I’m a Financial Expert: Here’s What Women Should Do If They Have $25K To Invest
Written by
Gabrielle Olya
Edited by
Molly Sullivan
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A record number of women are investing in the stock market. According to Fidelity Investments’ 2024 Women & Investing study, 71% of women now own stocks, up from 60% in 2023. Yet despite the high number of women investors, very few women feel confident about investing in the market. The study found that women were most likely to describe their investment knowledge as “beginner” (40%) or “non-existent” (32%), and only 1 in 3 women said they’d know what to do if given $25,000 to invest in the stock market.
If you fall into the category of women who wouldn’t know how to invest $25,000, we’re exploring your options in this “Financially Savvy Female” column. We’re chatting with Kelly Lannan, SVP of emerging customers at Fidelity, to get her advice on the topic.
Only 1 in 3 women say they know what they’d do if given $25,000 to invest in the stock market. What factors should they take into consideration to determine how to best invest this amount of money?
There are a few factors to consider before determining how to best invest.
First, ask yourself, “What am I investing for?” Are you investing for a short-term goal, like a vacation, or a long-term goal like retirement or purchasing a home? By getting a very clear understanding of your goals, it will help you make better investing choices — including the type of account to open and the investments to put into that account.
Then, make a game plan. Figure out your time horizon — how long you plan to stay invested, and your risk tolerance — how much risk you’re willing to take. This will help you decide which investments are best for you and your goals.
I’d also recommend setting up time with a financial professional to help you make these decisions. In our Women & Investing study, we asked women what their first step would be if they were given $25,000 today to invest. The top answer was to set up time with a financial professional. This is a great first step to take, as a financial professional can help identify investment options for you depending on your financial goals.
If you’re not ready to speak with a financial professional just yet, there are so many online resources that offer financial education and tools for free, like Fidelity’s Women Talk Money community, for example.
How would you recommend women invest this money?
There are a few investing best practices all women should take to improve their financial well-being.
First, make sure your financial house is in order before you start investing. This means building an emergency savings fund and paying off debt. Fidelity recommends working toward saving $1,000 first for any potential emergencies. Once you have $1,000 saved up, start working to save up to three to six months of essential expenses in case of any emergencies.
It’s also a good idea to pay off any debt. Start with the high-interest debt first to avoid paying high interest on outstanding debts.
Time is a helpful factor when it comes to investing, so younger women can consider slightly riskier investments, as they have more time to recover from potential dips in the market.
For women who are just starting out or who want to start small, remember you can invest with as little as $1! Fractional shares trading allows you to invest based on a dollar amount, so you can purchase a fraction of a share instead of the whole share — which can sometimes be a bigger investment than you might be ready to make. Due to compound interest, small amounts can build up over time, so invest whatever you’re able to, even if it’s a small amount.
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