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When I started The Money Whisperer, I decided I didn’t want to write just for women because money matters are relevant to everyone. We are a modern household and I see everything from household expenses through to investment choices as decisions we are both involved in.
For me, money is genderless.
However, since immersing myself in the world of money blogging, it has become increasingly obvious that, in general, there are significant gender stereotypes in the world of money and finance.
Are you thrifty or an investor?
Of the blogs that I follow, the majority of people who write about household savings and thrifty ways to save are women. The majority of people who write about investing and financial independence are men. Why is that?
The media at large definitely plays a huge role in how each sex identifies with money. In a study of 300 articles performed by Starling Bank they uncovered huge discrepancies in the way that men and women are spoken to about money.
‘65% of money articles in women’s magazines define women as excessive spenders and 90% of money articles aimed at women suggest spending less.’ These articles advise women to limit, restrict and take better control of shopping ‘splurges’, and they’re then encouraged to maximise their economic contributions through forms of thrift like saving small sums, earning small amounts, or finding a means of financial support, like a parent. Or a husband.
In articles aimed at men, 70% emphasise that making money is a masculine ideal. They suggest monetary success and financial literacy are essential to enhancing personal status and getting ahead of colleagues or peers. 73% of money articles aimed at men focus on investing.
It’s this last one that is my real bug bear. Why shouldn’t men and women be targeted equally around investing? Hell, we need money as much as the next guy, and as women live longer than men, we definitely need it more in old-age!
Stop the stereotyping!
The more I talk to people, the more I realise that not all women are the stereotype that the media would have them portrayed as. However, it is obvious that many women don’t have the same confidence as men when it comes to making financial decisions.
In particular, women are reluctant investors. As the Financial Times noted recently, investing money in the stock market is not a complicated process, but it requires making decisions.
Men aren’t any more educated in taking these types of decisions — they rarely fully understand what they’re doing. The difference is that women want to understand but get bogged down in all the jargon. And it’s often enough to put them off dipping their toes in.
Women are proven to be better investors
When they do invest, women are shown to be better at investing than men. Yes, that’s right! There are a few key reasons why:
- We associate investing with meaningful goals. Women tend to think much more holistically about the reason for their investments. We build our investment portfolios around life goals – such as buying a house or retirement – rather than focusing on the ‘men’s game’ of trying to beat the market.
- We don’t fiddle. Women are naturally more patient and generally place fewer trades; men are 35% more likely to make trades than women. Trading fees eat in to their portfolio gains. Women tend to ride out cycles and practice a long term, buy and hold strategy more conscientiously than men.
- We manage risk better. This is not saying women are more risk averse than men, but rather women are more likely to pick investments that are appropriate for their age and time horizon.
Investing is a long term game. All these small reasons why our portfolios perform better are compounded over time to produce even better long-term results.
Investing: a woman’s perspective
53% of British women describe themselves as uncomfortable with investments. A further 32% are neutral or “don’t knows”. If I can encourage more women to at least consider investing as a long-term alternative to cash savings, it would mean a lot to me.
With this in mind, I will be showcasing ordinary women who invest over the coming weeks through a series called ‘Investing : a women’s perspective’. There are no bankers or investment pros in there, just regular people who want to create a secure future for themselves and importantly, for those that they care for too. If I can encourage people to learn to invest for themselves then hopefully they will also invest for their children.
I’ve also got some posts coming up on investing for beginners, details of information evenings for new investors and some great online courses aimed at people new to investing. I hope that you enjoy it!
Here are the links to the profiles in the series:
Please do let me know either in the comments or by email to [email protected] if you are a reluctant investor and what information would be useful to help you be more confident to start investing.