The world of finance is thought to be a manâ€™s world: Cigars. Receding hairlines. Tall men sipping champagne and making business deals in steam rooms (isnâ€™t that where the big deals happen?).
Luckily for all of us, that reality has been changing over time. Now, more and more women are in positions of power. In fact, women now control more than half of all U.S. wealthâ€”and that number will only grow in the coming years.1
But the biggest shake-up to the male-dominated investing world is that according to a recent study, women are outpacing men with their investments.
8 million investing accounts donâ€™t lie
According to new data from Fidelity Investments, women on average are actually better investors. The study states: â€œIn sifting through more than 8 million investment accounts, Fidelity discovered that women not only save more than men (0.4 percent) but their investments earn more annually (also 0.4 percent).â€ 2
You may say that doesnâ€™t sound like much.Â Oh, but over time it is.
As the article states, â€œfor a 22-year-old starting out with a salary of $50,000 a year, a woman investor will outpace her male counterpart by more than $250,000.â€Â Yep, thatâ€™s a quarter of a million dollars.Â So, what is it that women are doing better than men?
4 reasons women are investing better:
- They take on less risk. Theyâ€™re not loading up entirely on equities
- They save on trading fees (men are 35 percent more likely to make trades)
- They invest more in vehicles like target-date funds, whose automatic allocations make for diversification
- They save more in workplace 401(k)s and individual vehicles such as IRAs and brokerage accounts (almost a full percentage point annually)
This style of saving and investing, over time, adds up.
Whether youâ€™re a man or a woman reading this, the takeaway is the same â€” by saving as much as you can in a diversified range of investments that are suited to your goals, risk factor, and timeline, you can help put the odds in your favor.
Lastly, it also goes to show that you donâ€™t need to be a balding man sipping champagne in a steam room to get ahead. Which is good news for everyone.