We have a gender pay gap, a retirement gap, a property investment gap. All in all, there’s already a lot contributing to the wealth gap between women and men (not to mention the gap that exists when you bring in ethnicity and other factors.)
But there’s another piece of the puzzle when it comes to women & wealth: confidence.
Research has shown that confidence plays a key role in maintaining the financial gap between men and women. And we’re not just talking about the confidence required to ask for a pay rise – but rather a perceived lack of capability when it comes to managing their finances and investing.
But Women are actually better investors than men!
And there’s plenty of research to support this statement. A 2021 study by Fidelity shows that women outperformed men by 0.4%. And another by the Warwick Business School showed women outperformed men by 1.8% when investing. Those percentage points may seem small, but it can add up significantly over time.
Why is this? Well, women (in general) make very different investment decisions to men. Women tend to invest in shares that have a proven track record when it comes to returns, and we tend to invest for the long term. They’re not drawn to ‘quick wins’ and speculative stocks like the guys are.
So, how can we capitalise on this?
Get more women investing!
Investing is a powerful tool that can help you grow your wealth and go some way to closing that gender wealth gap. Investment generally provides a higher return on your savings than a traditional savings account would – and this compounds over time leading to even greater returns.
So, what are some of the keys to getting this investing business right?
Start as soon as possible
The earlier you start, the more time your investments have to grow. Even if you think you might have left it too late, don’t let this be a deterrent. There is still the opportunity to earn returns from investments which can support you with extra money to enjoy during your retirement – the investment option you go for might just be different than if you had a little more time.
Diversification helps reduce the risk of your investment by spreading it across a variety of asset classes, businesses and industries. This way, if the stock prices drop in one company, your overall portfolio is less likely to be significantly impacted.
Diversification also helps you take advantage of the growth opportunities of a variety of sectors, and the stability of others.
And diversification isn’t just for stocks and shares – adding a property to your investment portfolio is also a form of diversification. And property is a great investment option if you need to close a larger retirement gap or are shorter on time.
Why should we want to?
Investing more isn’t just about sticking it to the men and being on par with them – though this could feel rather satisfying. It’s about taking control and making sure that our money is supporting you to do the things you want to do – now and in the future.
If making some smart decisions around your money means you can ensure your kids can get a great education, you can take that trip of a lifetime, or you can retire in the style you’d like to (and retire at the time you want to) taking some time now to make some of those smart investment decisions is what will help get you there.
While taking the first step can be daunting, there are plenty of resources available online to help you get started – and just getting started (even if it’s small) can be a great way to build up your confidence. But, if you prefer some more personalised advice, talking to a financial adviser can provide valuable guidance in determining the best investment steps for your specific situation and selecting the right investment option for you to grow your wealth and secure the financial future you deserve.
If you’re keen to talk to an enable.me financial adviser (or coach as we like to call them) then during the month of March we’re offering new clients a discount on their initial consultation. You’ll pay just $249 (reduced from $400) for a 90-minute session with an enable.me coach in which they’ll take stock of your current financial situation, uncover opportunities to improve it, and recommend a plan to help you achieve your financial goals. Book now.
Disclaimer: This blog post is for informational purposes only and does not constitute individual financial advice. If you’re interested in receiving personalised financial advice, you can book a consultation with an enable.me coach. Costs apply.