This article was written by Yael Warman, Content Manager at Leverate. Yael is a creative writer with a strong background in marketing and advertising. Yael has been a writer for over 10 years and has worked for clients in various industries as well as her own companies.
We have a money problem.
Women I mean.
Women have a money problem. And I’m not talking about the stereotypical urge to spend our paycheck on Manolos. I’m talking about a significant gap between men and women in the way in which we earn money. It is widely known that women earn less than man (about 78 cents for every dollar) for the same position and that women occupy less than 15% of board seats and senior executive positions in S&P 500 companies. As unjust, inexcusable and frankly embarrassing as this issue may be, because the reasons are not linked to our talent or professional capabilities, this is the current world we live in and while we are slowly learning to “lean in” and change the panorama, that is where we stand today.
Taking into account the statistics, let’s figure you currently earn US$85,000 per year and you have 40 years of work ahead of you. If you were to earn 22% more (what a man earns), that would be about three quarters of a million dollars more! As we stand today, there is only so much you can do to earn that additional million bucks. There is however, a way in which you can double that amount, and that way is entirely within your control.
They say men are from Mars and women are from Venus. Well, it seems as though in Venus, they didn’t teach us to invest. According to a recent study, only 53% of women have started saving for their retirement, as opposed to 65% of men. Yes, a $1MM raise would be awesome, but wouldn’t an extra $500,000-$2.1MM be even better?
Using the power of compounding interest, if you were to take 20% of your pre-raise salary and invest it in a portfolio made up of say, stocks and bonds, you could earn between $500,000 and $2.1MM (depending on market performance) over the course of 40 years. You can see how the power of investment can outstrip the value of a raise, can’t you? Historically speaking, even considering major crises, the stock market has earned an average 9.5% annual return since 1928.
Knowing that men and women take control of their finances in much different ways, gender-specific online investing firms are springing all over the place. Not only do men and women approach finances differently, but the needs vary as well. Women tend to live longer than men, which means they are more likely to outlive their assets. With these in mind, these firms are attempting to close the gap between men and women when it comes to investing, by providing gender-specific financial advice, educational offerings and other tools.
One such firm, SheCapital for example, describes itself as an easier-to-use platform that “[takes] the complexity and anxiety out of investing for women.” Will these gender-specific investment platforms help empower women to achieve financial independence or rather make women feel inferior by setting lower standards of financial literacy? For that, we’ll have to wait and see. In the meantime however, whether you prefer gender-specific or gender-neutral, I suggest you begin taking charge of your future today.