Women, on average, live five years longer than men. They make, on average, 21 percent less than their male counterparts, they take more “career breaks" than men do, and their salaries peak much earlier — at age 40 versus 55.
When you take these factors, and others, into consideration, a woman will retire with substantially less than her male equivalent even though she's more likely to live longer. It's a no brainer — the short answer to “should women invest differently than men?" is a resounding, “Yes!"
The Status Quo
“We often read about the gender pay gap that affects women; much less well-known is the gender investing gap," said Sallie Krawcheck, the co-founder and CEO for Ellevest, an investing firm that caters specifically to females. “Investing less than men can cost some women just as much as the pay gap over their lives. While most big investing firms have 'women and investing' programs, most of them have missed the mark. In my opinion, it's because they all tried to market to women, not to serve women."
Currently, 86 percent of investment advisors are men, which translates into a clear lack of the female perspective in a field that affects the sexes equally. Krawcheck founded Ellevest to fill a clear need in the investing market, and the firm has gone back to the very basics to carefully examine, question, and alter the status quo. Along the way, they've discovered that women don't care about outperforming the market, which is the traditional investing goal. Instead, they care very deeply about planning for their goals and investing to reach them.
Susan Conrad, the chief client experience officer and an advisor at Plancorp, has worked in the investment space for 25 years and is particularly knowledgeable about goals-based, purpose-built investing. She agrees with Krawcheck regarding a woman's investment goals versus a man's.
“Women want to feel secure, to know that they are not going to outlive their money. We often set family related goals, such as paying for children's college or assisting with a down payment for their first home and leaving a legacy for the next generation. Men, in contrast, are often focused on investment performance and trying to hit a number that they think reflects success," she said.
Neither is an inherently wrong approach, but Conrad added that “as advisors, we should address the information needed by our clients. I think it's imperative for an investment strategy to be based upon a financial plan that includes the personalized goals and dreams of each client."
Sallie Krawcheck. Photo courtesy of Girlboss
Changing the Investing Tide
A woman outliving her retirement fund because an investment manager assumed a man's lifespan, or didn't account for other female-driven variables, can be catastrophic. And the fact that women are investing less than men, on average, is a sign that the industry hasn't been doing a great job serving the female market. Clearly, real change in the investment world is needed, and we're on the cusp of a tidal shift thanks to female-driven companies like Ellevest, and advisors like Conrad.
In addition to taking into account obvious changes (such as longer life spans, pay disparity, and salary peaks), subtle findings are being accounted for.“[For example], women won't invest in what they don't understand, while men will. Women are not more risk averse — as so many believe — but are more 'risk aware.' That means they want to understand the risks they are taking, and once they do, we have found that they are willing to take them," said Krawcheck.
“We built a proprietary investing algorithm that helps women choose their goals, make trade-offs among their goals, and put together an investing plan to reach their goals. If the client falls off track, we provide her with personalized tips for getting back on track."
Conrad added, “Over the next decade the largest wealth transfer in American finance history will occur. It will affect women, their children and millennials more profoundly than any other demographic.
Add to that the fact that 70 percent of buying decisions are made by women, and you can see why it's so important for advisors to understand women and address their concerns."
We are living in a time when women are rising to new heights which means they are regularly being confronted with the fear of being "too much". For women in business this is pervasive and costly.
A few ways women can be perceived as "too much" are:
Speaking up about their successes and achievements.
Sharing one too many photos of their cute kids.
Telling one too many people about that date night.
Looking a little too good in that swimsuit.
These can lead to being publicly attacked on social media or privately slandered which in turn leads to women dimming their light and walking on egg shells in hopes of avoiding conflict and judgement.
The minute a woman feels it's unsafe to shine she will begin to overthink, worry, and fear how she shows up in the world.
Forgetting to announce the book is done and the interview is live.
Choosing to focus on what's still on the to-do list rather than what's been checked off.
Many female entrepreneurs are subconsciously altering their behavior in an attempt to not attract too much attention to themselves, rather than focusing on allowing authenticity and magnetism to attract their ideal clients and community.
Women are afraid of being criticized, ostracized, and abandoned by other women for simply being who they are. This leads to quite the quantum when being who you are is simplest way to accelerate the growth of your business.
New research shows men are far more comfortable with self promotion than women are. Researchers found that men rate their own performance 33 percent higher than equally performing women. What we know is that self promotion pays off and this is where women are missing the boat.
The world needs more women to step into leadership roles and no longer be intimidated about creating six and seven figure careers.
Here are five ways to release the fear of being "too much":
1. Approve of yourself.
While it feels good to receive outside validation it will never be enough if you don't first appreciate yourself. The key to having a healthy support system is to make sure you are part of it. Being your biggest critic is what your mother's generation did. It's now time to be your biggest cheerleader. Becoming aware of self talk will reveal what belief is ready to be re-wired. Create a simply mantra that affirms how incredible capable you are.
2. Connect deeply to those you serve.
One powerful way to shift out of people pleasing behavior is to get clear on who actually matters to the wellbeing and success of your life and business. Leadership is not about being the most popular, instead it's a decision to be brave for those who can't be. Take a few minutes each day to visualize and meditate on those your business serves and supports. See your future clients moving toward you every time you choose to stand in your power and use your authentic voice.
3. Remember the legacy you wish to leave.
Having your life purpose and legacy in writing is one of the most transformational exercises you can do. Reading this often will keep you focused on what matters. Knowing what you wish to leave in the hearts of those you love most is incredibly grounding. You didn't come here to keep your mouth shut, dilute your truth, or dim your light-you came here to make a difference.
4. Forgive those who have been unsupportive in the past.
The past has a way of informing the future in a negative way when there is unresolved pain. Take a few minutes to get quiet and ask yourself who you have unforgiveness towards or maybe their name came to mind as you read this article. Listening to a forgiveness meditation or writing a letter to the person you are ready to forgive are both simple and effective ways to process and heal.
5. Be part a community of bright, successful women.
Meaningful relationships with others who have similar aspirations is what will keep you out of isolation and playing small. These connections can happen in a networking group, online community or a local Meetup. Thriving in every area of life is depend on you knowing where you belong and being celebrated there. Don't wait to be invited, go actively seek out people and places that support your dreams and desires.
6. Accept you can have it all.
Women have been fed a lie for generations that says, you can have love or money. Decide you can have it all and allow it to flow to you. You can have a successful career and an amazing mother. You can balance motherhood and loving marriage. Don't let anyone write the rules for you. This is the time to create the life you desire on your terms.
7. Celebrate everything!
The fastest way to leave the haters in the dust is to celebrate everything! At the end of each day lay in bed and recall the best moments. At the end of each week, publicly acknowledge and celebrate what's good in your life. Once a month, have a celebration dinner and share it with those who have helped you in the journey. If there's something good happening, talk about it with everyone who will listen!
May you be a woman who chooses to shine so that others may be reminded of all they can be and do.