SoFi’s Liz Young Thomas on Why More Women Should Invest

Don’t Stand Still

Liz Young Thomas, SoFi’s Head of Investment Strategy, loves this quote from former Intel CEO Andrew Grove: “The greatest danger is in standing still.”

Instead of sitting on their money, more women should become investors, she said during SoFi’s Women’s Financial Empowerment webinar series.

“I want to see women take some more risk in their investment portfolios because you need the risk in order to produce growth,” Young said. “And I want to see more women have an investment strategy.”

Prioritize Investing

Despite the fact that 45% of women are the primary or majority source of income for their household, 64% have never invested, compared to 47% of men. Women also live, on average, six years longer than men.

“We live longer and that’s great,” Young said. “But that also means that you need your money to last longer.”

Women want to invest, said Young, but just aren’t prioritizing it. Because they’re making more of the daily household purchase decisions than men, they’re probably feeling the effects of inflation more acutely, which could be lowering their risk tolerance.

When asked by SoFi, “Why are you not invested in the stock market?,” more women than men said they didn’t know enough about investing, didn’t feel confident investing, were overwhelmed by investing, and didn’t know how to make their first trade.

SoFi can help with that last one. The rest, however, require a shift in mindset. Getting to a place where you’re 100% confident about every investment you make is probably not going to happen, Young noted. “Don’t let it paralyze you and prevent you from making a move,” she said.

Once you up your risk tolerance, it’s important to educate yourself about investing. Luckily, that’s become easier over the last 10 to 15 years, Young said.

“The industry has come a very long way in providing resources for individual investors,” she pointed out. “Most companies that have trading platforms have a plethora of resources.”

Don’t Sweat Mistakes

Young said that “if you make a mistake, it’s okay, because everybody makes mistakes.”

“Frankly, making a mistake while investing is the fastest way to learn, because if you lose money on something, you’re going to pay attention … and you’re going to try to figure out why you lost it.”

That doesn’t mean investors should take unnecessary risks, however. They would be wise to think long-term, like Warren Buffet, she said.

He’s considered one of the best “for a reason, because he is patient,” Young said. “He buys companies in order to hold them for a long time, he digs deep into what a company does, and he understands it before he buys it.”

Obviously, most people don’t have the experience, time, or resources to try to emulate Warren Buffet. But they can create a rough plan by answering a few questions: “What’s my strategy? What’s my risk tolerance? What’s my return target?”

Ultimately, while investing, “you don’t have to be all the way in on stocks,” she said. “But you do have to be present, you do have to take some risk, and you do have to put some money in the market.”

For more helpful tips, check out the webinar here.

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