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Women Invest Differently to Men

Mars and Venus: Women Invest Differently to Men

There are a number of financial hurdles women must overcome that simply don’t apply to most men.  First, there’s the gender pay gap; the difference between what men and women earn.  According to the Workplace Gender Equality Agency, the gap between what men and women earn still sits at above 20%.

But that’s just the start.  Women are more likely to have career breaks than men.  They often leave full-time employment in order to meet family commitments, whether that be raising children, or increasingly, caring for elderly parents.  And that has an impact on their super.  According to ASFA, the average super balance for a man aged between 60 and 64 is around $270,000.  For women the same age the figure is less than $160,000.

All of this means that it’s more important for women to engage with their financial decisions and take control.  They need to be more intentional when it comes to investing.  The trouble is, when it comes to investment, fewer women participate than men.

A research paper produced by Fidelity International, “The Financial Power of Women”, investigated what’s standing in the way of women investing.

Women are less confident

A lack confidence is a major barrier to investing, and women are less confident than men.  They also believe that they have lower financial literacy.  That’s despite the fact they’re more likely to be the financial controller of their household, and despite the fact they’re less likely to have been burned by a bad investment experience in the past.

Women are more cautious when it comes to investment as well.  When they choose to invest, it’s more likely to be conservative, like a term deposit.  And women favour property investment more than men, perceiving it to involve lower risks than investing in shares.

Women invest for different reasons

For many men, investing is an enjoyable activity in its own right.  Men invest to keep score; to measure their success.  And when things are going well, investment returns are something to brag about at the golf club. 

But for women, investing is purely a means to an end.  They invest for a particular goal or purpose.  And those goals won’t necessarily be about them and their material desires. It’s more likely to involve providing for their family or saving up for a holiday to be shared with family and friends.

Empowering women to start investing

It’s clear the main barrier to women engaging with investment is a lack of confidence.  That lack of confidence stems from perceived lack of financial literacy, which creates a cautious attitude.

It’s smart to be cautious.  And it’s smart to steer away from overly complex investments that you don’t understand.  But the best investments are easy to understand if you take some time.

At When Financial Solutions, we take the time to explain important investment concepts and how they can be applied to your personal situation.  There’s no rush.  The important thing is that you ask questions and start to build confidence.  It’s not a matter of if you will feel confident enough to invest, but when.


Michael Bowman and James McMaster are co-founders of When Financial Solutions

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