The Other Gender Wealth Gap: The Investing Gap
More and more people are talking about and bringing attention to the gender pay gap. This is fantastic and we need to keep talking about it until all women are paid equally & equitably for their work when measured against their co-working men. But there is another gender wealth gap that isn’t getting the attention it needs, which is the investing gap!
Not only are fewer women investing when compared to men, but women tend to take a more conservative approach potentially missing out on the largest gains in the market. According to BlackRock, “Only 52% of women are saving for retirement, versus 61% of men.” Within an investment account, women are more likely to hold cash or cash equivalents than men, according to a U.S. Trust analysis, and showed less intent to invest the cash. The CFA institute stated it correctly, when they said, “A greater percentage of men invest in equities than women. This represents the true retail gender investment gap. Since equities outperform all other asset classes over the long term, by not investing in these assets, women are at a disadvantage.”
So what can you do to close the investing gender gap?
Well first, get started ASAP! You know what they say… The best time to invest was ten years ago, but the second best time to get started is today! So whether it’s $10, $50, or $500 a month, set up an automatic contribution to an investment account to dip your toes in and get started. That being said, every financial situation is unique and not everyone is ready to begin investing today. Before you begin investing, make sure you’ve solidified your emergency fund and paid down high interest debt first, that way when you begin investing, you do so from a strong financial foundation.
Once you’ve gotten started yourself, be sure to share with friends and family! There is a chance your peers don’t even realize that they can and should be investing for the future, so just talking about your new brokerage account or investment strategy can trigger an important conversation! Additionally, things that seem scary are oftentimes just unfamiliar or new, so go for it! Start the conversation. Talk about investing, talk about ETFs (exchange traded funds), talk about expense ratios, and make it known that no question is a silly question. Hey, maybe you even tell your friends to join the Financial Gym, and then invest your referral bonus!
Lastly, keep learning! While an encyclopedic knowledge of the markets is not necessary to invest, understanding what you are investing in, how capital gains tax works, what the difference between a traditional and Roth IRA is are all things that will help you level up your investing strategy. Check out podcasts, blogs, books, and webinars, like our investing 101 course that answer your latest investment questions!
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