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The gender investment gap: Why do men invest more money than women?

PHOTOGRAPHY BY KATE CHARCHALIS
WORDS BY Maddy Guest AND Sophie Dicker

And why do they appear to ‘know’ more about that realm than women do?

Do you ever just wonder how much easier life would be if you won the lottery? If you could donate to your favourite cause, or take the holiday without contemplating money? I mean, it’d be nice. It’s kind of crazy that over our lifetime, the average person will spend 90,000 hours at work – that’s around one-third of our entire life. And why? Well, mainly because of money.

Whether we like it or not, money is the backbone of our society. To be able to spend your money in a way that fulfils you is a privilege. We were recently asked why we invest. Our initial reaction was “Well, because it helps to build your wealth,” but when you get to the crux of it, building wealth is about financial freedom.


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It’s the security that comes with having sufficient assets and savings to enjoy life, without the pressure that money can hold over you. And yet, investing is something that women hardly ever talk about. The ‘gender investment gap’ is the difference between how much a female gets back on her investments over a lifetime compared to her male counterpart.

We talk a lot about gender inequality, but the gender investment gap doesn’t receive the attention it deserves. We asked a guest on our show, who or what influenced you to invest? Her answer was pretty inspiring. Her mum had experienced marriage breakdowns and found herself in a tricky situation financially. She didn’t want to ever have the same experience.

Our relationship with money develops from a young age and for the most part, we don’t even realise it’s happening. Think for a second about how you view money… Then think about some of the most influential people in your life. It’s very likely that a lot of how you understand money is influenced by their experiences.

However, the experiences that teach us about money have a gendered perspective. We are often assigned certain gender roles when we are young, and they can have different monetary values. Consider a young boy being allocated the chore of mowing the lawn, compared to a young girl who is responsible for putting the dishes away. Mowing the lawn might be considered more labour intensive and so the boy is allocated more pocket money. This is where it all begins.

These gendered constructs influence the way that we contribute to society. Finance has traditionally been a male dominated industry, and this can largely be attributed to the fact that for generations, sexist constructs have made money a taboo topic amongst women. Our observation is that the conversations we are involved in, influence our life decisions.

Conversations play out in our friendship groups, and more importantly where we spend most of our time – at work. So, if we have generations where women are under-represented in the finance industry, then it’s only natural that a lot of us are going to feel less than comfortable talking about money.

Besides, investing is often presented in the media in a way that seems confusing and intimidating – there are numbers and graphs in the newspaper or on your morning tv, as well as endless jargon. It can seem like a new language which has the ability to exclude, creating an ongoing cycle that perpetuates wealth inequality.

So, hear us out… Biologically, women are predicted to outlive men by almost half a decade, so we quite literally need more money to survive. But we also are more likely to take time out of the workforce to care for children or older family members. So here we are, retiring with less savings and less super to fund our longer retirement.

That’s not even accounting for the fact that the majority of us don’t invest. According to Morningstar, women make up just 18% of online investors in Australia. Far too many of us fall into the trap of keeping our money in our bank account, believing that budgeting is the path to financial freedom. Unfortunately, this is not the case.

Currently, interest rates in Australia are around 1.5 to 2.8 per cent per annum. Meanwhile inflation, the rate that general goods and services are increasing in price each year, is 2 to 3 percent per annum That means that the price of your coffee is growing faster than your savings.

Meanwhile, investing in the stock market has provided on average a 10 per cent return over the last century. We’ll let that sink in. So how do we change the norms and bring gender investment equality to the forefront of our minds? In a recent interview, the CEO of Macquarie Bank Shemara Wikramanayake said that she was fortunate to have a husband who was able to put aside his career and stay home to look after their now teenage children.

She told the story of how when her son was little, they asked him what he wanted to be when he grew up and he answered, ‘nothing’, he wanted to be a ‘normal person like my daddy’. Wikramanayake said that her son is now 18 and still has the same goal, because of the experience he has had growing up.

We’ll be frank – social norms are hard to change, and slow to move. But we have a generation coming through who are more aware than ever before. We have role models to look up to like Shemara, the first female CEO of Macquarie – Australia’s largest investment bank. Or Whitney Wolfe-Herde, the 31-year-old CEO of Bumble who upon the company’s recent IPO became one of the world’s few female billionaires.

It’s not that this is what we all need to aspire to. It’s that we need more women like this to show us what’s possible. To employ and raise other women up through the ranks with them. But it’s also up to us to empower ourselves with the knowledge to invest. Quit relying on family and partners. We work hard for our money and it’s critical that we make our own, informed decisions. Take this as a sign – now’s the time to get started.

Maddy Guest and Sophie Dicker are the cohosts of the You’re in Good Company podcast, a new production by Equity Mates Media. Through their weekly episodes, they debunk financial jargon, unpack financial trends and help you start investing.

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