do these myths affect women?

Women already have some social challenges stacked against them when it comes to earning and saving, for example, the gender pay gap, being primary caregivers, and time out of work. Overall, these myths are based on social issues rather than women’s ability or attitudes toward saving and investing, and further reduce women’s confidence. Investing is a great way for women to reduce the effects of these challenges and make the most of the savings they do have to ensure they are prepared for retirement.

3. How can we help women become more financially confident and knowledgeable?

As individuals, we can start by opening up the conversation and engaging with each other on all topics surrounding money. Conversations will help women become more informed, more confident, and able to form an opinion and take action. As a wider community, we can raise awareness and promote change for these social challenges facing women. A great campaign is Mind the Gap which aims to help close the pay gap for women and minority groups via transparency of pay gaps within business and a commitment to reducing it.

4. What are some useful tools/websites/resources to help build confidence and knowledge?

The Financial Services Council has an initiative called Money and You, which has resources and content to help you learn about money and improve your financial wellbeing. There are plenty of online tools on Sorted to help with assessing your financial situation, KiwiSaver, savings and budgeting. If you’re in a position to invest savings outside of KiwiSaver, check out the FMA’s guide on understanding the basics of investing. If you’d rather have someone else do the leg work, engage in a Financial Adviser.

Disclaimer: Rebecca Thomas is the Chief Executive Officer at Mint Asset Management Limited. The above article is intended to provide information and does not purport to give investment advice.

Mint Asset Management is the issuer of the Mint Asset Management Funds. Download a copy of the product disclosure statement here.

1. What myths have you been told about money? Why are these myths not true?

Women are not interested in business.  Wrong!  Many, many women are interested in business.  We have some brilliant entrepreneurial role models in NZ, Grace Glass, Kendall Flutey, Amelia Gain, Cecilia Robinson, Theresa Gattung, to name a small handful.  All of these women have started, built and scaled incredibly successful businesses in a range of industries.  The market’s response to these businesses speaks volumes as all have amazing entrepreneurial stories and are indisputably successful in their own right each with their own unique story of how their enterprises developed from an awesome idea.  All of these women have worked tirelessly to change the narrative from what women cannot do, to what women can do.

Women are not interested in investing.  Wrong!  Lots of women are interested in investing and do invest in many asset classes.  That women are not interested in investing tends to be an old fashion view largely borne out of the traditional gender role models, i.e., that it is only the traditional ‘male breadwinner’ of the household that is interested in financial matters and investing while the female of the household is engaged exclusively in the care economy (those more traditional division of responsibilities models do still work for many households).  However, with the extent of social and economic change in the post war era up until the present day, the traditional role models have changed significantly.  Now we see many more shared responsibilities in households, including childcare, main source of income, decision making.  In addition, women’s educational attainment rates have increased significantly in recent decades and in some fields tertiary level enrolment numbers have surpassed male enrolments, for example, law and accounting.  This is a trend in NZ and in other international markets also.  Of course education can also be obtained by doing and engaging in commercial experiences as well as formal courses/programs.  Increased education levels can provide confidence to engage in discussions about money and investments in a meaningful way.  Research shows that women are good savers, making regular contributions to savings accounts and investment plans.  Wealth advisors also report that many of their clients are women who make the investment decisions for their households and family businesses.

2. How do these myths affect women?

If listened to and not critically assessed, these myths can act to erode confidence and prevent women from actively engaging in conversations about money and financial wellbeing.  As a community and an economy, we miss out on so much if an entire group of bright and active minds are excluded from the wider investment discussion.

We know that embracing diversity of thinking in any organisation enables us to make better decisions.  People with different backgrounds, different skills and different institutional experience bring something unique to the table:  money, investments and the investment process is no different.  We know that social norms and etiquette about money chat have changed over time and women are more comfortable engaging in discussions about financial wellbeing and what it means.  The myths are simply that:  myths.

3. How can we help women become more financially confident and knowledgeable?

Take action and get involved!

Learning.  Engage in education about the fundamentals of investing, including key information about different asset classes and what they mean:   shares, bonds, cash, commodities and property.  Regardless of the form that education takes, it is empowering and enables women to participate in the discussion about how to make money work smarter.  Improving women’s economic empowerment is also crucial to achieving equality.

Collaborate.  Form investment groups with people that you trust and respect – friends and family is a great place to start.  Include people who are at different stages of the investment journeys, from beginner investors to those who are more experienced.  Share information and stories about socioeconomic trends and what that means for potential investment ideas, for example, demographic changes in different countries, how the pace of technological change is interacting with how people live, geopolitical events.

Start investing early with a small amount.  Invest regularly.  Have fun!

Everything is subjective so it is important to find out what works for you with making your money work smarter.  Figure out what your risk appetite is and what you want to achieve with each investment.  For example, if you invest $1000 today and you lose that money within 2 months, what does that mean for you?  It will mean something different for everyone.

Always had a dream to set up a business?  Make it a reality.  Get going with that business plan!

Join investor communities by subscribing to email lists, for example, NZ Capital Growth Partners or Icehouse Ventures.  Lots of well researched information will be shared with you without cost and it will also provide inspiration for how to make your money work smarter by investing in some innovative new businesses.

What are you passionate about?  Do you care about the environment and social causes?  There is vast amounts of information available online about different companies that offer products and services that you are passionate about; these can provide insights about potential investment ideas.  Crowdfunding opportunities also enable us to participate in exciting new business opportunities for a relatively small initial capital outlay, for example, sign up to platforms such as Snowball Effect or PledgeMe to learn about some amazing new businesses and investment ideas.

4. What are some useful tools/websites/resources to help build confidence and knowledge?

There are lots of resources, tools, websites available to build confidence and enhance knowledge, just a few are:

• Podcasts, eg., Girls that invest
• Books, e.g., Shoe Dog, Phil Knight’s story about Nike; Sheryl Sandberg’s Lean In
• Professional advisors
• MoneyHub
• Investor Education workshops run by fund managers
• Check out winners and decliners on the NZX website, pick a couple of companies that interest you and follow them for a few months to see what factors drive share price movement
• Company websites of businesses that you are interested in, g., Container Door, Sawmill Brewery and Smoko Room
• International newspapers, such as the Financial Times, The Guardian, The New York Times
• Informed Investor Magazine