Get a group of females together and they can talk about anything from pedicures to politics to travelling solo around Peru. Read any of the many Facebook forums dedicated to women, where they are happy to share tips, and you’ll find a wealth of knowledge on myriad different topics. Yet, there is one subject females tend to shy away from in comparison to others – their relationship with money and investing.
Indeed, according to research 61% of women would rather talk about death than money yet recent research shows women’s # 1 financial regret is not investing more money.
The title of this article was supposed to be called ‘Women and Wealth’, but I knew to capture the reader’s attention, the word ‘wealth’ would need to be omitted. Now I have your attention, please do read on.
Financially independent
In the early 2000’s I lived in Manhattan, New York. Just like every other female in their 20’s, I was obsessed with Carrie Bradshaw and Sex in the City. I watched and rewatched every episode, and with every episode I was constantly perturbed over how Carrie never had enough money for rent. The thought of her damaging her Manolos was more traumatising than being evicted from her own apartment! Not one episode was about women, money or investing – everything that represents strong financially independent women!
In 2022 women have certainly come a long way. We have seen incredible achievements and advancements with women who now hold roles as Heads of State, CEOs, board members of Fortune 500 companies and founders of highly successful start-ups. Yet women still face many challenges including:
- Gender pay gap – women on average earn 23% less than men
- Longevity – women on average outlive men by five years
- Career breaks – to have children or care for elderly. The ‘mummy penalty’ is a pay gap three times that of non-mothers due to lost income and missed opportunities for promotion
- Juggling family and work – 41% of mothers vs 20% of fathers says that being a working parent has made it harder to advance in their careers
Due to the recent pandemic, women are leaving the labour force (and seeing a reduction in income) at a greater rate than men. Now let’s look at some key statistics:
- 72% of women don’t feel confident about selecting investments on their own
- 67% of women feel misunderstood by their financial adviser
- 63% of women don’t feel knowledgeable they can plan for their retirement
- 60% of women worry about not having enough money to last through their retirement
- Only 12% of women are “very confident” in their ability to retire fully with a comfortable lifestyle
- 57% of women feel financial terminology is confusing and makes it more difficult to make decisions
- 38% of women describe themselves as in ‘control’ for their financial future compared to 55% of men
- Financial concerns are among the most common sources of disagreement for couples
Don’t worry, there is some positive data:
- 62% of women say they would like more financial knowledge, so they can make smarter financial decisions
- Women’s investments outperform men’s by 1% annually. Impressive for a demographic of which only 28% feel confident in making investing decisions
- Women are better savers, saving on average 8.3% of salaries while men save on average 7.9% of their salaries.
And so it appears that women must face the challenges of lack of confidence, lack of knowledge, not feeling in control, and concerns about their retirement.
Financial freedom
Given that 9 out of 10 females will be the sole decision-maker at some point in their lives, it is critical that women arm themselves with the knowledge and confidence to take control of their financial wellbeing.
With an estimated USD68 trillion in wealth transfer over the next 20 years, women are quickly becoming the largest group of wealth owners on the planet, and it’s anticipated that we will soon control more than half of the world’s wealth.
Right now, a woman’s best protection is money of her own; her own safety nest. Especially in the unfortunate event of assets and bank accounts being frozen, often leaving dependent spouses with financial issues in an already challenging time.
Women must be included in the wealth conversation – minus the jargon, fancy technical terms and references to ‘pinkwashing’. Women certainly don’t want a ‘women’s bond’ when it comes to money and investing. We want to be treated as equals with trust, personal connections, the opportunity to ask questions, to be listened to, and to feel safe.
So, for every woman reading this article, financial independence is a necessity, and where possible, should be made a priority. Allow yourself to become more financially literate, to have conversations about money and investing and expand the financial dialogue.
And for every male reading this, you have the responsibility to be a financial advocate, to be inclusive and encourage your spouse, mother, sister, daughter or colleague to take greater charge. We all need to become the CEOs of our financial lives equally.
When women are stronger financially, everyone wins.
Batya Shulman is a Partner at Select Investors. To discuss your specific financial circumstances contact her at Batya.Shulman@sjpp.asia or phone +65 9626 8576.
(Statistics source: 2021 studies by Fidelity and Blackrock Investor Pulse Survey)
