8 Myths That Hold Women Back From Investing
By: Sallie Krawcheck
Myth 1: Women are not “as good at math” — and math-like things — as men.
Not true. Females’ math grades are every bit as good as males’. (And we make better grades overall. Yup, science too.)
Myth 2: Women need more financial education before they can invest.
Well, of course — almost everyone should be more financially literate. I saw this at Smith Barney and Merrill Lynch, where our research showed both genders could stand for more financial education. But the men invested regardless (and profited from it), and the women were less likely to.
Myth 3: Men are better investors than women.
Nope. Not the case. Women are as good, or better, investors than men. This is true at the professional level — hedge fund and mutual fund managers. And this is true at the individual level. We tend to have a longer-term orientation and trade less than men, and it pays off for us.
Myth 4: Women are too risk-averse to invest.
It is true that women are more risk aware. And there is also research that says that women value financial peace of mind seven times as much as having their investments go up. Women’s risk awareness is in fact a virtue; it keeps many of us from making the mistakes we see so many men make: chasing the hot stock, or the hot mutual fund, or the hot sector, or investing too much money in a single stock or idea.
Myth 5: Women need an in-person relationship to invest.
This is certainly the case for some, but it’s a broad generalization. In fact, we are finding at Ellevest that any number of women prefer an online investing experience; many refer to it as a “no-shame zone,” in which they can explore their financial outlook and their financial plan in privacy.
Myth 6: Women aren’t that interested in investing.
Sort of feels like we shouldn’t worry our pretty little heads about these manly endeavors, doesn’t it?
Myth 7: Women need more hand-holding to invest.
Myth 8: The real issue is the gender pay gap.
That’s basically the problem, isn’t it? I mean, until we get that fixed, we won’t really tackle the problem. Sure, the gender pay gap is ridiculous…and infuriating…and not fair…and antediluvian…and we all need to do something about it, but come on. No need to compound the issue by not taking actions in other areas of our lives.
Given the messages that we receive, it’s no wonder our financial confidence lags.
But the stakes are high enough that we can’t let these myths stand in our way.
Let’s take “Elle” as an example: Elle earns $85,000 a year currently. If she invests 20% of her salary in a diversified investment portfolio, in 40 years “Future Elle” will thank her. That’s because Future Elle will have between $565,000 to $2.1 million more saved than if “Today Elle” had kept that money in a savings account.
Today Elle can probably think of more than a million things she’d do with more than a million extra dollars. Her first step is not falling for old myths.
This article was previously posted on Ellevest.
Sallie Krawcheck is the Co-Founder & CEO of Ellevest. Her life’s mission is to empower women to reach their financial and professional goals.
Have more questions? Follow up with the expert herself.
Sallie Krawcheck’s professional mission is to help women reach their financial and professional goals (or, put more bluntly, to get more money into the hands of women), thus enabling them to live better lives and unleashing a positive ripple effect for our families, our communities and our economy. To that end, Krawcheck is the Chair of the Ellevate Network, a 135K-strong global professional women’s network; she is also the CEO and co-founder of Ellevest, a... Continue Reading
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