Women and investing: Why don't women invest as often as men?

Women and investing: Why don't women invest as often as men?

4 ways to close the gender investing gap

Olga Rabo

Mar 10, 2021



min read

When it comes to women and investing, one of the main challenges is closing the gender investing gap — something that’s not widely talked about, yet something that needs to change. Urgently.

It’s a widely known fact that the gender pay gap is real: most people have heard that, on average, a woman earns €0.86 for every euro a man earns across Europe (if you’re a POC, you’re most likely earning even less).

Yet, the gender wealth gap is even worse, as, on average, a single woman is reported to own just one-third of the wealth of a single man. In Germany or France, for example, the gender gap in gross wealth amounts to 33% and 45% respectively.

This is why closing the gender investing gap becomes so important. Why? Because investing is crucial for growing wealth.

Studies suggest that women invest less than men. A recent survey found that women keep 71% of their wealth in cash, i.e. on their savings accounts, where the average interest rate can be as small as 0.01% (an even more dire story in Germany, where returns on savings turn negative 0.8% due to the inflation rate). In comparison, men keep 60% of their savings in cash, investing the rest to grow capital.

Gender investing gap

But women don’t only invest less — they start doing it later, too.

According to Forbes, only half of millennial women have even started investing for retirement, compared to 61% of men. This difference becomes crucial when remembering that one of the critical aspects of investing is compound interest, which rewards those who invest early over a long period of time.

Gender investing gap is a women's cause!


So when it comes to women and investing, the question is: why don’t women invest as early, as much and as often as men? Yet most importantly, what can women do to close the gender investing gap?

In this article, Cooler Future offers 4 actionable tips to do just that.

4 ways to close the gap between women and investing

1. Getting equal financial education

It’s only been 60 years since women got the right to open a bank account without a man’s approval. 40 years ago, women still struggled to get credit cards, which were allowed with husband’s consent only. If a woman was single, she heeded a male co-signer.

While many things have changed since then, this legacy continues — and impacts the way parents educate their children about money.

According to this survey, parents talk differently to boys and girls about personal finance, and it could be responsible for shaping habits and expectations that can last a lifetime. It appears that girls are mostly taught fiscal restraint and saving money, while boys are taught about building wealth.

For example, 61% of boys receive a lesson from their parents on credit scores by the time they reach high school, in comparison to 46% of girls. Boys are also 9% more likely to be taught about how to pay taxes and 5% more likely to be taught about bank accounts. In the meantime, girls are 13% more likely to be taught about how to track their spending and 5% more likely to be taught about budgeting.

As a result, as found by another study, women have great confidence in tasks such as paying bills (90%) and budgeting (84%), but only 52% of women say they’re confident in managing investments, versus 68% of men.

In other words, different lessons are taught to different genders. Just imagine if all kids got the same, equal education about money!

2. Getting rid of cognitive biases

Surprise, surprise: your own beliefs about money might be holding you back (hint: it’s not your fault).

The deep-rooted analogies between money and power have been extensively discussed in research, with many connections made that power is associated with masculinity, rather than femininity. So, if money means power, does money belong to men? Of course not!

Yet this belief has perpetuated every fibre of our society, and it’s harmful. Roughly 71% of Americans see men as financial providers, citing that supporting a family financially is what it means to be a good partner for a man. By comparison, only 32% say a woman makes a good partner if she’s the main breadwinner.

This needs to change, as women's contributions to household incomes have grown tremendously and their earning power is only increasing. So as much as gender roles have changed over the last decades, our own cognitive biases need to catch up with the reality.

Did you know?

Women are the next wave of growth in US wealth management, says McKinsey. By 2030, American women are expected to control much of the $30 trillion in financial assets that baby boomers will possess — a potential wealth transfer of such magnitude that it approaches the annual GDP of the United States.

3. Not waiting until you’re “enough”  

Investing is not something that “rich people do”. Investing is a tool to grow capital — no matter how small your starting capital is. There are ways and means to invest with as little as €20 monthly (e.g. Cooler Future). Of course, it’s nice to have a big starting capital, but that’s not what helps you to “make it or break it” in the long run. In the long run, what matters is how early you start and how much time you spend on the market.

Because women tend to start investing later than men, they can miss out on significant amounts of compound interest. According to Ellevest CEO Sallie Krawcheck, if you’re a woman making $85,000, you could be missing out on $1 million simply by not investing over the course of your lifetime.

So there’s no need to wait until you’re “rich enough”. After all, nobody is ever “rich enough” (just ask any billionaire).

Need proof? Take a look at the graph below showing what a €200 monthly investment in the S&P Index for 40 years might mean, compared to saving the same amount of money for the same period of time:

Another big challenge that women face when it comes to investing is that they reportedly lack confidence and self-belief of being able to make sound investment decisions. That self-doubt, combined with lower earnings (hello gender pay gap!) and family responsibilities (hello gender roles!) means that women, again, delay investing and start later. Yet examples prove again and again that women are more than capable of investing wisely — if only they just started.

In fact, studies also find that when women do start investing, they actually outperform men.

In contrast to men, women tend to hold their investments for longer periods of time, which reduces transaction costs. They also tend to have lower-volatility portfolios, with better, more consistent track records in comparison to men who often take chances on riskier investments. Last but not least, women are currently fueling the rise of sustainable investing, especially in the fast-growing area of ESG.

A study by the Calvert Foundation showed that female financial advisors are more interested in using sustainable investment funds (59%) in comparison to their male counterparts (39%). In addition, women are more likely to know about alternative investment opportunities and more likely to present these options to their clients too.

4. Making a plan & sticking to it

Financial planning is vital for women. As women embrace their increasing earning potential, there’s also an increasing need for women to accept responsibility for managing their own finances effectively. A man is not a financial plan! According to CNBC, more women (32%) than men (20%) rely on their spouses for financial planning — which can mean trouble in the long run, as females engage less, tend to stay out of the loop.

Want to close the gender investing gap and take control of your own finances? “Make a plan!”, says Denise Haverkamp, Co-Founder of finance, baby! (we stand by what she says).  

According to Haverkamp, here’s checklist to keep in mind:

Download the full presentation here.

Women and investing: 4 ways to close the gender investing gap and empower women to invest more.


Getting more women to invest — whether it’s in the stock market, exchange-traded funds, or mutual funds — is an essential part of female empowerment overall. It’s not just about closing the pay gap or the wealth gap — it’s about closing all the gaps. And the gender investing gap is a crucial part of it, too.

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