Say it with… $12 trillion

$12 trillion could be added to the global annual GDP by 2025 if women had the same chances as men to participate in the economy. Up to this point, women still have to fight for receiving the same appreciation, economic power and financial responsibilities than their male counterparts.

One of the most prominent problems that we are facing is the gender pay gap. Currently, the average pay gap across the 28 member states of the EU is at 16%. And while unequal payment of work force heavily contributes to such low economic participation of women, there is a possibility that most women do not consider at the moment but that might give women more financial power and security, despite still existing unequal incomes: Start investing money.

Women tend to park 71% of their holdings in cash and for many investing money still seems to be a men’s topic. There are too many barriers preventing women from investing. For starters, women tend to think that they lack the appropriate financial education to invest their money wisely. By not investing most believe to be on the safe side when it comes to their savings. There is still a misconception that holding money on the bank is the low-risk option while actually not investing the earned money may be far more risky.

By not investing women do not only miss out on the potential of markets, but also may end up with a decreased value of their saved money due to inflation.

Essentially, the financial ecosystem needs to be more welcoming to women. Financial advisers need to encourage women to invest and develop services that are designed to the specific needs of female investors. As women approach financials differently and show different behavioral patterns than men when they invest, financial advisors should be able to adapt their services accordingly.

In fact, current research shows that women tend to invest in a more conservative and risk-averse manner and also prefer investments with a social impact. By offering more diversified and risk-less portfolios and including more socially-conscious investment options financial professionals could catch the interest of more female investors.

Financial services need to take responsibility for attracting more female investors and catalyzing change in the financial industry by adjusting their portfolios to the needs of a woman. At the same time, women need to lose the fear of investing their money by drawing attention to the importance of investing and seeing its potential rather than its risk.  Acquiring financial literacy needs to be a goal that every woman should set herself. This will not only have the short-time impact of being more confident when it comes to financials, but will also pay off in the long turn with hopefully great financial returns!

If you are interested in learning more about investing your money, here is a great guide for getting an overview into the financial landscape and actually start investing. Also, check out our F-LANE venture, FinMarie, an online investment platform made by women for women: http://finmarie.com/.

Article by Christina Leonhart