Money & Policy

How Women Who’ve Never Invested Can Get Started

Lack basic knowledge about stocks, bonds and mutual funds? Here's the way to wise up

Although grown-ups aren't supposed to believe in fairy tales, many women still cling to one — that their husbands will take care of their money. A recent study by Fidelity Investments found that husbands are the primary retirement financial decision maker for 37 percent of couples, and only 17 percent of couples are confident that either spouse could assume responsibility of their joint finances if necessary.

But women who leave investing decisions wholly to their husbands could be making a serious financial mistake. After all, most women ultimately find themselves on their own, often because they become widowed or divorced.
Financial experts say that women who have never invested or learned the basics of investing should make these essential moves:
Pepper Your Husband With Questions

If you're married, ask your husband about each stock, bond, mutual fund and retirement account you own together — and any he owns separately. Get him to tell you how much each is worth and which brokerage, mutual fund company or employer savings plan holds the investments. If he owns investments separately, check to see whether you are listed as his beneficiary.

Having this information will help you assess your retirement prospects, and it will protect you if you divorce or your husband dies. Brette Sember, author of The Divorce Organizer and Planner, says women also need to know where all the paperwork for these investments is located and have access to it.

Start Getting Educated About Investing

Three specialty websites are great places to begin:

The National Endowment for Financial Education’s site, Smartaboutmoney.org, offers an excellent resource library with free guides that explain stocks, bonds and mutual funds. (NextAvenue.org has some helpful personal finance articles from the National Endowment for Financial Education as well, such as one on dividing assets after a divorce.)
Morningstar, the investment and mutual fund advisory firm, includes two areas on its site that are geared toward novices: Start Investing and Get Started Classroom, with free primers about mutual funds and stocks.
The Motley Fool is a free personal finance and investment education site that’s cheeky and entertaining. Its How to Invest area provides a useful glossary of investing terms, tips on choosing a broker and a relatively conservative approach to investing in stocks.
Becoming a member of the National Association of Investors Corp. is a good next next step in your investment education, especially if want to learn more about the stock market. For $79 a year, it provides access to online classes and webinars, research reports on particular stocks and investment tools. The NAIC can also help you set up an investing club and point you to ones near you.
Understand the Basics of Investment Risk

Every investment carries some risk. But in general, the riskier the investment (that is, the higher the odds that you could lose money), the greater its potential return. Stocks tend to be riskier than bonds, and stocks in small companies tend to be riskier than stocks in larger companies.

Don't take more risks than you can afford, or that you're comfortable with at this stage of your life. Walker-Green says that women in their 50s need to focus on preserving their money more than looking for maximum returns. "A 50-year-old is really trying to play catch-up," she says.

Find a Financial Adviser

You can certainly invest on your own, but many people just starting out prefer to work with a financial adviser, like a certified financial planner or a retirement planner. A pro can help answer questions about whether ther investments you’re considering are appropriate for you, as well as any questions you have about the markets.

You could find potential financial planners nearby by searching the web directory of the National Association of Personal Financial Advisors. Or ask your friends for referrals. If you’re going through a divorce or have recently become a widow, you might also ask your divorce attorney or estate lawyer for recommendations.

Begin Investing at Work

If you have a job that offers a retirement savings plan like a 401(k), but you've never taken advantage of it, this is where you should start. "You want to make sure you contribute to your 401(k), at least to the extent that your employer matches your funds," says Barbara Walker-Green of Advanced Wealth and Retirement Planning Concepts in Houston. The employer match is essentially free money.

Jennifer Calandra, co-founder and chief operating officer of the Calandra Financial Group in Atlanta, says it’s important to put money in the retirement savings plan even if you have debt to pay off. "You need to look at your retirement and start saving for it," she says.
Some people don’t contribute to their retirement plans because they’re overwhelmed by the investment choices. If you’re flummoxed when it comes to deciding which investments are best for you, ask your employer for information explaining the options. If you have a financial adviser, discuss the alternatives with him or her as well. There's nothing wrong with being a novice unless you don't ask for help.
By Ann C. Logue
Ann C. Logue is the author of books including Emerging Markets for Dummies and has written for Next Avenue, Barron's and Entrepreneur.@annielogue

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