If you ask the average Australian woman who wants to invest but hasn’t, this will likely be their excuse.
“I don’t know how.”
It’s a phrase financial wellness advocate and Ladies Finance Club founder Molly Benjamin has heard hundreds of times in her career, and it’s one she’s determined to break down.
Now, she’s partnering with an investment platform to plug the investment literacy gap by launching an investment trading game.
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The idea? Upon signing up, people get access to $100,000 in virtual money that they then invest using eToro over six weeks, with real prizes for the most successful investor.
The Yahoo Finance Women’s Money Movement sat down with Benjamin to discuss women and investing, the challenges holding women back and why women can and should invest.
When did you first start investing and what was your first investment?
My dad was a very keen investor and he got me involved in investing when we were really little. He would get us to pick some stocks in the newspaper, and we'd have to follow them over periods of time but I never really knew what [the stocks] were.
I just knew that it was called this one thing and I'd just watch it but I didn't really know what was going on. I think he was just trying to expose us to shares early on.
My first ever share I bought, I'm pretty sure, was David Jones. I bought it because I thought, “Well, I know what David Jones is; my mum shops there, I shop there”.
We know women are often really really scared of investing, and I think it can help to hear other people's stories of the mistakes that they've made and how they recovered. What's been the biggest money mistake you've made?
It was probably not having any strategy around investing. I would … just buy pieces here and there and I would buy companies, not exchange traded funds (ETFs), because I didn't know what they were.
I would very much listen to what my dad was doing, what my dad's friends were doing, but they also were selling and buying and selling. I wasn't, so I had some winners … and some real losers.
I was not doing enough research into individual companies to be buying individual stocks. I look back on my portfolio and the winners were the ETFs. The losers were the ones where you think you’re a bit of a stock picker, but you use it almost a bit like gambling.
It’s interesting that you say that because I think the image that we still have of investing is that guy shouting at the screen in the NASDAQ and, “buy low, sell high”. It really can look like you need to be an absolute expert rather than taking a different route which can get you that broader exposure.
Yeah, and you look at the stats and 90 per cent of active fund managers in the US couldn't beat the S&P 500, so what chance do I have?
Now, for me, unless I’ve done a lot of research, it’s only ETFs [that I invest in].
We know that women tend to achieve greater returns when they invest, but they're also less likely to invest. Your job is literally to help women improve their financial security. What are some of the most common reasons women are giving as to why they don't invest?
A lot of it is that I hear this word: “scared”. They're scared of losing their money.
And again, that comes with education. Let's say they were putting their money in the ASX200 ETF. Well, the top 200 companies of Australia would have to go bankrupt to lose all of your money.
We're not saying put all your money in, but educating them on the fact that investing is a lot less risky if you use different strategies.
Another one I hear is, “I've left it too late, what's the point?” And again, we’re talking to women, sometimes in their 40s, who will say, “I've left it too late”.
I'm like, “You're still gonna be alive for a very long time. There’s heaps of time for that compounding to work”.
Another one I hear is, “It’s like gambling”. Again, it’s just about showing them the difference between putting money on red or black versus putting it in an ETF.
There’s one other one I hear, which is that they're confused by it. They don't know what to do.
[This] is what we're trying to achieve with this competition: break it down and simplify [investing].
It's interesting that people say that it's like gambling because I haven't heard that excuse before.
When they’ve said that as well, generally they’ve spoken to someone who has put [all their money] into one company and that company has gone bankrupt.
They hear those stories and they go, “Oh, well, it's like gambling. I don't want to do that”.
Stockspots’ Chris Brycki has been quite vocal about this. He believes investment platforms like Robinhood in the US are bringing investing closer to gambling through the gamification of those particular investment apps. What do you think about that?
Yeah, I think people will - if they're that way inclined - find a way to make it into a form of gambling. But they're not the principles we teach. We're all about long-term investing.
As you said - women make really good investors. I think as well with women, we've got a little bit more to lose. We're already at a major disadvantage as we’re living longer, but earning less: there’s a pay gap and a super gap.
I think maybe that is a reason why we keep a lot of our money in cash. If we need to get out of situations, we want to have that money there.
But as far as the gamification goes, I think sometimes it's not necessarily a bad thing if you have two pay fees because it can almost put you off [making impulsive trades].
Changing tack slightly, when did you launch the Ladies Finance Club and when did you bring it to Australia?
I launched it in February 2018, in London, in my living room with my girlfriends. We literally would order pizza, they’d bring wine, and we would talk about money.
Fast forward a few months and I was running large events where we would have 100 women coming to London. We obviously outgrew my living room, but it was still the same principle of bringing women together, having a drink, enjoying actually having a conversation about money and creating that safe space where no question was too dumb.
At our very first live event, we had about 80 women and 50 per cent of them worked in financial services.
I heard things like, “I'm just too embarrassed to ask. People expect me to know”.
I was working in financial events and communications and marketing and I couldn’t tell you where my pension was or how much was in it, as many of my colleagues couldn't either. So it was definitely this big financial literacy gap.
So it started then and we brought it to Australia in 2019.
You guys grew fast.
It just shows that women are so keen to learn about their finances and take control of their finances.
So you came from the UK, you'd launched the Ladies Finance Club, you found that women had all of these concerns about money and investing. Why did you decide that partnering with eToro to launch a trading competition was a way to start to unpick some of these assumptions?
The biggest thing I hear from women is, “I don't know how to invest”. What I really liked about eToro as a platform is because you get virtual money, you can practice, you can place trades, you can see how easy it is.
Let's face it, a lot of the platforms are very similar, whether it's eToro or NAB trade, Pearler, Superhero - you’re putting in how much you want to buy and then you’re buying it.
It’s even like eBay. It’s just like you’re buying anything online. But we’ve made it so complicated but it’s actually pretty simple.
I always say, “If you can shop online, you can buy shares online”.
What I really hope will happen is people open up these virtual accounts, they'll have a bit of fun, they'll play around, they'll see how easy it is to get started in investing, and then they'll be confident to maybe dip their own toes in the water.
And they can come back to that virtual account in two years’ time and say, “OK, well how well did my virtual portfolio go?”
I just really loved that eToro had the ability to do a virtual portfolio as well. And also the fact that in Australia, the financial markets make up less than 2 per cent of global markets. With eToro, they have 18 different exchanges. They've got the biggest companies in the world.
People can see these names that they’re familiar with - they see the Teslas, the Facebooks, Instagrams, the Zooms - and they can invest in those companies. It’s almost a bit of a missing piece of the puzzle.
I'm going to make a prediction. I think you're going to get a lot of women who sign up for the challenge, then they get to the end and they go, “Oh my God, I wish I'd invested real money”.
I think so. I know a few people have already said, “If I go really well, I'm just going to be annoyed that I didn’t invest real money”. But you know, it’s really just that they can feel confident going into the real thing.
I’m hopeful. I always go back to the ASX report that found that around 40 per cent of new investors are women.
That actually brings me to my last question: we know that women retire with much less super, we face a gender pay gap. Why do you think it’s so important that women invest?
It’s so they have control over their own money and control of their own situation. A lot of people talk about financial freedom and a lot of people don't know what that financial freedom number is.
With control of your money comes control over your life and control over your situation and circumstances. It means you can leave a relationship if you're not happy, you can leave a job if you're not happy and you just have more control over what you want to do.
Sometimes women will say, ‘Well, I don't even need that much money to live on.’ I say, ‘Well, that's great then but then you can give that money to a passion you care about. It means you can take time off to volunteer or… do something meaningful with that time.
When: The Ladies Finance Club and eToro Share Trading Game launches on Monday, 1 November and runs until Friday 11 December.
I want to learn more about investing: The Ladies Finance Club will host three information webinars over the course of the competition.
Monday, 1 November: Investing 101 & How To Sign Up
Tuesday, 16 November: How To Pick A Winning ETF or Share
Tuesday, 30 November: Investing Responsibly (ESG): Good For You And The Planet
Where: Sign up for the competition here to access your virtual $100,000.
What do I win? While the investments aren’t real, the prize money is. The competitor who finishes the game with the largest equity in their portfolio will win a $500 prepaid credit card and two one-on-one investing masterclasses with eToro financial experts.
Take control of your money and learn to maximise it with the Women’s Money Movement! Join the club on LinkedIn and follow Yahoo Finance Australia on Facebook, Twitter and Instagram, and subscribe to the Women’s Money Movement newsletter.