Today’s women have more earning potential than women of previous generations. With this comes the ability to save more. While it’s important to save, if you ignore investing, you may find yourself unprepared to meet long-term goals. That’s because investment products offer opportunities for you to seek a better return on your money, which you may be losing out on if you’re just holding cash in a savings account. However, when investing, you may need to endure some risk, including the possibility of losing some or all of your money in any investment.

But are women investing? According to our 2014-2015 study, “Financial Experiences & Behaviors Among Women,” most women understand checking and savings accounts very or somewhat well, but only 38 percent understand mutual funds and 31 percent annuities very or somewhat well. Our study also revealed that even though many women don’t feel they have a grasp on investing, they are not seeking the help of financial professionals in great numbers. Only 31 percent of women use a financial professional, down from 48 percent in 2008, but women who work with a financial professional report feeling much more confident about their finances than those who do not.

Before you start investing, it’s important to understand the difference between saving and investing and to create a plan.

What’s the Difference?

Saving is the act of setting aside money for emergencies and short-term goals, such as buying a house. Your top concern is that your money will be available when you need it. Accordingly, savings is generally held in accounts that are low risk and readily accessible, such as an FDIC-insured bank savings account or certificates of deposit.


Investing is buying a product you expect to appreciate in value, such as a stock, bond or mutual fund, so that your wealth may grow over time. The target is usually a long-term goal, such as retirement savings or your child’s college tuition. Your top concern is how much your money will earn on top of the principal you contribute. When investing, you’ll need to balance the expected earnings against your appetite for risk.

How to Start Investing

After you’ve created an emergency savings fund (financial professionals generally recommend that you set aside three to six months of living expenses), consider opening an investment account to save for future goals. Here are some tips to help you get started:


  • Define your objectives. Deciding how to invest your money will depend upon your personal circumstances, including your investment goals, time horizon and tolerance for risk.
  • Set goals and plans to reach those goals. Make a list of your goals, such as paying down debt, saving for your children’s college education, or saving for retirement. Then, create a plan to start reaching those goals. For example, set a budget, a payment plan to pay down debt or a 529 college savings plan to save for your child’s education, or enroll in your company’s 401(k).
  • Diversify your investments. All investing carries risk, but putting all your eggs in one basket is particularly dangerous. Instead of buying one stock or bond, consider spreading your money among various investments. Especially for beginning investors, an easy way to diversify is by purchasing shares in a diversified managed mutual fund—an investment vehicle run by a professional manager. Diversification can’t guarantee that your investments won’t suffer if the market drops. But it can improve the chances that you won’t lose money, or that if you do, it won’t be as much as if you weren’t diversified.
  • Get help. If you’re not comfortable investing on your own, a financial professional can help you build a portfolio aligned with your goals and risk tolerance.
  • Get started now. Every day you wait to start investing is one more day that you’re not giving your money a chance to compound in value.


It is possible to lose money by investing in securities. There are inherent risks involved and there are no guarantees that your investment objectives will be achieved.

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This is a sponsored post by Prudential.