“Women lack confidence in their financial decisions.”
Sound familiar to you? It’s just one of the many stereotypes that have long-defined conversations about women and money. For decades, these stereotypes have conditioned us to believe that women aren’t interested in investing. That they don’t have the knowledge needed to handle their finances independently. That finance is a “man’s world.”
But the truth? These are complete myths — at least, that’s what the research says. Today, women are the primary breadwinners in almost half of American households and control about 60% of the nation’s personal wealth (a number that’s on the rise). And what’s more, 70% of major financial decisions are made by women.
With the advent of the widespread #MeToo and #TimesUp movements, women all over the world are claiming their power, rights and influence — and financial services is the latest industry that’s getting a wake-up call.
Here are three myths about women and money that we can confidently debunk.
Men are better investors than women
When you think of the word “investor,” your mind may instinctively drift to images of men in suits and ties strolling down Wall Street, thanks to perceptions painted by the media and pop culture. Women are rarely included in these depictions, which sends a clear message: When it comes to investing, society generally considers men to be the more knowledgeable gender.
But the data actually proves this myth wrong. According to a 2016 Fidelity study, female investors tend to outperform male investors by an annual average of 0.4%. The same study also found that men made an average of 55% more trades in 2016 than their female counterparts. Since women are more likely to hold on to their investments throughout market fluctuations, they capture more growth over time.
Women are more risk-averse than men
In conversations about investing, women are often cast as “The Conservative Ones,” while men are positioned to be “The Financial Mavericks,” undeterred by risk and the financial markets. A 2015 study conducted by Merrill Lynch proved otherwise. Of the 5,000 women the firm surveyed, 85% said they agreed that risk-taking is beneficial in investing, and 81% said they could adapt to changing markets and investment outcomes.
What’s more, the study also found that men and women with the same level of financial knowledge exhibit the same risk behaviors. And though it’s true that women often spend more time contemplating the impact of investment decisions before diving in, it often works in their favor, as they take the time to evaluate whether the reward justifies the risk.
Women lack confidence when it comes to money
This is arguably the most popular and well-known stereotype about women and finance — and it’s also one of the timeliest. In recent years, prominent female executives and business leaders across industries have offered up their commentary on “the confidence gap,” or the notion that women are less self-assured than men. In the financial world, this has translated into depicting women as indecisive investors, insecure about their financial acumen and the decisions they make with money.
But the tide is changing: According to Ameriprise, women ages 25–34 are more likely than their elders to report they learned about finances from one or both parents, and over half say they are very confident in their investing skills.
At The Humphreys Group, we have seen firsthand that women are already financially savvy in so many crucial areas of their lives — for instance, family budgeting, volunteer work involving financial management, managing medical issues, and advocating for family members and loved ones.
We strongly believe that self-confidence starts with self-reflection. If women are clear about their goals and values, they’ll find that making financial decisions can be simple and straightforward. When you align your financial resources with your values and the aspects of your life that matter most to you, you’ll feel a sense of certainty and confidence in your path forward.
We invite you to help us change the conversation. Our new book, “Rewriting the Rules: Telling Truths About Women and Money,” dispels the myths that have held women back for too long and offers strategies to harness strengths they already possess, in finance and beyond. If you haven’t already, click here to download your free copy today.