Engaging in conversations about money and investment is critical for women in today’s capitalist economic system. We mustn’t shy away from discussing finances, as avoiding these discussions can lead to significant consequences. Each woman’s financial journey is unique, yet a common thread emerges, many struggle financially because their money isn’t working as hard as they do. Money represents power, opportunity, and security, making it essential to shift our focus from merely earning income to building wealth.
Earning money primarily fulfills immediate needs, but building wealth requires money management skills to grow that income for financial security. This growth allows us to gain control over our lifestyles on our own terms. Unfortunately, many women are battling negative net worth as debts increase, often living without a financial cushion. Despite appearances, driving nice cars and living in beautiful homes many are spending their income without allowing it to grow. For those without debt but with cash sitting in the bank, the challenges of inflation and cost of living become significant. If your money doesn’t grow at the same rate as inflation, you risk losing purchasing power over time. Both scenarios underscore a lack of true wealth.
Structural challenges, career breaks, longer lifespans, and primary caregiving responsibilities often lead to limited financial engagement, placing women in vulnerable positions. If their income disappears, they risk losing control over their desired lifestyle. For instance, a study of EU data revealed that male retirees receive pensions 11.4% higher than their female counterparts. Without proactive investment, women risk poverty in later life. Although investing and business have traditionally been male dominated, numerous studies show that women often outperform men in investment. So the misconception that women lack interest in investing overlooks the reality that many are simply pressed for time because of their busy schedules.
As expectations for women continue to rise, and life can sometimes take unexpected turns it’s essential for women to be financially prepared. Behavioural barriers, such as focusing solely on savings instead of wealth building strategies, can be problematic, additionally, the assumption that a high salary guarantees financial security is misleading. We’re witnessing an unprecedented exodus of women from the workforce, particularly among highly educated Black women, largely due to being overlooked for promotions. This career withdrawal significantly impacts lifetime earnings, with negative repercussions that can extend to future generations.
To embark on our wealth journey, we must first shift our mindset. Money is deeply intertwined with emotions shaped by various factors, including upbringing, cultural beliefs, societal attitudes, and personal experiences. It’s essential for women to understand the power of a positive money mindset. Financial literacy stands as a cornerstone for ensuring women’s future well-being, along with seeking financial services tailored to female investors. Investing early and making rational decisions rather than emotional ones are vital for building confidence in our financial future. Support networks, such as membership communities designed for women, encourage the long overdue conversations about money we’re all so desperate to have.
Research indicates that women are more likely than men to reinvest their income in their families, support their children’s education, and contribute to their communities, so ultimately, we need to put more money in the hands of women.
Sarah Stephen is a Luxury Real Estate Advisor empowering women financially
