Women Have Come A Long Way, Financially Speaking.

By Erica and Karen

We both had to learn to support ourselves early on. We figured it out. But somehow we did not pay all that much attention to how we might support ourselves after our jobs ended. We did our best to save, but our early investment strategies were uninformed. We learned a little late that investing in equities early was the best way to create economic stability, and we thought we understood in theory how the market worked, but our strategies were often motivated primarily by fear. Fear of risk. Fear without much basis in reality, it turns out.

We were not alone. Many people have recognized that women lag behind men in the investment arena for that very reason. Not very smart.

[I’]m an advocate of the stock market and I invest the vast majority of my savings in it. Those women with all their money sitting in their checking or savings accounts look at me like I’m some daredevil who jumps out of airplanes sipping a cosmopolitan. They may think that, but ask my husband and he’ll tell you I’m one of the most risk averse, unadventurous women he has ever known.

The very reason I invest my money in the stock market instead of leaving it in the equivalent of cash is because I am so risk averse. Based on my education and experience, I believe a woman who doesn’t invest is actually taking on more risk than I do.

But things are changing.

First, women of all ages are investing more than ever.

A 2021 study by Fidelity found that 67% of women are now investing outside of their retirement accounts, compared to 44% in 2018. 

Second, and unsurprisingly, women become more confident in their investment abilities as they get older, perhaps because women are also excellent investors, so presumably their confidence rises with good results..

The good news is that while women lack confidence in investing, this self-perception changes with age. 46% of millennial women feel equipped to handle investments, which is 52% of Gen X women, 54% female baby boomers, and 62% of women of the silent generation.

Third, even when they are fearful of investing, women are familiar with money. Women have for a long time controlled their families’ consumer spending.

In recent years, women have accounted for more than 85% of purchases per TechCrunch across various categories in the U.S. alone.

That experience makes them big players in the longevity economy, and gives them a broad set of objectives when they do invest.

These shifting demographics make women the biggest players in what’s called the longevity economy—powered by adults 50 and older who are responsible for 70 percent of disposable income in the U.S. If the longevity economy were a country, it would have the third-largest gross domestic product, behind the U.S. and China, according to Joseph Coughlin, author of The Longevity Economy and director of the MIT AgeLab, which has spent two decades devoted to research that busts myths about aging.

“Women are the biggest players in the longevity economy, and their power as consumers remains largely overlooked,” Coughlin says. “Their influence comes from the fact that they make choices not only for themselves, but often for a child, spouse or parent. They are most likely to be the chief consumer officer of the household.”

While women of different generations have different goals when it comes to investing, once they overcome fear many women understand that investing now can reduce economic risk for their families.

Seventy-one percent of women agree that investing is a way to build generational wealth, so it’s no surprise the leading factors motivating women to invest include ensuring a certain quality of life for their children, making as much money as possible, and being able to afford goals like retirement and large purchases. The focus on building generational wealth is the top motivator for Millennial women, whereas older generations are more motivated by being able to afford future goals.

Seeing the bigger picture, and supported by extensive experience with the role money plays in the lives of their families, Boomer women have really ramped up their investing.

According to Fidelity’s annual Women & Investing Study, the percentage of boomer women who report investing in the stock market increased by an astounding 23% from 2023 to 2024, the largest jump of any generation surveyed (Gen X took second place, with an 18% increase).

When you consider that women have had the ability to govern their own finances only since 1974, this is an amazing trajectory.

It wasn’t until 1974, when the Equal Credit Opportunity Act passed, that women in the U.S. were granted the right to open a bank account on their own.

Technically, women won the right to open a bank account in the 1960s, but many banks still refused to let women do so without a signature from their husbands. This meant men still held control over women’s access to banking services, and unmarried women were often refused service by financial institutions.

So, ladies, wherever you are on the age spectrum, take charge. Talk to your advisors, talk to your mothers, talk to your daughters, and revel at what you have achieved over the last fifty years.