Women can face a unique set of financial challenges throughout our lives- we statistically live longer than men, are more likely to leave the workforce to care for kids or aging parents, and on average earn less than our male counterparts. With these hurdles in mind, we can’t afford to avoid an education in investing and managing our money. Whether you’re new to investing, or want a refresher, here are three tips to help women get a jump start on managing their money:

1. Understand Compound Interest

The best way to understand why you should start investing immediately is to see how time can be crucial to growing your wealth beyond just the money you deposit in your account. This is where we first meet the power of compound interest.

The simple way to understand the enormous effect of compound interest on a portfolio is by using “the rule of 72.” The rule of 72 lets you calculate how long it would take to double your money, based on a fixed annual rate of interest— the yearly "return" on your investment.

For example, let’s say you put $5,000 into an investment that returns an average 4% per year. To use the rule, divide 72 by the rate of return, 4%. This equals 18, meaning every 18 years your $5,000 would double. Now what if you had invested the original $5,000 in a security that got an average annual return of 8%? Then your money would double even quicker— every 9 years.

What is Compound Interest?
Katie Kerpel {Copyright} Investopedia, 2019.

This isn't magic; it's compounding. The more you invest, the more you'll earn interest on. That's how compound interest can help you build wealth over time, allowing your portfolio to grow steadily over the years.

2. Diversify

Don’t put all your eggs in one basket. I know this sounds easy, but many people still don’t understand the danger of not having a diversified portfolio, and may not even realize they're making this mistake. 

A truly diversified portfolio is more than just stocks from different companies. It's even more than just stocks from different sectors. Some surprising products, brands and even industries as a whole can be correlated with each other, meaning when one goes down, it's likely they'll all go down.

ETFs and mutual funds are a good start to diversifying your portfolio, since they contain small portions of many investments, spreading out the risk. Think of it like a pie: if one slice of the pie is eaten (drops or even crashes in the stock market) you still have the rest of the pie remaining. Just remember to check the underlying securities in your funds. If they all invest in the same industries, sectors, and stocks, you're not as diversified as you think.

Remember, the right mixture of investment vehicles (stocks, bonds, ETFs, mutual funds, etc.) may be different from your friends' and family's, and that's okay. You probably have different goals, target retirement dates, and risk tolerance, so find the mix that's right for you, and keep investing!

3. Focus on the Long-Term & Don't Miss a "Sale"

One of my favorite investing quotes is from the hugely successful investor and billionaire Warren Buffett who said,

“Be fearful when others are greedy, and greedy when others are fearful.” 

Basically, stick to your long-term investment strategy when markets fluctuate. Don't let your emotions get the best of you, forcing you to sell in a panic. In fact, you can treat dips in the market as investment opportunities— buying more securities at the "discounted" lower rate.

Women of all ages and incomes should keep these three tips in mind. Start early, letting your money grow larger, faster. Stay diversified, so when some stocks in your portfolio go down, others remain stable or even grow. And lastly, don't let a rough day, week, or even month in the market rattle you. See dips as a chance to buy securities at a discount, and never abandon your long-term investment plan out of fear.

Brittney Castro is a Certified Financial Planner™, Chartered Retirement Planning Counselor, Accredited Asset Management Specialist, entrepreneur, and speaker.