Have you ever asked yourself why you don’t invest? Part 1
I’ve been investing since I was in university. Don’t ask me why but it’s always interested me. So much so I made economics my field of study and have absorbed as much knowledge as I can about the market over the past 35 years.
In my last business I worked primarily in a male dominated field where talking about the stock market, sharing tips and bragging about ‘big scores’ was normal daily chatter. But every time I hung out with my female friends I noticed a distinct lack of not just conversation about investing opportunities but actual scorn if I tried too. They felt I was bragging rather than just trying to talk about something that truly interested me. To them it was soooo boring, yawns were visible.
Over the years I was focused on my business and didn’t give the different approach between the sexes to investment talk much more thought until I sold my business and decided to spend the last seven years devoted to one of my first passions, mastering the art of investing.
When I first started out I considered myself pretty ‘investment savvy’ after participating passively for over 30 years and having some good calls pay off. The reality, however, was that I knew only about 1% of what the financial markets are all about.
It was that ‘Aha’ moment that made me realize why all of my female friends never talked about investing….because if I thought I was market savvy and knew so much, they must know much less. It wasn’t because they were not interested in knowing more, it’s that they lacked the confidence…that comes from knowledge.
An interesting statistic crossed my desk some time ago that women contribute over 51% of the GDP of the USA….51%.¹ However, less than 21% invest their money and less than 5% of them feel comfortable investing it themselves.²
Let’s compare this with men. 74% of men invest in the stock market and 59% of those prefer to manage their investments themselves.³ So I had to ask myself….why is there such a lack of confidence throughout the female economy to invest? Which motivated me to do a survey among my female friends.
Turns out the answer is obvious yet complicated at the same time. Almost all of my friends said the primary reasons the don’t invest are because they lack the confidence, knowledge base and time to manage it. Now I don’t mean a few said they lacked confidence primarily, others knowledge and still others the time. I mean that 80% of respondents answered all three in the same order.
I couldn’t help but think that this was completely weird.
Then even stranger responses were observed. Almost everyone surveyed said they were really interested in learning how to invest….but they had to be motivated.??? I couldn’t understand how they wanted to learn but had to be motivated to learn? Especially about something so incredibly important to their own future, financial security.
So I started researching and found out some interesting nuggets along the way. Did you know that the vast majority of women were not ‘allowed’, legally, to open their own bank accounts without a male guarantor until 1970???⁴ I mean, I’m sure Gloria Steinem did but I sure didn’t.
The majority of places where ‘money’ was discussed up until the mid 1980’s was in ‘male only’ social clubs. The kind of ‘old boys clubs’ where you see cigar rooms and the ‘who’s who’ rubbing shoulders. Historically, men took over the role of ‘managing the family’s assets’ in the 1400’s.⁵ Up until then women were considered equals in the financial world and the management of it.
How did we get to the point where we finally earned the rights to earn our way in this world but yet we appear to unanimously give our hard earned money over to someone else to manage? Someone who is primarily male in a primarily male dominated industry….one that I dub ‘the last boys club’.
Is it truly generational behaviour? Learned through our rearing? Is it the Grimm’s Brothers fault writing all this nonsense about waiting for Prince Charming and being ‘saved’ drilled into our heads since we are born?
Or is it the last vestiges of the patriarchal culture still quietly at work through banks that advertise ‘worry free investing’, the desperate need for a ‘financial advisor to guide you to sound financial decision making’ (because you obviously cannot do that yourself)?. The glaring absence of any kind of financial education throughout secondary school? The rise of ‘roboadvisors’ to take any decision making capacity away from us except for the level of ‘risk’ we would like to take. (Incidentally, women take on much less risk when investing than their male counterparts and prefer to invest in real estate than stocks)
Another interesting little nugget, women who do invest, are better investors than men. Numerous studies have demonstrated that women outperform men in total annual returns by 1–2% a year.⁶ But you never hear much about that truth, do you?
I read recently that ‘Finance is the final frontier of feminism’. I love this line and I have to wonder if it has always been the only frontier for feminism. It’s one thing to talk about civil liberties but we earned our right to control our money over 50 years ago and still the vast majority of women refuse to take advantage of this basic right that would give us the opportunity to control the majority of the American economy.
The Golden Rule comes to mind: ‘He who makes the gold makes the rules’⁷
If women took the bull by the horns, (the pun is intended;) a lot of things happening in the world right now would be very different in my humble opinion. Which leads us back to my question….Have you ever really asked yourself why you don’t invest???
Authors Note: This is Part 1 of an ongoing informal research study I am conducting. I’d love your input, questions, answers, opinions and suppositions of why women have been sitting on the investment sidelines as long as we have and what it will take to get us to start playing ball. You can comment here, on twitter or LinkedIn. I’d love to hear from you! And if you want to learn more about investing, trading and developing a strong money mindset you can join my micro courses on Instagram or go to my website and sign up for all sorts of educational freebies! www.xonomist.io