How To Become A Savvy Female Investor
By: Jennifer Collins, CFP®, Partner, Senior Wealth Advisor
There are four simple truths that will impact every woman’s financial future.
Truth #1 – Women earn less than men; on average 81 cents for every dollar a man earns.
Truth #2 – Women often interrupt or scale back their careers to raise families; therefore reducing their lifetime earning potential.
Truth #3 – Women live longer than men; eight out of ten women will be solely responsible for their financial well-being [1].
Truth #4 – After the death of their spouse; many women will experience a decline in household income [2].
Given these truths, it’s hard to understand why more women aren’t actively involved in planning their financial futures. Gender roles, reinforced by society, still play a big part in women abdicating financial decision-making to their spouses.
Over half of the women of the baby boomer generation leave major financial decisions to their spouses. Only 22% of this age group thinks they should be more involved. Surprisingly, 51% of millennial women defer to their spouse, even though 69% of them believe they should be more involved [3].
It’s not like women aren’t familiar with managing money. Most women handle the day-to-day expenses and bill paying for their households; commanding a down-to-the-penny grasp on the details. The realization that they already have well developed fiscal skills and that they don’t need to be financial experts, has helped women start to take control of their wealth and become savvy investors. The first step is simple – become more aware, involved and willing to ask questions.
“Pay Yourself First” And Save, Save, Save
The investment adage “pay yourself first” means that you should regularly save and set aside a set portion of your income before you start spending. Every little bit helps and the sooner you start, the more wealth you can potentially build. Women who regularly save may be more likely to reach their retirement goals.
Have A Plan For Your Financial Future
Understanding what it will take to provide financial security throughout retirement can be challenging. Women tend to live longer than men, so it’s important to adequately predict social security and retirement funds, as well as plan for healthcare costs. Have a good grasp of the retirement plan offered by your employer, as well as your spouse’s employer. Make sure that the investment allocation of both work in harmony.
Understand That Some Risk Is Necessary For Reward
Investing too conservatively can limit the total growth of investment portfolios. Studies show that women sometimes shy away from stocks, which have the highest investment return over time. Savvy female investors understand that there must be an appropriate level of risk in their investments to achieve their financial goals. To that end, a diversified portfolio can help balance risk and return over time and is built based on each investors’ goals, risk tolerance and time horizon.
Have Professional Advisors That You Trust
The most financially savvy people aren’t afraid to ask for advice. Or, ask questions about things they don’t understand. You wouldn’t let a surgeon operate on you without understanding what they will be doing. Apply the same standard to your investments.
Being able to discuss plans and potential concerns with a trusted financial advisor, accountant and estate planning attorney are important to realizing your goals. Having an ongoing relationship with your advisors may help you navigate through market changes to stay on course to achieve your life goals.
Disclosure:
This article is provided for educational purposes only and should not be construed as investment, tax, or legal advice. The views expressed are general in nature and may not apply to all investors. Individuals should consult with their financial, tax, and legal advisors regarding their specific circumstances. Investing involves risk, including the potential for loss of principal. Asset allocation and diversification do not guarantee a profit.
1 USA Facts, “Do women live longer than men in the US?”, March 21. 2025, National Vital Statistics Repots, Vol. 66, No. 6, November 27, 2017
2 Bank of America “Study Finds 94% of Women Believe They’ll be Personally Responsible for Their Finances at Some Point in their Lives,” June 22, 2022, Elizabeth Olson, “New Widows Have Another Concern: Their Finances,” The New York Times, September 4, 2015
3 UBS, Own Your Worth, 2021