"My biggest advice to women who want to save more money is to make more money," saidfinancial expert Nicole Lapin, the winner of GOBankingRates.com's 2015 Best Money Expert competition. "When you stop looking at your financial life as something of deprivation and more of something as aspiration, that's when you actually feel comfortable of taking control of your own finances."
Making more money is typically easier said than done -- but it doesn't have to be. If you're a woman who wants to increase her cash flow or save more money for retirement, try your hand at investing.Sure, investing in the stock market does come with risks, but it's a surefire way to start taking charge of the money you make.
So if you're afraid of investing your hard-earned cash in stocks, bonds and mutual funds, don't be. Here are 10 investment tips for women who want to become better investors.
1. Educate yourself about investing basics
Men and women demonstrate differingconfidence levelswhen it comes to investing. A 2013 Merrill Lynch report found that of 11,500 Merrill clients and prospective clients surveyed, about 55% of women agreed or strongly agreed that "I know less than the average investor about financial markets and investing in general."
By contrast, only about 27% of men answered the same way.
One excellent way for women to gain confidence is by taking action to improve their investment knowledge. Women must commit to replace fear with the self-assurance that comes with learning more about investing.
2. Sign up for a workplace retirement plan
Saul M. Simon, a certified financial planner with Simon Financial Group in Edison, N.J.,recommends women investors start investing at work in their 401(k) or 403(b) retirement plans. Every dollar that goes into these plans reduces current income taxes. In addition, the money grows tax-deferred, and in many cases the employer matches a portion of your investment.
Don't let lack of confidence stop you from keeping a healthy portion of your investments in stock funds. Choose a target date fund or low-fee index funds.
By recognizing and overcoming your financial insecurity, you can avoid the common money pitfall of investing too conservatively.
3. Get investing education at work
Many workplaces offer investing education seminars, usually in relation to the company's 401(k) plan. Consider attending the next time your company hosts such an educational event.
The lessons you learn might help you invest better, both within your company retirement plan and in other parts of your financial life. For example, they might help you learn about the value of investing in index funds.
4. Don't get emotional when investing
Ben Offit, a certified financial planner with Clear Path Advisory in Pikesville, Md.,gave this simple yet powerful advice: "Do not get emotional.When the market is up, know that at some point it will come back down.When the market is down, it will go back up.Just stay in for the long term."
Understand that part of investing is knowing that stock and bond funds go up and down in value. Over time, you will learn to better handle market volatility and not be tempted to panic and sell at an inopportune time.
5.Do research before making your first investment
With thousands of mutual funds and individual stocks, it can be challenging to choose a few funds for your new investment portfolio. Linda P. Jones, a wealth mentor and host of the "Be Wealthy and Smart" podcast,understands how scary it is to make that initial investment.
When she first began investing, Jones chose a sector mutual fund -- an undiversified pool of stocks related to a particular market segment such as energy,healthcare, retail, or technology.
After investing, her sector fund immediately dropped 30%, slashing her initial investment by close to one-third. Fortunately, Jones recouped her losses and went on to experience financial success in her investing.
Before you make your first investment, make sure you do your research and seek out trustworthy investment tips. Jones suggested getting a financial newspaper or magazine that has an edition that discusses the top no-load -- or "no commission" -- mutual funds.
Next, she recommended starting your investing by purchasing an S&P 500 index mutual fund or exchange-traded fund (ETF) that invests in the 500 largest U.S. companies. This gets the new female investor started with a well-diversified investment of established company stocks.
6. Set an asset allocation you can live with
Take a risk-tolerance quiz to figure out how much risk you can stomach. Stocks offer higher returns with greater risk. To reduce your risk, put some money into bonds and cash, which are less volatile.
Once you know your risk tolerance level, invest accordingly. For example, if you are a moderately conservative investor with 20 years until retirement, you might start out with 60% to 65% of your investments in stock mutual funds. The rest of your money can then go into bonds and cash.
Marilyn Plum is regional director ofEP Wealth Advisors,which has offices in California and Colorado. She suggested that focusing on both strategy and your own risk tolerance level can keep your portfolio in balance, take the emotion out of investing and help you stay the course.
7. Work with a professional
A 2015Fidelity surveyfound that 92% of women wanted to learn more about financial planning. In addition to DIY learning, women might find a financial advisor to be a welcome partner in the financial education process.
There are several facts to consider that can help you choose the right financial advisor. For example, it is important to understand a planner's fee structure. Discount brokers might give you basic investment management help for free if you open an account. Other advisors charge by the hour, or as a percent of assets under management.
Be mindful of those advisors who make money only when you buy or sell a fund or security. These commission-based advisors might have a conflict of interest.
8. Consider a robo-advisor
Women who want investing advice can lower their costs if they try a robo-advisor service. Such services are the latest innovation in the financial advisory field. Theylargely remove the human element and instead rely on sophisticated computerized investment algorithms to offer investment advice at an affordable price.
Companies such as Betterment, Wealthfront, SigFig, TradeKing, Vanguard Personal Advisor Services and many more provide investors with excellent, low-fee robo-advisor investment options.
9. Start investing today and stay the course
The length of time you keep money invested is among the biggest predictors of investment success. Imagine you had an S&P 500 index investment account worth $1,425 in 2000. Here is how the value of your investment would have grown over the next 15 years:
If you panicked after a couple of years of losses and sold your investment in 2002, you would have lost a large portion of the original $1,425. But, if you were patient and held on for the entire 15-year period -- including throughout the financial crisis -- your initial investment would have more than doubled.
This illustrates how important it is to stay the course when investing.
10. Counteract your own biases
A 2015 Fidelity Investments surveyof more than 1,500 women investors found a lack of confidence when it comes to managing their money. Just 47% of the women surveyed were confident discussing money and investing topics on their own with a financial advisor.
There was a striking disconnect between investing and normal household money management. Although 82% of women confidently manage their day-to-day budgeting, only 28% believe they can correctly choose financial investments.
Women need to understand their own fears and biases and to work to counteract them. Women investors can use data to counteract their financial fears and biases.
In fact, looking at actual data is one of the best ways to counteract the fear of investing. For example, are you afraid to invest in stocks because you remember the painful declines of the financial crisis? Well, in spite of the 36.55% plunge in the S&P 500 stock market index in 2008, this index gained an average of 7.25% annually between 2006 and 2015.
By contrast, a cash investment averaged a return of just 1.14% annually between 2006 and 2015.
Newwomen investors should not allow fear to keep them from investing in the stock and bond markets. Your future self depends upon taking a few reasonable risks now to shore up your retirement nest egg for your golden years.
This article originally appeared at GoBankingRates.
The article 10 Tips for Women to Start Investing originally appeared on Fool.com.
Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright 1995 - 2016 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.