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Wealth Wise

Women and wealth – how to build your wealth as a woman

byThe i-vest Team
byThe i-vest Team
The i-vest Team

Investing is a great way to secure your future, whether you’re a woman or not. But, as a woman, it might be even more critical for you to take the leap and start investing to secure yourself a better future and financial independence.

There are many reasons why women should start investing

Like in many areas of life, there is a gender gap, between men and women, in wealth management and investing.

Women get paid less than men

It’s no secret that there is a pay gap between women and men. It’s no secret that there is a pay gap between women and men. Globally, it is estimated that women earn 23% less than men. Switzerland is no different, and it’s gotten worse in the past few years. Overall, in Switzerland and 2018, women have earned 19% less than men for the same job.

This means that as a woman, you will probably take longer building wealth than men and getting to the same level of savings overall, even with a qualified job (in banking, as a lawyer, a doctor, etc…).

Women have a longer life expectancy

On average, women have a longer life expectancy than men. In Switzerland, the life expectancy of a woman is around 86 years old, whereas it’s approximately 82 years old for men.

So, not only do women earn less than men, but they have to live longer with their savings and retirements. They will also, most likely, face extra charges for the end-of-life care of their husband and funeral, which could significantly reduce their savings.

Women’s careers are less linear

Women’s careers are often less linear than men’s. With each pregnancy, women have to move in and out of the workforce. They, statistically, are also assigned the role of informal caregiver when an elderly relative needs one.

This means that while women and men might enter the workforce at the same time. By the time they both reach their 50s, men will likely have had uninterrupted careers for the past 30 years. At the same time, women might have worked only for 20 years total in many different companies, sometimes part-time, to take care of their children or their relatives. This means that men might have been promoted more often and have gotten more raises, thus accumulating more wealth than women and better retirement plans.

Women have experienced job loss due to the pandemic

Worldwide, many people have lost or quit their jobs due to the pandemic. Whether because they needed someone to watch the children, to become an informal caregiver, or because their place of employment no longer had the resources to keep them. However, women have suffered more from the pandemic than men in Switzerland and worldwide.

How can investing help women plan their future better

After a few years in the workforce, you will have enough savings to start investing.

If you start investing in your 20s, you will have accumulated enough so that you will be able to live a full and happy retirement or have savings to afford a better lifestyle, despite all of the workforce disadvantages that you will face, as a woman.

All of the causes above contribute to the fact that women take longer and have a more challenging time accumulating wealth than men. So, as a woman, you might have to start planning for your future sooner and better than a man. One of the solutions to erode the gender disparity between men and women is investing.

How can investing resolve the problems above

Women are less likely to invest their savings than men. However, they shouldn’t be afraid to start because, on average, women investors do better and accumulate more wealth than men that way. Being more diligent with the investment selection, having a long-term project, or not being impatient. All this contributes to their success in the market.

Steps to take to get started

There are many ways to start investing depending on your preferences and the amount of money you are willing to invest. Before even seeing an advisor or downloading an app, it is better to think some elements through.

Think about why you want to invest

The first step before investing should be thinking about why you want to do it. Do you have a long-term plan, like buying your own property or investing in your children’s education? Or do you want to make sure that you will have enough savings for your retirement? Those answers will allow you to make a proper long or middle-term strategy that best fits your needs.

How much money are you willing to invest

To invest, you have to be sure of the amount of money you are willing to put into it. Unlike a savings account, you won’t be able to easily withdraw your money in case you have a problem and need it (depending on the investment instruments chosen). And actually, the most successful investment strategies are from people willing to invest for a long time rather than a lot of money. Aside from the capital you are willing to put out first: What is the amount of money you want to add to that seed capital every month?

Choosing the right investment platform

Not every company has your best interests at heart. So be careful when choosing the platform you want to invest with. Do some research on your own before going to an appointment to know if they are the right fit for you or not.

Nowadays, there are many options to allow you to get started with investment. Depending on what you’re most comfortable with, you can go fully digital with app-only services or take the more traditional approach by booking an appointment with a financial advisor. There are some services online that can offer you both app services and appointments with financial advisors.

And most importantly, trust yourself. It’s your money, your future, and you shouldn’t have to compromise on your principles to the best path to your future personal wealth.

About the author
The i-vest Team
The i-vest Team

Driven by a need for clarity and simplicity on all things wealth related, the i-vest team works closely with senior financial experts and advisors to dive deeper into the world of finance, investment and wealth to make it more relevant for you.