Money Matters (From A Female Perspective) A guide for women wanting to attain financial freedom for themselves and their loved ones.

In the progressive landscape of the Middle East, women are making significant strides towards empowerment, overcoming societal, economic, and cultural barriers. In the UAE, for instance, women business owners now account for 10% of the country's private sector. To continue and accelerate this movement, it is crucial for women to have access to the right resources and tools- and managing their finances is the first one.

Yet, we as women are often left behind in the financial services space- a reflection of how the wealth management industry was built by men to serve men. This gets translated into jargon-laden content as well as a definition of success around trading, which is not based on women's needs and priorities. The result: we don't think we are good enough. Only 28% of us globally feel confident to make their own investment decisions. This represents not just a gender investing gap that needs to be bridged, but an empowerment gap that holds us back on so many life goals.

With women taking on a more active role in the economy, the natural next step is to empower them to not just earn a living, but thrive in life via financial strength. Women often defer financial planning to their partners. According to a UBS study, only 19% of women share their long-term financial planning equally with their spouses. This is even though women, on average, have higher life expectancies than men, and, therefore, more retirement years to plan for.

Women born in the year 2000 in the Gulf Cooperation Council have an average life expectancy of 78 years, outliving their male counterparts by two years. Clearly, women need to make informed financial decisions for themselves, and plan for their future retirement. And multiple studies have shown that women are perfectly capable of doing so. For instance, we at Stashaway found that men in the Middle East check their investments 1.5 times more often than women. Such investor behaviour is correlated with impulsive and loss aversion, making investors more likely to react prematurely to short-term market volatility, and withdraw their funds, thereby impacting overall returns.

Personal finance best practices say that before you even think about investing, you should save for a rainy day. Life is unpredictable, and unexpected expenses can arise at any moment, whether it's a medical emergency, car repairs, or sudden job loss. An emergency fund acts as your financial safety net, so you don't have to rely on high-interest loans to stay afloat. As a rule of thumb, your emergency fund should cover at least six months' worth of expenses. To determine this amount, calculate how much you spend in a single month on your needs (e.g. rent, food, utilities), and the contributions you owe each month (e.g. insurance payments, or a mortgage).

The next question is: where do I keep my emergency fund? You'd want to keep your emergency funds safe and liquid. But that doesn't mean you should put it under your pillowcase (aka a savings account with minimal interest), where it loses its value to inflation. Instead, consider placing your funds in cash management solutions that are low-risk, liquid, and offer higher interest rates. StashAway SimpleTM, for example, has a projected rate of 4.5% per annum (as of June 6, 2023). What's more, it has no minimum balance, investment requirements, tiered earning structures, and whatever else the banks have come up with to make it painful to manage your cash. With this, you can easily build your emergency fund with confidence.

Investing isn't complicated, really. You are looking to be a long-term investor, not a trader- so, you don't have to be too concerned about market volatility. If we look at the 2008 financial crisis or the COVID-19 crisis, the market has always bounced back after, and trended up over the long haul. Investing consistently thus allows you to capture these growth opportunities in the market. Dollar-cost averaging (DCA) is a tried-and-tested strategy of investing equal amounts of money at regular intervals, whether weekly, monthly, or quarterly. Start with an amount that you're comfortable with– even the first US$1000 investment will push you to look at where it is invested, stay updated on your portfolio, and think about your next steps.

When you DCA over the long term, the times you buy at a high price, and the times you buy low average out, reducing your risk, and letting your returns grow with the markets. The best part? Dollar-cost averaging frees you from having to time the market, which is nearly impossible. That means more time to focus on what matters the most to you, be it your career, business, or family, without worrying about the market ups and downs.

Investing for the long term also gives your money the greatest chance of growing through the power of compound returns. Compound interest is the interest you earn on interest. To put things into perspective, if you were to save $1,000 and earn 10% yearly in interest, your initial $1,000 capital would have grown to $7,400 at the end of 20 years. So, it pays to invest early and regularly. But remember, don't put all your eggs in one basket. Look at building a diversified portfolio- which, by the way, digital wealth management platforms like StashAway automatically builds for you, so that you don't have to do it yourself.

To bring it all together, if there's one thing I hope you'll take away from this, it's that investing doesn't have to be stressful. And investing is a means to an end- not the end itself. There are plenty of tools out there that can help you automate and simplify your investments, including StashAway. Whether you're a budding entrepreneur, or taking a break from the paid workforce, you're already working hard to secure your and your loved ones' futures- so, it only makes sense that money works just as hard for you.

Related: Pushing Boundaries: Evangelos Kaldelis, CEO, 3S Money (MENA)