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GME and AMC are not doing well today 😂
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A powerful tool I use is making an extremely simple excel model with each year until retirement representing a column and then two rows, same annual contribution rate but one row compounding at 8% vs one compounding at 1%. Obviously completely over simplified but shows the power of compounding investments over a long time at average returns
The book I Will Teach You to Be Rich has similar charts that outline everything really clearly. I recommend you have your partner read the book to gain some financial literacy. Personally I always just “knew” that contributing to a 401k was something I was “supposed to do” but the book has helped me so much and is really easy to understand.
1. Show her a historical chart of the S&P 500 that displays all the peaks and valleys for the last ~20 years. Then zoom out and show her how ultimately, it went up over time. Show her a chart displaying the returns YoY.
2. Show her what the standard rate for HYSA’s are/were pre-COVID (2%).
3. Show her this website:
https://www.calculator.net/investment-calculator.html
4. First show her what her return would be in 20 years if she contributed $XX at the HYSA rate of 2% for the next 20 years.
5. Then show her what it would look like if she contributed $XX at a modest S&P 500 rate of 6% for the next 20 years, so she can see what she’ll be missing out on if she doesn’t invest her money.
I did this to explain to my girlfriend why getting into the market is important.
Is her rationale that stocks at their current valuations are risky or stocks in general regardless of valuations are risky? If the former tell her to overweight other assets and non-US markets. If the latter, she needs a financial literacy course.
Might be a good Segway into talking about life goals. Not in an aggressive way to show you are right and your partner needs to save, but in a collaborative non judgmental way. Sit down and write down your life goals, does not need to be a soul search, talking broad strokes. Maybe her goal is to quit work in a year and travel the world who knows maybe you share that goal. Cool let’s talk about how we can save for our future and do that. Maybe she wants to travel and you want to retire early, is there a compromise? Maybe you have totally different goals, not an end to the relationship but worth a hard convo
Segue not Segway lol
My SO was like that as well. I told her look - at least get your matched contributions. You're literally leaving money on the table.
I asked her to try it for one year and see the results. It was good (obviously any single year in the last 10 years would be good)... she upped her contributions after.
Pro
I found this article pretty interesting, specifically this quote
"
So, what do women need that’s different? Advisors say—and studies support this—that when it comes to big money moves, and investing in particular, women tend to consider their decisions in the context of their overall lives, as opposed to looking at investment returns or other key numbers at face value."
So rather than show her sp500 returns or whatever data point ;talk about the growth of money in relation to your retirement and what you hope to eventually accomplish for you both.
Hope that helps
Pro
https://www.barrons.com/articles/women-still-arent-managing-their-money-whats-holding-them-back-51607119739
Everyone else has provided good sources but you need to explain that investing in broad stock index funds is actually quite low risk over the medium to long term, and it's also the only way to make sure that you're beating inflation by a decent margin--otherwise your money is barely keeping its value (if you invest in bonds) or it's actually losing value every year (if you keep it in savings accounts).
Try making your partner realize the power of financial engines. Like how daily returns can easily have more impact on your wealth building than whether you actually got up to go to work that day.
Assuming she doesn't have a specific thesis of waiting due to current market valuations (which is at least plausible), try to convince her over the next few weeks/months. If that doesn't work, get a new partner or align on the idea that you will be on charge of finances if you stay together. Sounds harsh, but if their views on or knowledge of money aren't well enough aligned with yours, it indicates future problems; money arguments are a leading cause of divorce.
Chief
A few things for her to consider:
Putting in just enough to get the match is a 100% return! You put in $1000, employer puts in $1000 and once you're fully vested, that's $2000 for you! Even if you leave when you're just 25% vested, that's still a 25% return! And you always keep market value of whatever money you put in.
You can start with pre-tax to get used to the idea. It is less of a decrease on your take-home pay because of the reduction in taxable income (you can give some estimates of take-home pay)
There is no way to save up for retirement with just cash unless you make a solid salary and live well below your means. For example, you'd have to save an average of ~$25k per year to retire on just $50k (work for 44 years, retire for 22)
Because of inflation, your money loses value if it's not invested or put to use in a way to get at least a small return. HYSAs don't have interest high enough to negate inflation.
Buy them the Simple Path to Wealth and let them figure it out on their own.
Teach her about inflation.