How To Make Sure Your Career Invests Back In You
Of all the advice women receive on how to invest in their careers, there is a fundamental principle for smart career management: make sure that your career invests back in you.
Especially for women, it’s important to manage and maximize the financial returns of your career advancement.
Return On Career Investment
There is significant data to suggest that women generally receive a lower return on their career investment than men do. Research has shown, for example, that women reap less career and financial benefits for building strong connections on Wall Street; for combining education, experience and ambition; for performing equal work; for holding top executive positions; and for leading strong company performance.
But the pay gap is one aspect of the return on career investment gap in which women may hold more power and influence than they are asserting. With smart and pro-active management, your paycheck is not the final say on your ultimate financial nest egg, especially as you advance in your career and to earn more money to optimize.
The Financial Confidence Gap
A new study from Regions Private Wealth Management identified a financial confidence gap. Among survey participants, women, especially younger women, expressed lower levels of financial confidence than men and greater uncertainty about their financial outlook.
The data showed that when it comes to making investment decisions for retirement, more women than men described their risk tolerance as “conservative.” As a result, women may be inclined to prefer financial vehicles deemed “safe,” such as savings accounts or CDs with little growth potential, rather than invest in stocks and bonds, which typically provide greater returns over the long term.
Women’s lack of confidence around investing could inhibit women from investing or investing more assertively to reach the financial goals they hope to attain with their career, and compound the impact of the gender pay gap.
Women Should Be Confident in Investing
A confidence gap is rarely a reflection of ability, as studies have shown women tend to underestimate their ability and men tend to be overconfident. The reality is women who have educated themselves regarding potential investments have reason to feel good about their ability to choose wisely.Also, women are more likely to turn to others to fill information gaps, meaning more willing to turn to financial professionals and trusted friends for guidance.
This pays off. When it comes to investing, women who do invest tend to perform as well or even out-perform men with their portfolios, showing women generally display some savvy investor strategies, even if opportunity remains.
But just as too few women negotiate their salary compared to men to maximize income growth on the front end, too few women take the opportunity to maximize their investments by considering all options.
Stepping Up to The Investment Game
Here are three tips from the advisors at Regions Private Wealth Management to step over the financial confidence gap, and get into the game of managing the assets you accumulate through career advancement:
1. Gather your financial information.
To form a complete picture of your financial situation, map out all of your savings and investments as well as any significant liabilities you may need to factor in to your overall goals, such as paying off student loan or credit card debt. If you have a spouse or significant other, discuss where all accounts are held and make sure you both are able to access them in the event of an emergency.
2. Meet with a financial advisor.
Share your financial situation with a qualified professional, who can help determine if your portfolio is aligned with your risk tolerance and structured to meet your goals. An advisor can suggest ways to diversify a portfolio to help weather market fluctuations as well as help make any necessary adjustments and introduce strategies that could provide tax or other benefits. Remember investments are different.They are not a bank deposit or insured by the FDIC, they may lose value, and they may not be insured by any federal government agency.So, don’t be afraid to ask questions. Your financial advisor should go at the pace you set and provide any background information needed.
3. Commit to reviewing your portfolio.
Check in on the performance of your accounts on a regular basis, such as once each quarter. While you may not need to make adjustments, simply seeing how your portfolio reacts to market movements can build familiarity with the investment process and build confidence in your choices across time. Meet with your financial advisor on an annual basis to ensure the portfolio remains on target or to adjust for changes in circumstances, such as an unexpected windfall.
No matter where you are in your career, stepping more confidently into the investment game, while pulling in sound financial guidance along the way, can help you maximize the financial returns of your career and ensure your career invests back in you.
This article was sponsored by Regions Private Wealth Management.
