Why Women Must Invest!
We recently attended FINCON, a financial conference for personal finance and investing influencers. There they had a talk about women in financial leadership and discussed how the financial world continues to be predominately male.
This means that even though about 47% of U.S. workers are female, not enough information about finance and investments are written by females.
Why is this a problem?
One reason is that women are living longer than men and thus spending more of their years in retirement. Investment advisors are mostly men, but women may have different needs, especially if they are going to need more money for retirement.
Men’s salaries are also still higher, even those within the same field and position as women. Men’s salaries also peak later on in life around age 55, where women’s salaries peak around age 40.
This is an important factor when investing because 10% of income contributions towards retirement will look different over time depending on current salary. If men make more than women, even if women invest the same amount, they will still have less money than men for retirement which again is an issue since women are living longer (about 3-5 years).
Research suggests women may get paid less because of gender biases. A recent study by Harvard Business Review discussed the biases between genders in the finance world and found that investors were significantly more likely to take recommendations from those with male names, whom they infer are male, even though all recommenders had the same training and experience. Even men with more female sounding names were more likely to get fewer recommendations accepted. The conclusion of the study discussed how women may face unfair assessments in the field.
Ellevest is an investment company for women that focuses on women’s needs as well as their income and life cycle. It is the first company to take women’s needs into consideration when focusing on their investments.
Why should women care about income and investing?
One obvious reason is to have enough for retirement however, women also invest more of their time and money than men in charities. Women are natural caretakers and caregivers, they are also generally more empathic and altruistic and when they make more money, they take care of more people.
According to the Wall Street Journal
“We have found evidence that women give more than their male peers at virtually all income levels, even though women in general earn less and have less money in retirement than men, and have a greater life expectancy.”
Another study on women and wealth reported that
“women are nearly twice as likely as men to say that giving to charity is the most satisfying aspect of having wealth.”
Therefore when women make more, more people benefit! Money not only provides freedom, it provides opportunities to do more for oneself and others.
Oftentimes, women miss out on opportunities because they feel they are not fully prepared while men take advantage of opportunities because they believe they are prepared even when they aren’t.
At FINCON, we spent hours talking to one of the Bigger Pockets podcast hosts/real estate investor. He shared how difficult it has been to find women to be on their podcast show. He said about 9 out of 10 women they invite onto the podcast decline! Why? Because they felt they weren’t fully prepared or qualified to answer the hosts’ questions about real estate investing.
How often have you missed out on opportunities because of fear?
Is this fear holding you back from your earning potential?
If so, recognize the thoughts that are influencing this behavior and acknowledge how fighting against this fear will not only benefit you and your family but your community or others in need.