The days of yore are behind us, to a large extent. Women world over (with some exceptions, obviously) are not blatantly discriminated against anymore. They rub shoulders with men of power and even show them their place from time to time. Pay parity is not as distant a dream as it used to be. And this is all wonderful not just for womankind, but for humanity by large. However, considering women investing, a starkly different narrative persists. This could be due to the unfair advantages men have gained due to years of oppression of women, and also thanks to inherent behavioural biases. Here, let’s discuss the latter.
The adage that men invest and women save is unfortunately still one that rings true. Numerous studies have shown that women are not just reluctant investors, but even the ones who enter the market are significantly less aggressive than men.
Speculations are galore for why this is the case. One perspective is that women have historically made less money compared to men, and are resultantly more conservative spenders than their counterparts. Also, protective/maternal instincts in women have been said to play a role as well, inherently making them more risk-averse. All this means that they are less active in the markets and that has further dented their potential earnings.
In light of all these potential bottlenecks, here’s why non-investing women should seriously consider taking the plunge:
1. They could be better at it than men
Studies have shown that men tend to take more risks and burn their fingers while women prefer a more cautious approach. Using a cricket analogy, parallels can be drawn between the investing style of men and the batting style of Virender Sehwag. On the other hand, women are more like Rahul Dravid; slow and steady, but ultimately more successful and consistent. Basically, being an aggressive investor is a double-edged sword. While the potential gains are greater, a financial catastrophe cannot be ruled out.
2. They live longer
Statistically, women world over have higher life expectancy than men. While their longevity is one of the possible reasons for their outlook towards investments, it is actually also a reason why women should invest more. Longer life means more years in retirement and greater healthcare expenses owing to advancing age. It thus becomes all the more imperative for women to not just save, but invest and build wealth.
3. They should leverage the source of income
Lesser income earned translates to less money saved and even lesser money invested, ultimately resulting in an inadequate corpus. Hence, women could try to be more proactive while investing to ensure that they mitigate this unfortunate disadvantage.
4. They bear children
While maternity leave policies have changed for the better over the years, women can vouch for the fact that it has an adverse effect on their careers. Firstly, and very unfairly, this works against them while being employed. Even if one argues that this is not the case, it cannot be denied that a career break is a significant setback. One could lose a year or more when they might have even been at the peak. On making a comeback, the new mom needs to prove herself all over again, since their prior achievements are not in recent memory. In some cases, opportunities may dry up or they might even have to settle for lesser pay. Hence, earning years should be spent devising a concrete strategy to build a substantial corpus, while taking into account these pertinent factors.
Investing is paramount, not just for your long-term financial well-being, but also for peace of mind. It helps you stitch a cushion against any adverse situations, while also ensuring that you are able to keep up your lifestyle even long after you’ve stopped earning.