Why Is It That More Women Don’t Invest?
Why Is It That More Women Don’t Invest? A friend asked this question. “After all,” he said, “study after study shows that women are better investors than men, so why don’t they invest more?”
While the answer is most likely different for every woman, here are three possible reasons I shared with him:
1. They have less to invest. The gender pay gap is real. According to a 2020 Pew Research analysis, women still earn just 84 percent of what men earn and that percent is even lower for women of color.
Many women also have more responsibilities, including a disproportionate share of child care and caregiving duties that impacts their careers and their earning power. Plus, debt is sometimes an issue. For example, women hold about two thirds of the $1.5 trillion in student loan debt in this country.
2. They are more likely to be weighed down limiting beliefs regarding wealth. It’s no secret that one of the best ways to achieve wealth is by investing but if you believe (consciously or subconsciously) that wealthy people are greedy, that money is the root of all evil, or that investing is unfeminine, investing may not be a priority in your life. It might be just the opposite.
In a recent article by Sallie Krawcheck, the CEO of Ellevest, she says that wealth comes with lots of emotional baggage beyond its simple definition of what you own minus what you owe. She quotes Gloria Steinem as saying, “One thing “wealth” hasn’t been: Feminine. Quite the opposite. For so long, in our society, it’s been viewed as attractive, feminine, even adorable to be bad with money.” And, she adds that in order to move forward, we have to change the connotations of the word “wealth.”
According to Ms. Krawcheck, if we can take back the word “wealth” for ourselves and work towards building wealth, we can initiate a cascading set of changes, such as owning the choices we make in our lives – all while increasing our wealth, which itself makes more choices available to us.
3. Lack of education. Most of us have never had any training (formal or informal) in investing so it’s more of a trial-and-error thing for many people, or they do what I did and they let someone else manage it for them. The problem in both cases is if you don’t understand the basics, you can find yourself losing money and valuable time. That happened to me because I didn’t understand what to do. I relied on someone else to do it for me, and as a result, I lost both time and money.
Never forget that it’s your money and you will have to live with the consequences (good or bad). So, even if you get help, be proactively involved and don’t say yes to something you don’t fully understand. If you don’t know the basics, learn them. Ask questions. Get answers. Your future could literally depend on it.
SOAPBOX MOMENT: All of this might sound like a woe is me moment – an excuse for women to throw up their hands and give up. But that’s not I’m advocating. I’m pointing these issues out here because it’s time to recognize that if things are ever going to get better, it will be because we make them better. Despite the odds, we can change our circumstances and investing can be a game changer. And, no. It’s not too late to learn or to get started.
I’m interested in your thoughts and comments. Let me know what you think.
FYI: Want help? I’m considering teaching a basic class on investing – something like “Successful Investing Made Easy.” Hey, investing is not rocket science, and yes it can be easy, and you can be good at it. If this is something that would be of interest to you, CLICK HERE to email me and put the word “Yes” in the subject line. If I move forward with the class, I’ll send you info.
Peace, power & prosperity!
