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3 Things to Consider Before You Start Investing

A Black person in a red dress and long Black hair sits at a coffee shop with a mug on one side and an open tablet.
Photo by Docusign via Unsplash

Have you been hearing about the importance of having multiple streams of income and wondering how to add one to your portfolio?

Are you thinking about investing—but you’re unsure how?

Do you want to make more money without having to do more work?

If you answered “yes” to all of the above, you’re not alone. Many women in accounting are already juggling their day-to-day responsibilities at their firm or while running their own business, taking care of their children, and handling more than one side-hustle. There’s no time to add anything else to that! But, it’s important to have more than one stream of income (ideally, you’d aim for seven).

One way to make money without having to add anything to your calendar seems a bit scary at first: investing.

With investing, you can create multiple streams of income by doing what you’re already doing. No need to study for a certification, build another business, write a book—nothing!

But, it’s daunting. What if you do something wrong and lose a bunch of money? What if you don’t have enough to invest? What company should you invest in?

It seems like there’s a lot that can go wrong. But according to CPA, best-selling author, and Founder of Wealthy Women Daily, Charlene Rhinehart, investing is as easy as shopping at the mall! Or maybe, shopping online, for modern times.

A headshot of Charlene Rhinehart in a yellow blazer and black shirt underneath. She is smiling and looking at the camera.
Charlene Rhinehart is a 3x best-selling author, the Editor-in-Chief of The Dividend InvestHER, and has over 15 years of experience in accounting and finance.

Over the summer, we had the chance to sit down with Charlene to talk all about her tips and tricks for women in accounting on how to invest wisely. First and foremost, she says that you need to know one thing: you don’t have to have thousands of dollars to invest!

Repeat that a few times out loud. Got it? Good!

Now, there are 3 things you need to start thinking about before you even start investing:

  1. Know your net worth

  2. Get comfortable saving

  3. Learn about investing

To make sure you’re not just investing, but investing wisely, take each of these elements of your investing future into consideration before you start.

Know your net worth

As women in finance, you probably already know what we’re talking about here, but let’s just go over this really quickly.

  • Net income: how much money you make every year

  • Net worth: how much money you’re keeping every year

It’s important to distinguish between these two because when you’re evaluating the kinds of companies you want to invest in, you need to evaluate their financial characteristics. Remember, we’re investing wisely. And making a wise investment includes doing your research before making a move.

Part of this research includes not just the companies you’re considering, but yourself. That’s right: before you start investing, you also need to understand yourself.

A close up of hands writing down in a journal. There is a cup of Starbucks coffee next to the journal.
That's right: take out your pen and paper, because it's time to take some notes. Photo by Alexa Williams via Unsplash

So, what is your net worth?

These are your assets: cash, bonds, savings, properties, etc.

Once you’re done listing your assets, you need to review your liabilities. This is your student loan debt, your credit card debt, your mortgage debt, etc.

When you’ve got everything ready, you can calculate your net worth by adding up those assets and subtracting your liabilities.

It’s important to know your net worth because this will help inform how much you can invest. What looks realistic for you? How much are you trying to make? What are your limitations?

Get comfortable saving

We’re going to repeat this louder now: save your money!

Even as women in accounting, we can struggle with saving a portion of our income—especially after spending almost an entire year mostly indoors.

But saving your money isn’t being cheap or frugal: instead, Charlene says it’s called keeping your money! And if you want to keep more of your money, you’re going to have to save it.

To start saving your money, create a savings fund for expenses that you have coming up through the year. Once you start developing your savings fund, you can calculate your savings rate.

Why evaluate the rate that you’re saving at?

Because you might think you’re saving a lot, but after doing the math, you realize that you’re only saving 10% of your total income. If you’re spending 90% of your money and saving 10% of it, does that sound like a lot to you?

A closeup of a person in a yellow sweater sitting at a wooden desk and typing at a laptop.
It may seem like overkill, but doing a weekly calculation of how much you're saving won't just keep you on track, but will increase your momentum towards becoming a wise investor. Photo by Christin Hume via Unsplash

Now, you may only be able to afford a 10% savings rate—and that’s ok! Your savings rate will need to be informed by your expenses: what kind of job do you have? Are you single? Do you have kids? Are you making a steady income?

But, Charlene’s recommendation is to calculate and increase your savings rate over time. This means that you’ll either have to increase your income or decrease your expenses.

The calculation itself is simple. Make a weekly habit of taking the money you make a week and divide it by the amount you’re saving per week.

For example, let’s say you make $1,000 a week and save $100 a week.

100/1,000=10% savings rate

On the road to financial freedom, what’s important for women in finance to take into account is that you want to increase the gap between what you make and what you spend. Charlene says that when you have more to save, you have more to invest; and when you have more to invest, you can dig into those high-quality stocks and dividends that are available.

Learn how investing works

Don’t invest in something that you don’t know anything about! Take some time to learn what you’re about to dive into. You want to know the answer to questions like:

What is the stock market? What kinds of companies are out there to invest in? How do I make money from the stock market?

A person wearing glasses and a burgundy cardigan stares at their open laptop while biting their pencil in frustration. There is a cup of more pencils next to them.
Don't get frustrated! Learning about investing can be confusing at first, but with time and dedication, you'll get the hang of it. Photo by JESHOOTS.COM via Unsplash

For now, here are some basics.

First and foremost, there are two different ways to make money from the stock market: capital appreciation and dividend payments.

Capital appreciation is when the price of a stock goes up and you make money. For example, the price of Company X’s stock goes from $12 to $20, you make $8 per share. This is capital appreciation.

Dividend payments are when companies pay you for investing in them. Those dividends are a “reward” for investing in the company.

A little more about dividend payments: let’s say you invest for 10, 20 years into a company and then decide you don’t want to anymore. You can still get those dividends as long as the company declares them. That means you’re not punished if you’re no longer giving the company any more money and you can qualify for an automatic pay raise.

What is an automatic pay raise?

This is when a company increases their dividends every year, which is called dividend growth.

When you invest in a dividend growth company, you can get more money from dividend payments without adding more money to your account. So, you get an automatic pay raise!

There are tons more to learn out there. Charlene covers it all in her book, Dividends Are A Queen’s Best Friend, which condenses all of this valuable information for your financial education in just 90 pages and gets you started fast!


It’s important to know what’s out there. Especially as Black women in accounting, who still make less than 1% of CPAs in the United States, it’s of the essence to know how to build wealth and not just invest, but invest wisely.

A hand holding $100 bills.
This could be you. Ready? Photo by Jp Valery via Unsplash

And why would you invest if you don’t know anything about investing?

As Charlene says, there are so many different sectors, tax considerations, and more to take into account before making an investment decision based on what your friend said or what you saw trending on Twitter.

You need to be an informed investor. You never know what you hear or what you learn that could lead to an investment that makes you a lifetime of wealth.

So, take these three steps and start your journey! Are you ready to invest in 2021?


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