overthinking investing

How to Go From Overthinking Investing to Taking Action

Over the holidays, I read a very interesting book. The title is Brave, Not Perfect, written by Reshma Saujani, the founder of the not-for-profit Girls Who Code. What really resonated about this book is the discussion of gender expectations of girls versus boys in our Western society.  How that impacts us as we grow up. It has consequences in our careers and also in our financial lives.

The comment that had me nodding was:

“We obsessively analyze, and consider and discuss every angle before making a decision, no matter how small.”

~Reshma Saujani

How many times have my friends and I done this? Perhaps you have as well. We ask ourselves, asked each other “Am I overthinking things?”

Things from how to respond to a text to a boy we like, how to follow up on an email, how to follow up on a job interview. All of these things get more than a thorough analysis. Girls overthink things not because of some kind of inherent confidence lapse but because of the way that we were trained growing up.  So argues the book.

Girls are Trained to be Perfect

Saujani cites things we often say to little girls: don’t stain your dress.  When we were little, we got beautiful little dresses and everyone said how cute we are, but don’t run in them! Don’t play in the grass in them!  Don’t get stains on them! Eat carefully so you don’t get chocolate smears all over your dress.

These are things that we expect out of girls.

Here’s an example out of my own youth.  I had terrible handwriting and I still do. But my mom would make me rewrite countless assignments.  The reason? To copy it into better handwriting. I had to present beautiful handwriting.  That it was more important than what I had to say in the assignment.

There is another arena where girls are expected to be perfect: sexuality.  Without getting too much into body politics, but when I think of the concept of a woman being able to be “ruined” because of some sexual dalliance is the emphasis for the girl to be perfect. An expectation to act perfectly all the time.

Perfection in Action

In careers, women tend to apply for jobs when they have 100% of the skills listed.  A manifestation of their felt-need of attaining perfection.  In finance, many women confess they don’t invest not because of fear or even risk-aversion, but because they don’t know enough.  Like with job applications, they were expecting themselves to understand nearly everything in investing before even attempting.

Girls are Trained to be Fearful

I remember my parents telling me:  don’t walk alone.  Don’t be out at night. This is very pragmatic advice because often young girls are subject to violence, through no fault of their own.  But generally, the tools we are given is for us to avoid those situations.

Boys aren’t given that same kind of limitation. It’s very common for teenage girls to have earlier curfews than teenage boys.  There is the perception that risk is greater for young women to be out at night than the perceptions of risk for young men.

But our protection of girls goes even further. We admonish girls: “don’t climb trees, don’t run too fast.”  We don’t want our girls to be physically hurt. We act as if girls’ bodies are somehow more delicate than their brothers’. We are taught to avoid the activities that might involve injury. We’re not taught to climb trees for fear we may fall down and get hurt.  On the other hand, boys are taught go climb that tree.  If they fall down, then they are told to face your fear and try again.

So girls are taught to avoid rather than to face things head-on.

To prove my point for the women reading: how long have you be avoiding going to see your financial advisor or sorting out your finances/retirement planning?

Girls are Trained to be Community-Oriented.

Another thing young women are taught is that we are should try our best to be part of the community. The societal expectation of women still is to be community-minded. We tend to focus on relationships.  We are encouraged to volunteer for community activities and school activities.

We hear we should fit in and don’t stand out. We are told to play nice with others. We are discouraged to be too individualist and to outshine;  except for, of course, our looks. We are expected to be part of the community that upholds certain values or norms.

Is Money Competitive or Collaborative?

When it comes to finance and a lot of money transactions and business, it’s often seen as a zero-sum game.  There’s a clear winner and there is a clear loser. One’s loss is exactly the gain of another.

As girls, we were really not encouraged or taught to play these zero-sum games like poker.  We were taught to play collaborative games. Games where there is no clear winner or loser.  Nobody goes home crying.

In that context, it doesn’t seem like money, business and finance would be in our realm.  Money is often seen as zero-sum.  Nice girls don’t engage in zero-sum games; if we want to be seen as nice girls, we should engage in collaborative games.

Girls are Trained to be Polite, Kind and Nice

Girls are very careful about managing other people’s feelings. One of the examples that the author gave was an experiment done with lemonade.  A group of young boys and girls were brought in to drink lemonade.  But the lemonade was made actually with salt, instead of sugar.  We can just imagine how horrible it might have tasted.

When asked how was the lemonade, the boys had no problem saying it was disgusting. They didn’t want to drink it, something’s wrong with it. But the majority of the girls told a little white lie: it was fine. It was, it was good. There was nothing wrong with it.

This illustrates how women are trained to manage somebody else’s feelings from a young age.  In this case, the girls were trying not to hurt the experimenter’s feelings.

When Being Nice Hurts

Now imagine in a situation involving money, a woman having her money managed by a financial advisor. This kind of early training is such a hindrance because now she’s hesitant to ask questions or display displeasure at the way the money is being managed or if they are unhappy with the returns, unhappy with the service.

In my group of friends, one had inherited a portfolio from a family member who was with a financial advisor. The financial advisor had been managing the family’s money for quite a long time. As a result, she fretted for days over hurting his feelings because she wanted to manage the money on her own.  She was afraid of hurting his feelings by essentially firing him.

From my view on the other side, I know that clients leave. It’s disappointing but we know it’s not personal. It’s just business. But for this woman, it was very personal. She felt a sense of loyalty and didn’t want to hurt this financial advisor’s feelings.  He was probably worried about his compensation rather than feeling hurt by her departure.

The Solution is Simply to Be Brave

The book outlines many ways we are encouraging our girls to be perfect and our ideal of a “perfect girl” is to be pristine, to be timid, to be community-oriented and to be nice.

This upbringing has shaped generations of women and sometimes it feels institutionalized and we get discouraged.  How to change something so big?

But Saujani advocates for a very simple solution; we should encourage girls, young women,  ourselves and our peers to not aim for perfection, but to engage in acts of bravery.

Girls again are not taught to be brave. So a lot of times we don’t know how to be brave.  We see acts of bravery to be big grand gestures.  Running into a burning building to save someone.  Standing still staring down a tank in the middle of the street.

Small Brave Acts

Sometimes small acts that lead us to be outside of our comfort zone of being not perfect is an act of bravery.  To apply for a job where we don’t need 100% of the qualifications is to be brave and not expect perfection.

Many women are afraid to manage their own money because they’re afraid of making a mistake. That is the training to be fearful. Our society also conditioned women not to manage their own money.  We expect the male figures in our lives to help us. And by help, we mean take over.  Fathers husbands, boyfriends.

But consider this, maybe that’s because we are conditioned to want to be culturally accepted and other women aren’t managing their money. We don’t see a lot of our mothers and aunts handling the investments. So, we don’t do it either. We don’t want to stand out.

Be Brave, Not Perfect

My advice to all women is don’t worry about being perfect with your money.  Just like we tell our friends to apply for that job, even if they don’t have 100% of all the qualifications. You don’t have to know everything about financial markets to just begin investing.

If we make a mistake, we learn from it and make adjustments as we go along. Just like when we are driving down the road, we make tiny adjustments along the way. Investing is similar, we start out in a direction, but we can make adjustments or even get on a different road.

Look for one small act of bravery that you can do and not expect perfection from yourself and to just start investing.

Here is a guide to help you get started.

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