Why younger women are investing earlier to secure their financial futures

Female investors in the UAE are taking financial matters into their own hands, using online trading platforms and educational material to empower their money management skills

More younger women today are investing earlier to build their net worth and achieve their financial goals. Getty

When Qadreya Al Awadhi first bought equities in the UAE, she was just 16. The Emirati made her first foray in investing with her father’s support.

In the decade since, her portfolio has grown to include US and global equities and has clocked growth of between 100 per cent and 150 per cent, depending on the stock — with the exception of a star outlier.

“I was young enough to take risks, and I was lucky that I had adults with more experience guiding me and telling me what to do,” Ms Al Awadhi says, explaining how she achieved such significant returns.

Qadreya Al Awadi, a financial services professional and owner of baby food brand Bumblebee, started investing in equities at the age of 16. Photo: Qadreya Al Awadi

Ms Al Awadhi used money saved up from her allowance and from Eid and birthday gifts for her first investment.

“I studied business in school and understood the kind of return I would get from a savings account. So, I was looking for alternatives. I obviously didn’t have enough to invest in real estate, but had enough for the stock market,” Ms Al Awadhi says.

She chose equities because of a weekly tradition of watching movies with her father that began in high school. When she was in her senior year of school, she says, they watched his favourite movie, Wall Street.

“That movie was one of the main reasons that motivated me to invest and start early,” Ms Al Awadhi recalls.

Not only were local stocks affordable, but she also knew several adults who were investing in them at the time and she could learn from them, she says.

While her first investment has been a long-term success, she has had her share of ups and downs, particularly in international markets.

At the outset, Ms Al Awadhi based her decisions on classic investment ratios such as earnings per share and price to earnings. Now, as a financial services professional and the owner of baby food brand Bumblebee, she has learnt to look deeper, reading and analysing the financials of a target company, its industry, peers and the overall market.

“Since then, I have seen very little loss on my portfolio; at worst, I just break even,” she says.

Overall, her guiding principle is to invest in companies that have a higher chance of being around in 20 years.

Ms Al Awadhi represents a new class of women in the UAE and elsewhere who are investing earlier than ever before.

On average, women aged 18 to 35 now say they began using a broker account at 21, compared with 30 for older women, according to a February survey by financial services company Fidelity Investments.

The findings were drawn from its 2022 Money Moves Study, which interviewed 2,015 adults in the US who own an investment account other than a current or savings account.

“We are amid a major shift where more women are talking about money and investing — it is getting less and less taboo, especially among this younger generation,” says Lorna Kapusta, head of women investors and customer engagement with Fidelity Investments.

“More female influencers are sharing their financial experiences and tips on social media; more circles of women are talking money and goals with their friends.”

About 35 per cent of women in the younger age group say they began their investment journey with a small amount of money, often as little as $1, to build their confidence and get comfortable.

Rather than wealth building, more younger women (43 per cent) are investing to achieve a personal goal compared with 34 per cent of women over the age of 36. Such goals include paying for important family events, using money to make a difference or leaving a legacy.

Meanwhile, Rachael Abraham’s ambition is to retire within another 15 years at the latest, by the time she’s in her 40s. “I invest with a view to attain financial freedom,” she says.

Ms Abraham, 28, is the co-founder and chief executive at 1&O, a creative IT services agency based in India with clients in the UAE.

She began investing at the age of 21 to secure her retirement income after her older brother explained concepts such as the time value of money and compound interest with the use of an online retirement calculator.

Rachael Abraham, co-founder and chief executive of creative IT services agency 1&O, began investing at the age of 21 to secure her retirement income. Photo: Rachael Abraham

“I saw the amount of money one must save to retire comfortably. That amount scared me and it only increases with age, which proves the importance of starting early,” the entrepreneur and former Dubai resident says.

“Using the retirement calculator was an eye opener. My brother forced me to start putting money aside but once I did, I wanted to keep investing. It is amazing seeing your money grow.”

Now, Ms Abraham principally invests in the stock market, directly and through mutual funds, with about 25 per cent of her investments in fixed deposits, including automated bank deposits.

She bases her decisions on discussions with family, advice from investment professionals, online educational material and videos, as well as her own due diligence.

A growing awareness of financial issues and widespread access to internet-based digital platforms has helped women to educate themselves about finance and make their own investment decisions, experts say.

“We are seeing more younger women start to think about financial planning and investing. Much of this is attributable to an increased emphasis on financial education at a younger age, as well as targeting women specifically,” says Jessica Robinson, founder and managing director of female-focused investment company Moxie Future.

“There are now numerous investment clubs and financial education platforms that women can access, made so much easier with the shift to online delivery.”

Jessica Robinson, founder and managing director of female-focused investment company Moxie Future, says more younger women are starting to think about financial planning and investing. Photo: Jessica Robinson

“FinTech is also playing a role — with the rise of investment apps, it is getting far easier for younger women to start investing. For sure, tech is democratising the investment landscape,” she says.

Do-it-yourself trading platform eToro recently found that 47 per cent of 9,500 women investors polled in a February survey only began their investment journey two years ago — after the onset of the pandemic. The same platform reported a 366 per cent rise in the number of new women investors using its services in 2020.

And last month, roboadvisory platform StashAway said in a report that female users now make up 40 per cent of its new client base in the Middle East, compared with 16 per cent at the time of its November 2020 launch.

In Singapore, the platform took five years to reach gender parity, from 17 per cent of female investors at its 2017 launch.

The platform runs StashAway Academy, offering personal finance and investing courses across its network in the Middle East and South-East Asia. Since launch, more than 16,000 women worldwide have joined StashAway Academy and another 1,500 have followed its masterclass She Invests.

The UAE-based Crunchmoms, the first and only private network in the Middle East that supports women at all stages of their career and motherhood, hosts a range of events and community activities focused on financial education and angel investment information.

Crunchmoms member Rebecca Moreira, 32, is head of investor relations at Glenwood Equity, a commercial real estate investment company focused on multifamily apartment complexes in the US.

The British-American made her first investment five years ago at the age of 27 because she had reached a financial milestone.

Rebecca Moreira, a member of Crunchmoms and head of investor relations at Glenwood Equity, made her first investment five years ago at the age of 27 because she had reached a financial milestone. Photo: Rebecca Moreira

“At the time, I knew I had to deploy it or I would likely spend it if it was liquid,” she says.

With her then boyfriend (now her husband), she began investing in property and has since grown her portfolio through a series of strategic moves, such as using American tax incentives to increase her income.

“I was fortunate to start investing in 2017 while the bull run continued. Of course, I could never have predicted that success and, so far, things are in the green. My only regret is not buying more,” she says, although she admits that she has learnt a lot over the past five years.

“A good investment into a strong team is vitally important and during this journey we have made some mistakes by not acting on red flags sooner.”

Ms Moreira says young women looking to take that first step on the investment ladder should keep three aspects in mind — “education, a mentor and find your tribe”.

A financial podcast could serve as a good starting point. A mentor could be a family member or someone in the larger community whose acumen you admire.

Finally, look to meet up groups of other investors who have experience in what you want to do or online communities such as Facebook groups SimplyFI or Bogleheads.

“I believe all three components contributed to my success in real estate,” Ms Moreira says. “I know women have the capability to be successful investors [but] they simply need to begin by educating themselves.”