A LITTLE CAN GO A LONG WAY

GLOBAL MANAGEMENT CONSULTANCY FIRM, MCKINSEY AND COMPANY, PREDICTS THAT WOMEN WILL CONTROL $30 TRILLION IN FINANCIAL ASSETS BY 2030 –ALMOST THE VALUE OF THE ANNUAL GROSS DOMESTIC PRODUCT OF THE UNITED STATES

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IT IS A WELL-KNOWN FACT that even today, women are on the backfoot when it comes to finance. According to a report by United States-based financial services firm, Fidelity, women earn $0.82 for every dollar men earn. On top of that, South African risk insurer Liberty found that in 2021, most retrenchment claims were from women between the ages of 21 and 34, when their careers should be flourishing.

In addition, a 2019 World Economic Forum report says that, statistically, women live longer than men but earn 30 to 40 percent less over their lifetime.

Why Women Invest Differently

When it comes to maximising a woman’s ability to successfully invest, it is important to understand that they invest differently to men as their priorities are different. Seanagh Fannin, managing director at Carrick Athena, a financial advisory service aimed at women, says, “Women have been socialised to nurture, so we want to take care of our people and our lives. This means women need a different approach to investing.”

The McKinsey report highlighted some of the ways women investors are different:

• They are more likely to seek advice as they are less confident in their financial decision-making abilities.

• They are more conservative in their investment approach.

• Their financial priorities are based on life goals, not outperforming the market.

• Women are looking for a secure retirement.

• Women worry about long-term planning and their priorities are healthcare, retirement savings, lifestyle maintenance, and covering day-to-day expenses.

Despite their lack of confidence when it comes to investing, research shows women earn better returns than men because they are more consistent and conservative investors. In 2020, Goldman Sachs found that 43 percent of mutual funds run by women outperformed their benchmark.

Prioritising Their Financial Future

Seanagh says her firm is seeing an upsurge of women between 25 and 35 becoming active investors. This is also true for the 65-plus age group, where widows are looking to grow their wealth after their spouses have passed away.

“Money is the number one stress for women,” says Seanagh, “but they often do nothing about it.” As such, she urges women to start saving and suggests having an emergency fund to cover at least three months’ worth of expenses. “This might be for

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NAFISA AKABOR