Women Calling the (Money) Shots
By now we are all familiar with the ‘great wealth transfer’ expected to occur between now and 2045. Over $100 trillion dollars is expected to be transferred to younger generations and about 40% of that wealth to women outliving spouses over that time period. In fact women will likely control 50-70% of the overall wealth passed down by 2045 (UBS Study). Whether you expect to be inheriting some of this wealth or building your own, it’s important to be prepared.
Another piece of good news: more women are earning college degrees. In fact, women outnumber men in terms of undergraduate attendance and graduation rates. About 60% of college undergraduates are women and about 47% of women age 25-34 completed a bachelors degree compared to 37% for men (Pew Research Center).
Yet the gender gap between women and men persists resulting in men to outearn and save more than women on average. There are many reasons for this: women often work in lower-paying jobs and industries, take time out of work to care for children and family, and even while working, take on more of the household and child-rearing responsibilities.
So while women are more educated, continue to participate in the workforce and are set to inherit a vast amount of wealth, many remain underrepresented in the market. In many cases, the real issue is not lack of confidence or knowledge but more likely to be the lack of participation in the market. Closing this gap is not just about money — it’s about power, security, and long-term freedom.
Women tend to be conservative investors, keeping more money in cash and trading less frequently than men. This is not necessarily a bad thing! In fact, over time, a balanced, steady and thoughtful approach to investing can help to achieve more favorable returns than taking on riskier positions and trading often. The goal is to participate in the market early and often as opposed to holding in cash or waiting too late to start investing.
While saving is crucial to prepare for a long retirement, investing is one of the most effective tools for building wealth over time. Savings alone rarely keep pace with inflation. By investing in stocks, mutual funds, index funds, or retirement accounts, women can grow their money through compound returns. Saving early, investing your savings and being consistent about investing can significantly impact your long-term financial stability. Note that time IN the market is more powerful than timing the market.
For example, if you invest $500 per month starting at age 25 with a 7% annual return, by the time you turn 65, you will have accumulated over $1 million—the majority of this due to compounded returns and not principle. Waiting to start saving at age 35 could cut the total in half. It is not the contributions but the compounded growth that drives wealth creation; time literally is money!
When women control more wealth, they often reinvest in families, education, communities, and businesses. Studies show women are more likely to align investments with values, including sustainable and socially responsible companies. Financial participation therefore strengthens both households and society.
Tips to adapt a saving and investing strategy:
1. Before investing in the market, make sure your emergency fund is funded so that any incidental expenses can be covered.
2. Put additional dollars towards resolving high interest debt.
3. Make sure to contribute to a retirement account. If your employer provides a match, try to contribute enough for the match and even more if you can.
4. Once you have a process for retirement saving, consider setting up a taxable brokerage account and invest in a diversified basket of stock, bond and cash.
5. Automate retirement savings and investing
Working with the right financial advisor can help women better understand their risk tolerance, clarify investment goals and align their money with long-term goals. An effective advisor will listen to clients and make sure to understand what is really important to them, what keeps them up at night and how to realistically match their dreams with a solid saving and investing philosophy.