Why It’s Time to Celebrate and Elevate Women’s Economic Power

March 7, 2022

Take a moment to look at the women around you. Whether they’re reimagining how professional networks can best support women or transforming the future of women’s health, women are shaping the vibrant, equitable economy of our future.  But the truth is, we still haven’t tapped into the full financial and economic potential of women. While the gender pay gap (slowly) narrows, the gender investment gap holds strong. There are more female entrepreneurs than ever before, but they still receive fewer funding opportunities than their male peers. As much as these gaps present challenges, they also offer immense opportunities to invest in ourselves and the women around us. On this International Women’s Day, it’s time to tap into the full economic power of women. Celebrate yourself and the women around you by investing in your future. 

The greatest growth opportunity of our lifetime

There’s no question that women still face systemic challenges like unconscious bias, but there are a few patterns that are changing the game for the better.  First, women’s wages are rising. Women still make 85 cents for every dollar earned by a man, but this gender pay gap is slowly narrowing as women occupy managerial roles in higher-paying industries. As a result, women have more dollars ready to invest in their futures. Second, “the great wealth transfer” is putting dollars directly in women’s hands. Currently, women control about 1/3 of total US household wealth—amounting to over $11 trillion. As the older generation of men passes away, another $30 trillion could land in the hands of their spouses—a potential wealth transfer almost the size of the U.S.’s annual GDP. Between rising wages and the impending “great wealth transfer,” the sea of women’s economic power is about to swell. Now it’s time to decide what we can do with this financial potential. 

Informed investing will propel us forward

There’s no question that more dollars are entering women’s hands. The challenge then becomes: what do we do with those dollars?  First things first – commit to educating yourself about your financial situation and making a goals-based financial plan. Start by asking yourself:

  • What are my goals? Do you want to save for a house? Pay for a child’s education?
  • What are my assets? Think cash, investments, real estate.
  • How do my assets align with my goals?

Next up – check your advisor and yourself for unconscious bias. Is your advisor making deliberate efforts to understand your goals? Or is your advisor making simple assumptions about your needs? For example, an advisor may make an assumption that you are completely risk-averse or that your spouse is the lead decision-maker. If you spot these red flags, it might be time to speak with an advisor who will commit to understanding your goals. When checking your assumptions about your financial know-how, make a list of ideas that you have about your finances and fact-check them.  Here’s one common idea that many women tell themselves: investing is too risky. Many young women are taught to focus on saving, while young men are taught wealth-building skills. As women grow up, this can transform into strong risk-aversion. On average, women hold 70% of their wealth in cash, while men typically only hold 60% in cash. The result: men have greater opportunities to benefit from the market, while inflation takes a greater toll on women’s wealth. If we use risk sensitivity to our advantage, it can be a great asset. While men are more likely to attempt to beat the market by frequently trading and purchasing speculative stocks, women are more likely to focus on their long-term goals and hold high-quality investments. In the end, women often outperform men due to this risk-conscious approach.  Haven’t started the investment journey yet? Consider this your gentle wake-up call. Don’t sleep on the power of risk-conscious investing. 

Tap into the power of women around you with gender lens investing

As women take charge of businesses around the globe, we can support and benefit from their success with gender lens investing. Gender lens investing is an investment approach that integrates gender-diversity criteria into investment analysis, allowing us to invest in diverse teams. Because companies with gender-diverse leadership are more likely to have higher share price performance, improved risk management, and lower rates of fraud, investors are considering the value of gender lens investing. By investing in companies run by women, we can direct assets towards women-led companies while benefiting from their innovative leadership. The women around us are shaking things up for the better – so let’s get in on the action! 

Celebrate International Women’s Day by investing in your future

Women are changing the world – and fast. Let’s make sure your financial strategy is keeping pace.

Build Your Future with SWM

Singer Wealth Management