As my friend and investor Ruth Ann Harnisch sagely shared at a dinner I hosted in 2016, “Finance is the final frontier of feminism.”
Her statement was in response to a question I asked, which has been plaguing me for years: Why don’t women invest?
Conversations around the social tenets of equality have been at the forefront of feminism for as long as I can remember, and those around political equality have recently neared a fever pitch. But economic equality? Not so much.
According to a study by Merrill Lynch, 61% of women say they’d rather discuss details about their own death than talk about their money. Forty-one percent said their biggest financial regret was not investing more.
Meanwhile, a study from BlackRock found that 68% of noninvesting women thought their future would look better if they did invest. This feels all the more incongruous, given that although women invest less, they are better at it.
A deeper dive into the research and recent conversations with friends unearthed a variety of perspectives on why women are reticent. Chief among them: the feeling that engaging with and becoming educated about your finances is just one more thing to do when women are already drowning in responsibilities and carrying an unequal share of the mental load.
Thanks to the wage gap, we also have less money, which is especially disconcerting when you consider much longer we live, how much higher our health care costs are, and how much more we need to save to achieve parity with our male counterparts. It’s likely this is why women tend to focus only on saving money, and—though it’s an important part of being financially successful—investing is perhaps the most essential ingredient in building long-term wealth.
Investing doesn’t have to be risky, you don’t have to go it alone, and, believe it or not, it’s likely you have enough money to start now. There is a multitude of people, institutions, and platforms with the kinds of financial products and services that will support the amount of money you’d like to invest and the level of risk you are willing to take.
What’s more, they won’t require any more of your time than what it takes to understand your goals and requirements. Investing isn’t gambling, nor is it only for the rich. It’s a tool for sustainably growing your money and building your wealth. It’s a way to turn a little bit of money into a lot of money over time.
This article from the investment platform Ellevest shows what could happen if someone were to save (in an account with low interest) versus invest $25 a month for 40 years. The difference is around $15,000. When you consider that women keep 71% of their assets in cash, it’s easy to see how quickly and massively the contrast can affect a woman’s financial future.
The benefits of investing can also extend beyond growing your personal wealth: You can also invest in companies and leaders that align with your values. Public equities—like an index fund that uses environmental, social, and governance (ESG) factors to pick its investments—are a great option for new investors with less to spend and lower risk thresholds.
Conversely, private equities can be an excellent fit for investors with a greater amount of capital to invest and a higher risk tolerance. For example, you can make direct investments into early-stage companies as an angel investor or a limited partner in a venture capital fund. At The Helm, for instance, we invest in women-founded and women-led companies, which are proven to result in a higher social and financial return.
The reality that you can both make money and do good is an especially important point for women to understand as they are, historically, much more inclined to donate their money than to invest it. Impact investing (and in our case, gender-lens investing) is an ideal complement to charitable giving, allowing women to have the best of both worlds.
The most important thing is to start today. There is zero benefit to waiting. You can use a robo-adviser like Betterment, a certified financial planner, or a book on investing to get the ball rolling.
In the same way that women are spending their time crusading for equal sexual and reproductive rights and helping get more women elected, we must also fight for our economic rights. When women have more money, they have more power. Is there a greater threat to the patriarchy than that?
Lindsey Taylor Wood is founder and CEO of The Helm.