My dear Friends,

it is more than 140 years since women‘s financial emancipation started in France. Today women are successful businesswomen and politicians in many economies around the globe. They hold leadership positions and are trailblazers in all sorts of things.

Women account for 43% of HNWI and are a growing economic force. Most of them can be called financially “savvy, yet only 33% are active investors.

A Morgan Stanley study found that underinvestment remains a problem for female wealth owners despite corporate and board-level progress.

Having fought so hard for independence, women should not relinquish the most crucial element – their financial independence.

So, more women must become veritable “CEOs” of their finances by becoming more successful investors.

From “incapable adult” to “unassisted woman.”

until the late 19th century were labelled as “incapable adults” and could not manage their financial affairs alone. Therefore it was a male guardian, be it a husband, brother, or any other man, who had full and only control over a woman´s fortune.

France became a trailblazer for women’s financial independence. In 1895 a law was passed that a woman could make deposits or withdrawals without her husband’s approval. The “incapable adult” becomes the “not assisted by a husband” woman. This mention was, in fact, affixed to saving accounts opened by unmarried women.

WWI changed a lot in Europe for women, as they had to manage daily life without men. As a result, women could demonstrate that they could simultaneously be caregivers, “CEOs of the family”, and financial decision-makers. A more significant change, however, did not come until the late 1960s. In Europe and the US, married women were granted the right to open a bank account or go to work without a husband’s consent.

However, financial advisors and researchers overlooked women as investors. The industry viewed them either as a monolithic group or a niche. In fact, many financial professionals viewed women investors as less financially confident, less sophisticated and more risk averse.

As a result, many women became underinvested or under-planned, with negative financial consequences compounding over time.

Not so successful

According to a survey of 2,000 people, when asked how they would invest £1,000, more women than men said they would save it. The same survey also revealed that just 29% of female respondents have traded or invested in stocks and shares compared to 47% of men. When asked why they were not interested, 58% of female respondents said they thought it was too risky, and 52% said they felt they did not know enough about investing.

According to research by BNY Mellon, only one in ten women globally felt they fully understood investing, while just 28% of women felt confident about investing their money. An eye-watering 45% of women viewed the stock market as too risky for them. These are some of the causes of the huge investment gap.

The onset of the COVID-19 pandemic may have unwittingly helped to close the gender investing gap. As more people were confined to their homes, DIY trading could have presented a possible way to supplement income and kill time.

The good news is that while female investors are, on average, less active traders and investors, data shows that when they do participate in financial markets, they are more disciplined and considered when it comes to investing and trading.

Risks of not being an investor

Despite the financial industry‘s corporate and board-level progress, challenges like underinvestment remain a problem for female wealth owners.

There are many reasons why financially savvy women are still not investing at the level they can. Female investors often want more information before moving into a new asset class and simply don’t have the time to do the necessary research between business and caregiving obligations.

One crucial factor is limited, gender-focused opportunities for women to learn about investing in the stock market. 

Many female wealth owners complain about not having enough time to think long-term about their estate planning strategy. This lack of time and focus can be a sizable obstacle to financial independence and self-determination.

Considering that 90% of women will have to manage their own assets at some point, it’s surprising that they don’t feel comfortable when it comes to investing. While at the same time, they are worried sick about their financial situation in old age, after a divorce or as widows.

However, over time female wealth owners have also started to look at strategies for preserving wealth for multiple generations. They begin to realise the staggering amount of growth they will miss because of underinvestment.

Steps to becoming a successful investor

It is about time for women to claim their power in investing. And if you’ve been reluctant or frightened about the stock market, it’s time to change.

Here are six simple steps that can make you a successful investor:

#1 The financial plan

Everyone needs a guide on the path to financial security. However, 59% of women don’t have a plan. Instead, they estimate what their retirement needs will be. That’s a recipe for disaster. That causes anxiety and worry.

Find a financial advisor, financial planner or wealth manager you trust. Your choice depends on the size of your assets. Strictly speaking, if you own more than $1 Mio, go for a wealth manager. But, go “shopping” before you choose one. Demand a free introductory session. Only then will you be able to evaluate their compatibility and qualification.

#2 The right priorities

According to a survey, investing is at the lower end of their list of priorities. Way after career, caregiving, work-life balance, and socialising. No wonder it gets no love! No wonder women have no energy left to spend on growing wealth by investing.

Today‘s women live in a busy world of constant external stimuli, conflicting information, and busy lifestyles. Most shoulder far too many responsibilities, so too many readily give up owning control over their coffers. It is a desperate attempt to avoid more overwhelm and stress.

However, we must give our finances a higher priority! We need to set aside an hour or two each week to learn about finance, or review your portfolio, or talk with our wealth manager. I want to point out those hours are not to be subservient to other household businesses, your family life or social commitments. Your financial future is extremely important, so it should be treated that way.

#3 Grow your risk level

Studies show that women don’t like to take risks with their money. So, they keep too high a percentage in cash, money market accounts or government bonds. According to BlackRock, only 21% of women invest in stocks.

Talk to your advisor or wealth manager, have him explain the risks, and dare to be a little bit more ” aggressive, buy stocks or an index fund. With a medium yield between 5-8% per year, the return is certainly more rewarding. Alternatively, you could invest directly in a company/business model with a proven record and you believe in having a great future.

#4 Believe in you

Women earn most doctorates and master’s degrees. We manage companies, impact our communities, are competent caregivers, and are often brilliant multitaskers, so we should believe in ourselves when it comes to money.

All it takes is leaving our comfort zone and shifting our mindsets. Do not fear; you do not need to change your personality or be less attractive to men.

#5 Time to start learning

We know this already: The more you learn, the more confidence you’ll have, and investing will become more fun and less a place of fear.

You are in control of your financial education, it is your choice to start learning about money in a way that’s fun and relatable, without the fancy lingo.

Studies show that women who invest far outperform men. They trade less often and take longer to make decisions, traits that make successful long-term investors.

#6 Talk to your peers

Always remember you are not alone. Talking with peers will help you in this journey to becoming a successful investor. Women need to learn to talk more openly about money and overcome our limiting beliefs.

Peer coaching is a very successful way to grow your confidence and knowledge. They’re more intimate than your advisor or manager and more objective than friends or your spouse. They will inspire, give unbiased support, just listen or give vital information but above all, and they will hold you accountable to your goals.

Up-scale

Women account for 43% of HNWI and are a growing economic force. Most of them can be called financially “savvy, yet only 33% are active investors.

Financial advisors and researchers overlooked women as investors. As a result, many women became underinvested or under-planned, with negative financial consequences compounding over time.

Female investors often want more information before moving into a new asset class and simply don’t have the time to do the necessary research between business and caregiving obligations.

The Steps to becoming a successful investor are simple.