Women have more financial influence now than ever, despite factors disproportionately holding us back. The fact is: when we control our own money, we control our own lives. So, in our opinion, to fully own our financial futures, we need to grow our wealth. And the best way to do that may be to invest.

While the financial industry — and the world — hasn't historically supported women and investing, research shows when women take the chance, we’ve come out on top. Women are now widely reported to be better at investing than men, yet many of us just don’t.

It’s important to know the reasons women aren’t investing as much so we can address them, demand change, and ultimately join those who are already disrupting the cycle. The result — more money in the hands of all women (yourself included) — would mean massive economic, societal, and cultural improvements. Who’s really ready to live in that world?

Here’s just about everything you need to know about women and investing: The myths vs the facts, why investing for women is just different, and the ways each of us could help to make investing fairer, more accessible, and better for all women — starting with the money moves you can make now, whether you’ve invested yet or not. 

Women and investing myths

Myth 1: “Women don’t care about investing.”

Money is women’s #1 source of stress. A 2021 Ellevest Financial Wellness Survey backs this up: 49% of women said their mental and emotional health has suffered from financial stress, and 40% said their physical health has suffered. It’s clear women care. A lot.

What’s held us back:

Women aren’t encouraged to invest. Instead of being inspired to build wealth, we’re told our priorities should lie elsewhere from a young age. So, women tend to keep more money in cash, and the cost of saving vs investing could mean we miss out on hundreds of thousands of dollars, if not millions, over our lives. 

Women are shamed and blamed for our lack of investments. Nowhere do we get the message that “having less money than men is not your fault.” So we’ll say it: It’s literally not your fault. And we’ll gesture wildly toward: the pink tax, the pay gap, the debt gap, the domestic work (and emotional labor) gap, and the investing gap. 

Women don’t talk about investing. It’s the unfortunate result of being relentlessly money-shamed. Instead of talking about money, women would rather discuss almost anything else. It’s time to push past this taboo — if we don’t talk about it, we don’t realize how deeply this affects us, we demand less, we pursue less.

Myth 2: “Women aren’t successful investors.”

Women are managing more wealth than ever before — about $10 trillion, or a third of total US household financial assets. And our financial influence is about to surge. Over the next decade, American women are expected to control much of the $30 trillion in financial assets that baby boomers have. That’s a seismic wealth transfer to an underserved and underrepresented population. 

What’s held us back:

Women are told we’re bad with money. We hear it loud and clear from culture: Women are “excessive spenders” who “throw away money” on buying lattes, while men are told to spend to increase their power. It’s an infuriating tactic that shifts the attention for the underlying systemic money challenges women face to women themselves.

We’re told we’re too emotional. While women are still financially less confident than men, data shows that the presence of women in leadership positions at banks and other financial institutions appears to be associated with greater financial resilience and stability. It’s the same for individual accounts managed by women vs men, too.

We’re told we’re too risk-averse. But women are actually risk-aware. Big difference. It’s not that we’re afraid to dive into the pool. We just, understandably, want to know how deep the pool is first. This tendency to slow down and think before acting makes women more successful investors than men.

Myth 3: “Women have to be in a perfect position to invest.”

Not to get all “we live in a world where …” but society actively discourages us from building wealth with toxic messaging and money lies. And maybe all that paralyzed you, or it pushed you toward perfectionism and imposter syndrome. But the next time that little voice tries to tell you you don’t know enough to take the next step with your money, tell it to beat it.

What’s held us back:

Women “have to know everything” to start investing. Here’s the thing: Men don’t start knowing any more about investing than women do — they just dive in anyway. Right now, at this moment, you already know all the things you really need to know, whether that’s “I need to fix my concentrated stock position” or “I don’t know the best time to contribute to my IRA, I should ask a financial pro for help.” The rest you can learn as you go. Plus, just because you haven’t done something before doesn’t mean you’re bad at it.

Women “have to have a right amount” to start investing. Right amount doesn’t refer to an actual dollar amount. But the right amount can refer to the number you need to smoothly navigate emergencies and short-term goals — ‌very valid reasons as to why you’d save money vs invest it. Once you’ve reached that comfortable savings place, you should consider investing, ASAP. 

Women “waited too long” and can’t start investing now. Asking for a friend: Is now a good time to invest, even if I passed [insert life milestone here]? The answer couldn’t be a more emphatic YES from us. Especially, since women live about five years longer than men. Every day you wait to invest could cost Future You. Don’t waste any more time trying to calculate the potential earnings lost, invest instead!

Become a client to unlock investing and financial guidance today.

Women and investing facts

Findings from the 2022 Ellevest Financial Wellness Survey show where women put their money: 

• Fewer women invest than men. Just 36% of women say they’re investing in general, (vs 63% of men), despite data that shows women outperform their male counterparts on average by 0.4% annually. Financial priorities might be another reason less women invest: Their #1, “supporting family,” is a more immediate goal than men’s top-ranked priority, “retirement savings.”

• Women stress more about money than men. A whopping 43% of women actively worry about money at least once a day, and 59% do so at least once a week. In both instances, they’re out-worrying men (36% and 55%, respectively). At the same time, women are realizing the toll this takes: Women are now three times as likely to see financial wellness as critical — now only second to mental wellness.

• Fewer women have a financial advisor in their corner. Yet research shows that people with a financial plan have 3x the net worth of those who don’t. Nearly 70% of women say they’ve never met with a financial advisor, compared to just 41% of men — not surprising considering how overwhelmingly male the industry is (though Ellevest’s team of financial advisors is 100% women).

• Women are less reactive investors. 75% of women who are actively investing for retirement say they’ve continued their contributions despite market volatility, compared to two-thirds of men. This tracks with findings from UC Berkeley that show men are “overconfident” investors, which means they’ll trade more and perform worse than women.

• Women invest for impact. A third of Gen Z women (33%) and more than a quarter of millennial women (28%) say impact investing is important to them. The more wealth women build, the better for all: ​​Women invest 90% of their wealth back into their communities, and give a greater percentage of their wealth to non-profits compared to men. 

Read more Stats About Women and Money

How investing for women works today

A big shift is benefiting women in investing today … and it’s not coming from society, culture, or the economy (despite all our “leaning in.”) The shift is coming from us women. More specifically, our money mindset when it comes to investing.

1. More women understand that money is not just money. It’s far more: It's our future, it's our dreams, it's our autonomy, it's our hopes for our family, it’s our catalyst for making societal impact. In fact, money is power.

2. More women reject the idea that we need to be financially “empowered.” The dictionary definition of "empower" is “to be given power.” But women don’t need to be given power: We need to choose to use the power we have, which is often way more than we think.

3. More women are on top of their money. Taking a more active role with finances in relationships is now a non-negotiable. It makes couples happier, leaves less room for negative surprises down the line, and gives us the freedom to leave if we need to. Because — and we’ll never stop repeating ourselves — when you control your money, you control your life. 

How women can invest in themselves

If you’re new to this: We recommend starting small, and starting now. Ask yourself where it'd feel good to get set, then go. 

Maybe you want a better idea of how investing works, why compounding is something you needed in your life yesterday, or what you need to learn about stocks to start investing. Or you might want to set or update your financial goals first. It could be that figuring out how to split expenses with your partner or that a habit of overspending is *the thing* preventing you from making bigger money moves. Tackle whatever it is. Can’t afford to invest yet? There’s still things to do.

If you’re ready to invest: Do it! Yesterday was always the best time to invest, so make your move. 

No matter what, take advantage of your employer’s 401(k) match if it’s available to you. Then, use an investing platform to build a diversified, personalized portfolio at your preferred risk level — it only takes about 15 minutes to put your money to work for you. Want a true 1:1 approach? Connect with a financial planner. (Look for “CFP®” after their name; a CERTIFIED FINANCIAL PLANNER™ professional holds the highest level of credibility in the industry).

If you’re already investing: Keep it up. The more boring, the more on autopilot, the better.

This is the management stage: invest consistently, check in annually with your financial advisor, and plan for the money moves you should make at every age.

Become a client to unlock investing and financial guidance today.

How women can invest in other women

Be aware of your impact. Every time you make a decision about how to invest (and spend, and save) your money, you essentially give companies and industries the ability to keep doing what they’re doing — for better or worse. If we don’t keep tabs on what we’re truly investing in, we risk lending support to causes that conflict with our own values. 

For example, businesses that perpetuate existing inequalities, or ones that rely on exploitative products and services (like tobacco or predatory loans), or businesses that produce environmental pollutants, or ones with poor working conditions … unfortunately, the list goes on. Rule out your role in all that with a portfolio health check.

To do: Research the assets you own (or might own) to be sure you’re using your financial power for good.

Know your values. Women would rather invest in companies that are good for people and the planet, also called Environmental, Social, and Governance (ESG) companies. This is less of an issue for men. Why might that be? Well, ESG issues — climate change, unequal pay, and the lack of gender diversity, to name a few — all disproportionately affect women. And, if you’re someone who prioritizes values like conservation, equity, and inclusion, they’re what'll drive your choices and actions (whether you know it or not). 

When you’re clear on the principles you prioritize above all others, you can use them to make your investment decisions feel easier and more satisfying. 

To do: Use our worksheet to help you identify and name your own core values free for Ellevest clients), or make your own list.

Invest intentionally. Financial returns and social returns don’t have to be mutually exclusive. At Ellevest, we call the practice of aligning your investment portfolio with your values intentional investing. This act — excuse us, this radical act — creates the opportunity to potentially earn a competitive return and have a positive impact with your investments. 

Today, it’s easier and less expensive than it’s ever been to invest for impact. Many investing firms offer the option to screen out “bad” factors, like investments that score poorly on ESG criteria. Other firms (like us) take it even further by allowing you to actively direct some or all of your money into “good” things, better known as impact investing. At Ellevest, our version of impact investing is all about investing to advance women, aka gender-lens investing. 

To do: Ask your financial advisor how you can invest for impact.

Successful women in investing

Some legendary names to know, from then and now:

• Muriel Siebert⁠ was the first woman to buy a seat on the New York Stock Exchange. After that milestone purchase in 1967, she went on to start her own brokerage firm, and later donated millions to help other women get their start in business.

Here’s more Women Who Made Finance History to know.

• Mellody Hobson started as an intern at Ariel Investments, the first Black-owned mutual fund and investment management firm in the US. Now, she's Co-CEO and President. She was named to Time Magazine’s list of the 100 most influential people in the world in 2015, and today, she serves as independent chair of Starbucks board of directors (and is an investor in Ellevest, Inc.)

Here’s more Black Women Leaders in Finance to know.

• Arlan Hamilton founded the VC fund Backstage Capital in 2015 with virtually no investing experience — and while being unhoused. Now, the firm has invested in over 200 companies led by founders who identify as women, people of color, and/or LGBTQ. In 2018, she co-founded Backstage Studio, which launched accelerator programs for founders in Detroit, LA, Philadelphia, and London.

Here’s more LGBTQ Leaders in Finance to know.

The most popular ways women invest

Want to do good with your dollars? Try value-based investing. 

We’ve shared how women especially get investing according to their values. And our insistence on impact investing is disrupting the industry: it’s been reported that $70 billion was invested into ESG funds in 2021 — 14 times more than the amount just three years earlier. What’s equally important is that ESG fund investors tend to not sacrifice performance for their values.

Want to target specific life goals? Try goal-based investing. 

Women are passing on traditional performance-based investment objectives for progress-based ones that are personalized to target your investing goal — your dream retirement, buying a house, building up a kid fund, starting a business, making a big splurge. Because goal-based investing allows you to see your financial progress in real-time, it’s more likely you’ll stick to that investing goal, reach (or surpass) it, and experience the result IRL.

Become a client to unlock investing and financial guidance today.

How to start investing for your financial future

While there’s more opportunity than ever for women in investing, we’re still living in a bleak financial landscape. In 2023, women’s financial health has shown a slight improvement … from rock bottom. While we push for change, we have to care for our own financial wellness. 

Practicing financial wellness is the most accessible way to start investing in your financial future. When you know what you have, know where you’re headed (and take steps to get there), and feel good about it, we believe you’re closer to controlling your money — and your life — on your own terms. Here’s how to start:  

• As always, you can use our financial resources to DIY your financial wellness game plan:

1. Establish your financial foundation

2. Create your financial plan

3. Update your money mindset

• Or, for a more dialed-in approach, download Ellevest’s Financial Wellness Check-In Worksheets that'll help you gauge your current financial health and set you up to practice financial wellness year-round. 

Women and investing: What’s next?

We packed a lot into this article on women and investing, and for good reason. But if there’s only one thing you take away, make it this: you’re ready to prioritize your financial future.

Following through on any of our tips for women in investing will take effort. But it'll soon make dealing with money feel less overwhelming, and potentially put you in a position to build wealth. Putting away money for financial goals is the #1 thing that makes women feel in charge of their future. Growing that money through investing can cement your spot at the top.

Disclosures