Aysha van de Paer: Women should strive for financial security
Let’s start: What would you like to tell us about yourself?
I am originally Swiss and grew up in the French part of Switzerland (in spite of my very ‘unswiss’ name!). I spent over a decade working in private equity and real estate investing for established investment and consulting firms around the world.
In the last 15 years or so, I worked and studied in the likes of New York, Dubai, Amsterdam, the UK, San Francisco, and Zurich.
In early 2017, I lost my husband Karl in a road accident while we were expecting our second child. Now I am a single mother of two boys aged seven and two. The new financial reality that followed my husband’s accident inspired me to start a blog on investing for women.
The idea is to help women get over their fears and start investing for building financial security over time in a way that feels right. My articles take a woman's perspective and are easy to understand, and (I hope!) are quite entertaining.
How did your relationship with money and investing evolve?
I always liked the idea of earning money and investing it, which is why I made my first investment in my early teenage years.
And I did what most people do when they want to start investing. I went to my local bank, received some advice from the bank’s staff, and invested my money in one of their high-cost and under-performing investment fund. And like most beginners, I freaked out when I saw the stock market declined and hurried to sell my investments at a loss.
At that time, I decided that the stock market was not for me and later chose to embark on a career in real estate investing. I liked the tangible and long term value building nature of real estate. I still do.
When I was living in New York, I decided to start investing in the stock market again because it was easier to get started than investing in real estate. My husband was helping me with selecting investments. And these investments did well.
But somehow, that didn’t feel right.
I wanted to be able to invest by myself in companies that I believed in, rather than in the financial companies that my husband was recommending. This is why when we moved back to Switzerland five years ago, I decided to invest CHF 20,000 in companies of my choosing. And by doing so, I made all the mistakes in the book!
But somehow, investing cold-turkey style ignited my passion for investing. So I kept investing and experimenting. I also started reading and researching extensively about this topic to understand what works and what does not.
(Actually, here is a list of recommended books about investing that are easy to read and also quite fun ;-)
Then, something changed when the unthinkable happened, and my husband suddenly passed away in a traffic accident. I started thinking about investing as the (only) way I could achieve financial security over the long run.
And in addition to that, I have become fascinated by ethical investing. This is a topic that I want to cover in great detail in my blog going forward. Because investing for the good of the planet and society is the right thing to do. And I also firmly believe that ethical investing will provide better returns over time.
What has been your own most significant financial learning so far?
My most significant learning is that even when you do everything ‘right’, it is not enough to achieve financial security. And that even in a place like Switzerland.
Let’s look at my story as an example.
I have never been a big spender, and I like to save money. I studied very hard and earned both a bachelor degree and a master degree at reputable universities. I chose a field of work that pays well. And I always worked very hard; regularly staying late in the office before I had children.
Then I got married to my college boyfriend after ten years of relationship. He had also studied and had an excellent job in the financial industry. He was earning a great deal of money.
Against all the odds, I managed to keep my career and my income going over the years. And that was no easy feat! Because keeping at it when moving to different countries for my husband's career and after having children was quite a challenge.
All the above meant that my husband and I had what you would typically call an excellent financial situation. It almost looks like the perfect financial scenario. And yet somehow, a terrible and unforeseen event happened that jeopardized my financial security and that of my children.
Because the cost of living in Switzerland for a single woman with two young children is just crazy high. And the survivor benefits that we get are limited for several reasons.
That is why the most significant learning for me is that investing is not just a way to make some more money. Instead, it is something that we all need to do over the decades to achieve financial security for ourselves and our loved ones.
And of course, what happened to me, fortunately, does not occur to most women. But there are countless reasons (at least 12) why a majority of women face financial security difficulties, especially later in life. And investing is how we can best prepare ourselves (and our loved ones) for rainy financial days ahead.
Money & emotions are always connected. What is the main fear or panic that keeps women from starting to invest in your opinion?
The primary issue is the fear of losing money.
Many people have early experiences with investing that did not go well. Or we have heard of many stories of people losing money with their investments. Or maybe it’s just that our family and friends strongly advise us against investing saying it’s too risky.
And sure enough, investing the usual ways, by either investing in expensive funds from the established banks or by actively trading without a strategy, is a good way to have low or negative performance.
But when we look at what one study on investing after the other reveal, we get to understand that investing when done well is not as risky as we think.
Quite the contrary.
Simply put, when you continuously invest for the long term (think 10 years or ideally longer) in highly diversified low-cost investment funds (think Exchange Traded Funds/ETFs), then the risks of losing money are pretty slim.
While the potential gains over time, ideally 20 or 30 years or even better 40 years, are truly worth it.
And one of my favorite ways to do that is with an online robo-advisor such as Selma Finance.
Other emotional issues often prevent women from investing. Issues like a lack of trust in the financial sector, not knowing where to start, or when women feel they lack the knowledge or capabilities to invest well. These are all topics I like to cover in my blog.
What’s the change in mindset that has to happen for more women to become excited about investing and working on their financial freedom?
Many women think that money is not something important. Or that they don’t need money to be happy.
There is also this cultural idea that talking about money is a bad thing. And that people who want to have more money are selfish and unkind. And to be successful at investing, we need to change our mindset as follows:
Money is not something that is ‘bad’ and just for greedy people, who want to live the high life and look down at the people who have less than them. Instead, it’s a precious tool to achieve financial security for ourselves and our loved ones.
Money is not something that we should grow only for our own benefit. Because when we are fortunate enough to have a good income, we have a responsibility to use that money for the greater good. That means investing it in companies that contribute to preserving our planet and advancing the issues that are close to our hearts, such as gender equality.
We also need to shift from thinking that we should focus on earning and saving money to be financially secure. Because when we only save money, we gradually lose part of it each year due to inflation (not to mention bank fees!). On the contrary, investing over the long term is how we can grow our money and achieve financial security over time.
Where can companies and investment providers start to make investing more accessible – especially for women and new investors?
There are several ways that companies can help to make investing more accessible. And it all revolves around education and providing independent information. For example, companies can organize events about money and investing. The objective should be to talk openly about issues such as:
Why is it important to invest?
What are the time-tested principles to follow to create wealth?
Practical tips on how to get started
Such events within companies can take different forms, including short presentations, full-day workshops, or offering external training possibilities to employees.
But there is a trick.
The idea is to provide independent information so that women and new investors can begin investing in a way that is most beneficial to them. And companies will not achieve this by asking the big banks or big insurance companies to provide that information and speak at their events.
Because these financial institutions are not in the business of educating people about financial literacy. They are in the business of selling their expensive investment and insurance products.
And because investing at a low cost is one of the fundamental principles of successful investing, the investment solutions provided by these organizations is usually not the right solution for beginner investors.
And that's why I am increasingly speaking at events such as the event organized by Selma Finance on September 19th in Zurich.
And I am not the only one. There is a growing number of unaffiliated speakers who talk openly about money and investing to raise awareness of the importance of financial literacy.
What do you recommend women as their first step when getting started with investing?
There are three steps I would recommend.
1. Get to know the basics
First, educate yourself about the basics of investing so that you can build the knowledge and confidence you need to get started. I created a FREE Email Course to help with that.
2. Start investing with an online advisor
Second, open an account with an online robo-advisor, which offers a sustainability portfolio, such as Selma Finance. And I am not saying that just because you are interviewing me! An online robo-advisor is probably the best and easiest way to get started for beginners. And it is also a great way to invest for more advanced investors who want to invest at a low cost without having much to do.
3. Invest DYI-style, if you want
Then, there are other good investment options that you can also consider, depending on your situation, including how much time you are willing to spend on educating yourself and managing your investments.
By the way, I will soon launch a course on how to invest ethically with Exchange Traded Funds (ETFs). This course will be an excellent resource for someone who wants to understand what ETFs are about, which ones to select, how to access them, etc. The course will also cover online robo-advisors, because they do a great job in allowing people to invest in ETFs.
Last question: What are the top financial (or investing) tips you’d like our readers to take away from this interview?
If the only thing you got from this interview is that you should start to invest as early in life as possible, it would be worth it.
In fact, as one of my favorite authors, Andrew Hallam, writes in his book, Millionaire Expat:
It’s not timing the market that counts. It’s time in the market.
Because waiting for years to start investing is what we generally do wrong.
Even I started later than I should have.
And that is why you should join us for the Ladies Drink & Invest event on the 19th of September in Zurich! 😊