Why Mom Entrepreneurs Need to Learn to Invest

christina empedoclesGuest post: Christina Empedocles, CFP® is the founder of Insight Personal Finance, a boutique financial planning firm dedicated to teaching other women how to invest. Here, she writes about why it’s crucial that women should learn to invest.

Editor’s Note: A version of this article first appeared on insightpersonalfinance.com.



I know you have a ton going on, and you’re busy running a business and taking care of your family — but this can’t wait. I need to make sure you understand how important it is to get yourself into a position where you can be regularly saving and investing for the long-term. Here are a few facts we all know, but may not have considered together:

  1. On average women live 5 years longer than men.
  2. Women are paid 17% less than men for equivalent work.
  3. Along with the pay gap, women make “less than men because they shoulder more of the family burden,” [New York Times]
  4. 50% of marriages end in divorce.

I could get lost in the details of each one of these points — but when you put them together, it all adds up to a giant, red-flashing warning sign saying that not only do we women need to save more but those savings need to be invested for long-term growth to protect us when we’re old and flying solo.

We need to be competent and educated when it comes to the topic of money in our families because whether our marriages stay together or not, we’re likely to outlive our spouses. Eventually, we’ll be making important financial decisions on our own. Or, if we’re in same sex marriages, we’ll have two longer lives to save for. The way I see it, our future health, happiness, and well-being depend on our financial savvy now.

Women need more money because they live longer, but statistically, they make less. Simple math would conclude that to account for these two opposing factors, women need to save more vigilantly. Furthermore, they need to grow those savings more effectively than men who generally earn more, die younger, and often benefit from having their spouses as caretakers in their final years.

This is not news to most of us, so what are we waiting for?

women are great investors

There’s knowing, and then there’s doing

Knowing is only half the battle — we also need to be in the right frame of mind to absorb the information, recognize how it may affect our lives, and make the decision to act on our own behalf. And if we’re not mentally ready, we’re not going to do it.

I recently attended a lecture on behavioral finance by Dr. Sonya Britt, a professor at Kansas State University, who opened my eyes to something that now seems incredibly obvious. She explained that there are distinct psychological stages we go through before we can take positive action to change our behavior:

Stages of Change
Reference: https://en.wikipedia.org/wiki/Transtheoretical_model

Being given information that suggests how beneficial saving and investing is, won’t magically transport you from ‘pre-contemplation’ to the ‘action’ stage. Instead, you need to climb through each stage yourself, allowing your perspective to evolve to the point that you’re ready for ‘action’.

I spent years wondering why, when faced with the facts, people didn’t stop what they were doing and immediately go open a Roth IRA, or recognize that the damage of credit card debt far exceeds the benefits of excessive spending. But now I understand that when it comes to money, some of us reached the ‘action’ and ‘maintenance’ stages years ago — and not everyone is there yet. If a sensible option is staring you in the face while you’re still ‘pre-contemplating’, you’ll likely look right through it — no matter how much sense it makes.

BUT HERE’S THE GOOD NEWS: You can learn to invest

I’ve seen people move from ‘contemplation’ to ‘preparation’ and then onto ‘action’ with rapid recognition and powerful results — not because they’ve been given a magical formula — but because taking action suddenly makes sense and no longer seems so intimidating. The anxiety of ‘precontemplation’ fog fades, and the path forward becomes a clear set of steps to take, one foot in front of the other.


Of course, this isn’t a competition. I want you to understand that not only is this doable, but if you learn to invest, it could be one of your strengths. Dr. Terrance Odean, a professor at Berkeley’s Haas School of Business, found a pattern of excessive trading in men’s investing style which added up to a 1% reduction in annual returns when compared with women. The irony of his study is that the unsuccessful behavior in men was attributed to an overactive overconfidence. Conversely, women’s more successful buy-and-hold style stemmed from a lesser sense of confidence!

Founding Moms, even if you don’t realize it, we’ve got the disposition to be great investors! And 1% might not seem like much right now. However, this amount compounded over years will have a huge effect on retirement assets, and is an enormous penalty for bad habits.

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As mothers and business owners, the world rests on our capable shoulders. Carving out the time and attention to learn to invest is inconvenient. But unfortunately, that doesn’t mean the above statistics won’t apply. Having been through a divorce myself, and seeing my work and career interrupted and radically changed by the birth of my daughter — I know all too well how easy it is to become derailed in your ability to earn and save.

But one of the tools I had during those transition times was my investment portfolio. I established it with money I had set aside in my twenties that I thought was too little to matter. In my time of need, that handful of dollars had grown and swooped in like a hero to see me through the rough patches.

women learn to invest 3

So many benefits!

To me, my investments provide safety and strength and choice, even though I try never to touch them. Just knowing they’re working away in the background is comfort enough. That’s why I want to help as many women as possible develop the confidence to invest and grow their own resources.

And there’s one more reason: Investments returns are gender blind, and there’s no pay gap in compound interest. If you want to know what it feels like to earn like a man — learn to invest. 


How long do you want to ‘pre-contemplate’, ‘contemplate’, and ‘prepare’? These are legitimate phases of our journey but they can come at an expensive opportunity cost. When you’re not productively moving forward, it’s possible you could be digging a deeper hole. Later, you’ll need to make more of an effort to backfill.

Investing is a way to take the money you’ve already earned and give it a job in the future. Then, when I can’t or don’t want to show up at work anymore, I’ll be glad to have an army of previously-worked hours put in over a lifetime, that will pick up the slack.

women learn to invest 4

So how about you? At what age are you going to start taking care of your future self and learn to invest? Founding Moms, no matter what stage you’re at, I am committed to helping you get to ‘Action’. I created a downloadable workbook Game Your Brain Through the Stages of Change to get you started.



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