Most women are responsible for handling household expenses, including investing. As a result, they typically earn less than men do over their lifetimes. This wage gap is even more pronounced among women of color. To ensure a more secure financial future, women must develop an investing strategy that takes a long-term view. They should know when to start investing, as well as what kind of money they can afford to lose.
Saving for retirement is another important part of financial planning, as women tend to live longer than men. But life expectancies are not fixed, so women need to be proactive in planning for their long-term needs. While savings can provide partial relief for a few years, strategic investments can ensure that their golden years are comfortable. For example, a unit-linked insurance plan can provide financial coverage and attractive returns.
Women’s financial health is improving, with one recent study showing that nearly one in five women felt more confident about money matters. The recent explosion of high-profile female leadership roles in Wall Street may also have encouraged more women to get involved in investments. In February, Jane Fraser became the first woman CEO of a major Wall Street bank, and there have been a number of large female-led hedge funds launched since.
In the United States, women have traditionally had more difficulty accessing the financial markets than men. The Equal Credit Opportunity Act, passed in 1974, made it possible for women to invest without their husbands. Today, women control more than $10 trillion in financial assets, and the number of female investors is expected to increase in the next decade.
There are many advantages for women investing. Female investors are more willing to take risks. Contrary to popular belief, women are more likely than men to diversify their portfolios to ensure that they achieve greater returns. Women who invest are also more willing to diversify their investments to avoid focusing their assets in one asset category. Some women even prefer to invest in alternative asset classes, such as clean energy, sustainable foods, women-owned small businesses, and femtech.
The biggest barrier to investing for women is a lack of money. However, this can be a symptom of larger systemic challenges facing women, such as low pay and the financial burden of raising young children. A recent BNY study shows that if women had the same investment habits as men, they would have over $32 trillion in global financial assets by 2022.
Many of our female clients have built and led companies, bringing their leadership skills and lessons learned from their careers to their investing. As a result, they catalyze changes within companies and industries. They help companies meet the needs of diverse employees and the needs of women.
