In my opening article, I focused on the general issues woman face as investors: out living men & being more conservative then their male counterparts in investing. The next issue women face is also not earning as much as men, on average.

Women may have fewer earnings and fewer savings than men. While there are many contributing factors, smaller paychecks and time out of the workforce are two major causes of this disparity.
Census data shows that despite the important strides women have made in the workplace, women’s median annual income was still only 77% of men’s in 2010; another way to put this is that for every dollar earned by men, women earned just $0.77, a difference that can add up to a lifetime loss of over $300,000. Women earn less than men in virtually every occupational category, making it more challenging for women to build wealth.

Research also shows that women are more likely to be caregivers to elderly parents, children, and other relatives than men, reducing their time in the workforce and the time they spend earning a living. Increased time out of the workforce results in lower lifetime earnings, less retirement savings and less pension savings, compared with their male counterparts. This contributes to the earnings and savings gap between men and women.

More conservative investment behavior among women may stem from lower confidence about investment knowledge. As shown in this chart, a 2011 survey of high-net-worth investors found that there is a significant difference in (self-assessed) risk appetites and investment knowledge between men and women.

While there is certainly nothing wrong with taking a conservative approach to investing – we are very conservative in many ways when it comes to managing our clients’ money – being overly conservative can inhibit the ability of your portfolio to keep pace with inflation while meeting your income needs. Finding the right balance of risk and reward is an important factor for successful investing.

Next issue, we’ll touch on the effects of transition and divorce on your finances and planning.

Women May Be More Conservative Investors
Research suggests that women are more reluctant to accept risk in their investment portfolios. Risk is an important issue in investing because there is a strong correlation between risk and reward. Typically, investments with more risk offer the potential for higher returns over time.



Income, Poverty, and Health Insurance Coverage in the United States: U.S. Census Bureau
Caregiving in the U.S. 2009, National Alliance for Caregiving and AARP.

Caregiving in the U.S. 2009, National Alliance for Caregiving and AARP.


About Your Columnist

Windus Fernandez Brinkkord is a featured columnist for Women Taking Charge, the official blog of Connected Women of Influence, where she covers the intersection of women in business and managing their investments and taking charge of their financial future. Currently, Windus is Senior Vice President of Investments with Trilogy Financial Services, a financial services company that focuses on helping business owners and individuals build and manage wealth.

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