Let’s talk about money not just earning it, but making it work for you. While men and women both strive for financial stability, when it comes to investing, women are significantly lagging. Despite having strong saving habits, women tend to invest far less than men, leading to long-term financial disparities.

This isn’t just a matter of personal preference; multiple factors influence this gap, from societal expectations to financial literacy, income inequality, and career interruptions. The consequences? A reduced ability to accumulate wealth, lower retirement savings, and greater financial insecurity later in life.

So, why does this happen? What barriers are keeping women from investing? And most importantly, what can be done to change this? Let’s break it all down and discuss actionable steps to empower women financially.

The Reality of the Investment Gap

To get a clearer picture of the problem, let’s look at the numbers:

• A study by Fidelity Investments found that women save more than men as a percentage of their income, but they are less likely to invest those savings.
• Research from UBS revealed that nearly 60% of women defer long-term financial planning to their male partners, including millennial women who grew up in a more financially independent era.
• Women, on average, retire with significantly less wealth than men, making them more vulnerable to financial struggles in old age.

A key issue here is that while saving is great, money sitting in a bank account isn’t growing its losing value due to inflation. This lack of investment means that over time, women accumulate significantly less wealth than their male counterparts, widening the financial gap.

Why Women Invest Less: Unpacking the Factors

The investment gap is not simply a result of personal choices; there are deep-rooted structural and psychological factors at play.

1. Risk Aversion and Financial Confidence

Women are often more risk-averse than men when it comes to financial decisions. Studies show that they are more likely to choose low-risk, low-return investment options or keep their money in cash rather than stocks. This cautious approach stems from a lack of confidence rather than a lack of ability. In reality, when women do invest, research shows they often achieve better returns than men due to their patient, long-term approach.

2. The Pay and Wealth Gap

It’s impossible to ignore the gender pay gap when discussing investing. Women, on average, earn less than men, which means they have less disposable income to invest. Additionally, career interruptions due to maternity leave or caregiving responsibilities further reduce their lifetime earnings and investment potential.

3. Lack of Representation in Finance and Media

Think about popular finance movies — The Wolf of Wall Street, The Big Short, Margin Call. What do they all have in common? They’re dominated by men. Women are rarely portrayed as financial experts, investors, or risk-takers in popular culture. The absence of female role models in finance makes investing seem like a ‘man’s game,’ discouraging women from participating.

If Hollywood highlighted women like Abigail Johnson (CEO of Fidelity), Cathie Wood (founder of ARK Invest), or Muriel Siebert (the first woman to own a seat on the NYSE), more women might see investing as an attainable and essential part of financial success.

4. Financial Education Gaps

Financial literacy plays a crucial role in investment participation. While personal finance education is lacking across the board, women are often less exposed to investing concepts from an early age compared to men. Many women report feeling uninformed or overwhelmed when it comes to making investment decisions, leading them to avoid it altogether.

Bridging the Gap: Steps Toward Financial Empowerment

The good news? This gap is not set in stone. With the right strategies, women can start investing with confidence and build long-term wealth. Here’s how:

1. Normalizing Investing Early On

Investment education should start young. Schools, parents, and communities should incorporate investing basics into early financial literacy programs to ensure girls grow up seeing it as a normal and essential part of money management.

2. More Women-Centered Investment Platforms

Women-focused investing platforms like Savvy Money Girl and Girls Who Invest, provide tailored resources, workshops, and support networks to make investing more accessible. By creating safe spaces where women can learn, ask questions, and grow, these initiatives help boost financial confidence.

3. Leveraging Technology and Automation

Robo-advisors, micro-investing apps, and automated investment portfolios make investing easier. Platforms like Trading 212, eToro, and Nutmeg allow women to start with small amounts and gradually build their portfolios without feeling overwhelmed by complex financial jargon.

4. Representation and Role Models

More visibility of female investors, CEOs, and financial leaders in media and education can shift the narrative. By showcasing women who have successfully navigated the investing world, we can inspire others to take charge of their financial future.

5. Community and Mentorship

Women thrive in supportive environments. Investing clubs, mentorship programs, and financial workshops specifically designed for women can create a sense of community and encouragement, making the investment world feel less intimidating.

Conclusion: Rewriting the Financial Future for Women

The investment gap isn’t just about money. It’s about security, freedom, and the ability to live on your terms. Women already possess the skills needed to be great investors, such as discipline, patience, and long-term thinking. The challenge is breaking down the barriers that have kept them from participating in wealth-building at the same rate as men.

By increasing financial education, promoting female representation in investing, and leveraging technology, we can close this gap and ensure that women are just as financially empowered as their male counterparts.

To every woman reading this: Don’t wait. Start now. Your future self will thank you.