Written by: Batya Shulman, Partner at Select Investors
Get a group of women together and they can talk about anything – exercise and weight loss, food and dieting, shoes and handbags, manicures and pedicures, facials and botox, relationships and children, schools and teachers, doctors and dentists, coaches and counsellors. Read any of the many Facebook forums dedicated to women, where they are happy to share tips, give advice from their wealth of knowledge on so many different topics. Yet, there is one taboo subject that seems immune to the openness found amongst women compared to any other topic.
Unfortunately, this article is not about losing weight or the latest skincare, but the taboo topic on women and their relationship with money and investing.
Do you know that 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 – your future self will thank you.
In the early 2000’s I lived in Manhattan, New York. Just like every other female in their 20’s was obsessed with Carrie Bradshaw and the crew of Sex in the City. I religiously watched, and rewatched, every episode. However, I was constantly perturbed how Carrie never had enough money for rent and the thought of damaging her Manolos was more traumatising than being evicted from her own apartment. There was not one episode about women, money or investing – everything that represents strong financial independent women!
However, it is now 2022, and women have certainly come a long way. We have seen incredible achievements and advancements with women now as Heads of State, CEOs and board members of Fortune 500 companies and founders of some 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 5 years.
- Career breaks to have children or care for elderly – the ‘mommy penalty’ is a pay gap that is three time that of non-mothers due to lost income and missed opportunities for promotion.
- Juggling family and work – 41% of mother’s 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: (Source: 2021 studies by Fidelity and Blackrock Investor Pulse Survey)
- 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.
Have no fear, there is some positive data:
– 62% of women say they would like more knowledge, so they can make smarter financial decisions.
– Women’s investments outperform men’s by 1% annually. That is 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.
Women must face the challenges of lack of confidence, lack of knowledge, not feeling in control, and concerns about their retirement.
Given that 9 out of 10 women 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.
Women are quickly becoming the largest group of wealth owners on the planet. With an estimated USD68 trillion in wealth transfer over the next 20 years, it’s anticipated that women will soon control more than half of the world’s wealth.
So, what should women want and need?
Financial freedom and financial independence.
Surely the feeling of financial freedom is far more satisfying and liberating than buying a pair of Jimmy Choos? The ability to have control of your finances and for ultimate peace of mind that you are going to be ‘ok’ now and in the future.
A woman’s best protection is a money of her own; her own safety nest. Especially in the event of the unfortunate, when assets and bank accounts are frozen, often leaving dependent spouses with financial issues in an already challenging time.
Women want to be included in the 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.
Women 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 it is time to make this a priority! Allow yourself to become more financially literate, to have those conversations on money and investing and expand the financial conversations.
And for every man 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, equally need to become the CEOs of our financial lives.
When women are stronger financially, everyone wins.
- Studies by Fidelity, Blackrock Investor Pulse Survey and Cerulli Assocaites
To reach out and discuss your specific circumstances, please email Batya on Batya.Shulman@sjpp.asia or via phone +65 9626 8576.