Lessons I've Learned about Investing as a Woman

 

I first dipped my toes into the investing waters over 10 years ago.  I dabbled in the local stock market, and bought a few shares in some companies. But at the time I really did not know what I was doing! 

I kept selling off my shares and then buying others, because I did not understand how to harness the stock market to help me grow my finances.

  As a woman, I know for fact that there is a lot that holds us back when it comes to investing.  One big challenge many women face is the belief that they aren't as good as men when it comes to making business or investment decisions.

As women, we’re conditioned to believe that business and investing are men’s turf. It’s even worse if we didn’t study finance or grow up around investment conversations. That mindset keeps many of us from even trying.

 And yet, according to the World Economic Forum, women overall make better investors!

 In 2021 during one of the COVID-19 lockdowns I took a course with Kenyan financial education group Centonomy.  That course really shifted things for me! I learnt exactly what it means to be intentional about your finances, and specifically how to invest.

 Since then I have gradually built my small portfolio, investing in the Ugandan stock market as well as in government securities (treasury bills and bonds).

 Here are a few lessons I have learnt along the way:

 

1 1. Education is everything

And I mean everything!! For me to fully understand money and how to manage it and grow it, it took paying for and completing the Centonomy course.  But I did not stop there, to this day I read books and listen to podcasts on personal finance. (I  have written about some of the books I have found really helpful.)  By so doing I have learnt investment strategy (yes you need a strategy, don’t just approach it blindly), and how to avoid being scammed.

  Ladies, educate yourself. Be that person who questions things; don’t just jump blindly into investing in things you do not understand.

 For instance, unit trusts are all the rage now in Uganda. Listen, unit trusts are legit investments and the licensed players are well known. That’s not the problem here. The issue is many of the people who have invested there cannot even name the base investments of these unit trusts (mostly stocks and bonds). Make it your business to learn these basics and then keep learning: it is a lifelong journey.

 The more you know, the better equipped you'll be to make informed decisions.

 2.    Stay sharp: scammers are out to get you!

We have all heard of at least one scheme or other that promises unusually high returns, usually for minimum investment. “Invest this amount and get 50% returns in two months”!

 Capital chicken  comes to mind!

 More recently one Don Chris was on TikTok mocking people he had conned of billions, and daring the Police to come get him. The nerve of that man! This wasn’t exactly an investment scheme but it just goes to show that often we do not do enough due diligence before we hand over our hard-earned money.  

 A few years back I was sucked in by one of these Ponzi schemes. I do not even remember the name but a friend told me about it. The long and short of it is that they asked us to share our bank account numbers for us to get paid.  I don’t even know what it is we were investing in, in order to get paid.

 Lucky for me, my tendency to be sceptical kicked  back in and I decided I would rather open a new account than hand over my existing account details. Three days later, the owner of said scheme was arrested in Fort Portal.

 After that experience, I became super alert; the person who will successfully con me of my money has not yet been born!

 PS. All investment schemes in Uganda are regulated by the Capital Markets Authority  (CMA). So if that “hot new investment” you hear about is not listed as regulated by the CMA, run!

 

 3.    Understand what you’re putting your money into

Scammers will usually attempt to confuse you by offering very attractive returns for your investments. But you need to proceed with caution. For instance, many of these Ponzi schemes will promise to give you 10% per month. This amounts to 120% return per year!

Ask yourself, how exactly are they generating this return?  The average rate of return for treasury bonds is about 15%. If the government is giving you 15% on bonds annually, and global stock markets are returning on average 10%, who exactly is this person that’s giving you a 120% return?

    

 4. Forget waiting for the "perfect" moment to invest

      Money loves speed!  Unless someone is born rich most people start small and build themselves up gradually. I know you might think you have too little money to even start. But investing a small amount regularly is so worthwhile!

 One of the biggest lessons I have learnt about starting small is that it builds within you a healthy habit of deliberately saving and setting aside money for investments. And when it comes to money, discipline and, management is more important than the amount.

 World over, lottery winners almost always lose all their earnings within months: their problem is not the money, it is always the lack of discipline and healthy money habits to manage that money.

 If you learn to set aside money, control your spending, and regularly invest a portion of your income, these good habits will stay with you for years.

5.     Leave your investments alone!

Investment is like watching paint dry, in the words of one of my favourite personal finance experts Ramit Sethi. There’s nothing exciting about it, you simply do it slowly, consistently.

You cannot invest in January and expect to quit your job and live off your dividends and interest income by December. Stay invested for the long term!

Instead of buying and selling my shares off I have learnt to leave them alone and benefit from dividend income and capital gains.

 6.     You are enough

This is perhaps the most important lesson. I have learned that I did not need anyone’s permission to get started, I just needed to find the right resources. And they exist. Centonomy, the course that got me started, was created by a woman.

 

So while barriers still exist for women in the finance space, if we choose to we can rise above them and set ourselves on the path to investing, learning and growing.

 

 If you’d like support with starting your investment journey,  send me a 📩 message:

 miss.songa@gmail.com