The gender pay gap and gender wealth gaps are common topics of discussion when it comes to women and finance. There is another pressing gender gap attributing to the dichotomy of wealth between men and women – the gender investing gap. According to SoFii, a 2018 study showed that men invest 6.6% of their income, compared to women contributing 5.4%. The gender investing gap is not as commonly known or discussed as other gender gaps, yet it has equally as damaging effects. The CFA Instituteii stated that 56% of men and 52% of women were investing in equities. For too long women generally have vastly underestimated the impact that investing has on their net worth, continuing to deepen the divide when it comes to wealth among men and women. 

As risk aversion among women is higher and altogether more common, a natural inclination towards saving rather than investing appears among women. Women often focus on building savings, managing current financial needs, and planning emergency funds, while men tend to invest and end up growing their wealth. A lower tendency to invest, paired with men often earning more money than women, tends to increase the gender wealth gap with men’s money increasingly compounding. As women focus on saving while men invest, women struggle to see the growth effects achieved by investing. 

Investing can often feel intimidating to women, in part because of a lack of inclusion and education on the topic. According to Apptopiaiii, the rise of investment apps and their participation  demonstrates the gender investing app in real-time. Women are much less likely to invest in general, as seen on common investment apps that claim to offer investment opportunities to everyone. Investing has risen in popularity with the inclusion of more retail investors, however, women have tended to be left out from this trend.

Unless investing is made more available and common among women through educational resources and financial advisors, the wealth gap may continue to widen. The combination of the gender pay gap and the investing gap continues to drive the wealth gap even further apart. A vetted financial professional can aid in the support of women when it comes to investing as they develop the right portfolio strategy for their financial goals.

Securities and investment advisory services offered through qualified registered representatives of MML Investors Services, LLC. Member SIPC ( Gambin Financial Group is not a subsidiary or affiliate of MML Investors Services, LLC or its affiliated companies. Supervisory Office 5001 Louise Drive, Suite 300 Mechanicsburg, PA 17055, 717-791-3300.

i SoFi “Women and Investing: The Gender Wealth Gap Nobody Talks About”; April, 2018
ii CFA Institute “The Equality Equation: Three Reasons Why the Gender Investing Gap Is Closing”; May, 2019 iii Apptopia “Investment Apps Have a Gender Gap”; March, 2018