Although it’s becoming far more common for women to invest in the stock market, private equity opportunities, ETF funds and property, the average woman invests far less than the average man. To discover some of the key factors that explain this difference, simply continue reading. You may be surprised to find out why men typically invest more than women.
Why do women invest less than men?
Women often earn less than their male counterparts:
In many industries, women have not yet reached pay equity with their male counterparts and it’s not uncommon for women to get paid lower salaries than their male colleagues. While individual women may sign fair contracts to receive the same pay rate as their male colleagues, the average woman still earns approximately 19% less than their male colleagues. As a result, women often have less disposable income to invest in building a diversified investment.
One reason why women may earn less than their male counterparts is that their managers may have ingrained gender biases and may automatically offer female employees lower salaries than male employees. Another reason why women may earn less than their male counterparts is that women are less likely to request a raise.
Many high-paid industries and positions are still dominated by men:
Unfortunately, many high-paid industries and roles are dominated by men and are difficult for women to break into due to outdated gender stereotypes. As a key example, the vast majority of CEOs in the world are men and there are usually more men in leadership positions than women. While a large number of men gravitate towards high-paid leadership positions, many female-dominated industries offer lower salaries. For instance, women who work as teachers or nurses earn far less than men who work as executives or engineers.
For this reason, it’s important for traditionally male-dominated industries to welcome women into their community. As more women pursue lucrative careers in traditionally male-dominated industries, more women will take home higher incomes which they can then use to invest towards their futures.
Some women choose to put their careers on hold in order to raise their families:
Another reason why women typically invest less than men is that it’s still fairly common for women to give up their careers to raise their families. Women who choose to give up their jobs to look after their children become reliant on their partner’s salary and generally do not have their own funds to invest. Some women choose to take only one year off work for when they give birth, but still lose out on tens of thousands of dollars that they could have invested.
Women aren’t encouraged to take control of their financial futures:
Sadly, many women are not raised to take care of their finances and as a result may not have the financial literacy or confidence that they need to start investing. At the same time, many women may feel uncomfortable about attending investing events such as shareholder meetings. Overall, there are still low numbers of women that attend investing events. However, in recent years, these numbers have slowly increased as younger generations of women are becoming more open to the idea of creating their own investment portfolios.
Women often put other peoples’ interests ahead of their own needs:
While men are raised to put their own interests first, many women are raised to put others’ needs ahead of their own. This is why women often spend a large percentage of their salaries on their partners, parents, friends and children. However, these women need to remember that the best way to help those that they care about is to put their interests first. As an example, a woman who has a diversified investment portfolio that appreciates in value and brings in monthly passive income will be in a better financial position to look after their loved ones than a woman who has no assets to her name.
So if you were curious as to why men invest far more than women on average, hopefully you now understand some of the key factors that discourage women from becoming active investors. Fortunately, due to social changes, it’s highly likely that the number of female investors will continue to increase over time since women are becoming increasingly aware of the importance of taking control of their finances.