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The Women’s Guide to Maximizing Wealth


In 1990, a friend asked me if I wanted to attend a National Association of Investors Corp. (NAIC, now called Better Investing) conference to learn about starting an investment club. I said, “sure,” and we went on to form a women-only club. There was a good reason for that. Most of our members were women aged late 30’s – 70 years old; many had no investment knowledge but were eager to learn; and none of us wanted men “taking over” and telling us what to do!

We did very well. As president, I made sure we had training every month, and I spent a lot of time helping these women learn the fundamentals of investing. But they put in the work. Eventually, we had 20 or so members—all who wanted to learn about investing. We did so well that every year, someone’s husband or boyfriend wanted to join, and we always voted a resounding no!

As you might imagine, that created some havoc in our personal lives. The solution was that I started an additional, co-ed club, and, not surprisingly, the majority of the members were men. (My women friends still did not want to comingle!) That club also was very successful—but our returns were never as good as the “women-only” club.

That disparity of returns did not belong just to our clubs; several national surveys confirm that women, on average, outperform men’s investment gains.

Between 1991 and 1996, The University of California reviewed 35,000 brokerage accounts and found that women outperformed the men by 0.94% every year.

Later, in 2018, financial services firm Fidelity reviewed more than 8 million investment accounts. They discovered that women not only save 0.4% more than men, but their investments also earn 0.4% more per year than those of men. That may not sound like much of a difference, but Fidelity’s math shows that over a lifetime, “using a 22-year-old starting out with a salary of $50,000 a year, a woman investor will outpace her male counterpart by more than $250,000.” That may mean the difference between eating beans and hot dogs regularly in your golden years, versus having a nice juicy steak once a week!

Finally, in 2020, a Goldman Sachs survey found that 43% of women-managed mutual funds outperformed their benchmark in 2020, compared to just 41% of those managed by men.

And in down markets—such as in 2015—on average, women lost 2.5% of their stock portfolio value, while men lost 3.8%.

Why the Difference?
There are several reason why women’s investment gains typically outpace those of men, including:

Women don’t trade as much. Fidelity reports that “men are 35% more likely to make trades,” which means they are paying more fees which, in turn, reduces their gains. A Wells Fargo study showed that single women trade 27% less frequently than single men. And Robo-advisor Betterment reports that women change their asset allocation 20% less frequently than men. In a survey of their investment accounts, Vanguard said women trade 40% less frequently than men.

The University of California study determined that this excess of trading reduced men’s investment gains by 2.65% a year. Interestingly, the hit to the returns of women who were considered traders, was just 1.72%.

Women save more money than men, as I mentioned above. Further, Fidelity found that while women save 0.4% more than men on an annual basis, when it comes to our retirement accounts—such as 401(k)s and IRAs—we save nearly 1% more.

Women don’t like risk as much as men. We tend to be more conservative investors, don’t put all our funds into equities alone, tend to diversify our portfolios more by using age-related, target-date funds, and make more automatic deposits, ensuring a constant influx of investing funds.

A study by WIM Analytics found that women take 94% of the risk that men take. And only 5% of women take much risk at all.

That, unfortunately, is not really enough for most of us, as playing it completely safe will drastically limit your returns. There’s a balance between risk and reward—for all investors, depending on your personal risk profile and investment strategy. If you invest in equities, history tells us that the S&P 500 has—on an annual basis—returned on average 9%. If you limit yourself to just extremely conservative fixed income investments, like bonds, over a 30-year period, you’re gains will probably add up to just half of that. Which is why most investment professionals recommend a mix of equities and other assets.

investing mindset

Women are less impulsive. Women don’t react to market or stock fluctuations as much as men. As many of us are long-term planners, we tend to view our investments that way. I can’t tell you how much more often a man in our co-ed investment club would recommend acting on a stock with very little information—often just a “hot” tip. Conversely, the women in that club and our women-only club always insisted on additional research before making an investment decision.

As I always say, those “hot” tips are good for one thing only—an idea that needs to be further researched to determine if it fits into your personal investing strategy.

Women Can do Even Better – What’s Holding us Back?
Women could see even better investment returns but there are a few societal mores that often prevent us from maximizing our gains.

Women have less confidence in our investing and financial abilities and skills. This dates back to puberty. A Time magazine study of 1,300+ girls from ages 8 to 18 and their parents discovered that “between the ages of 8-14, girls’ confidence levels drop by 30%.” Boys also see decreased confidence at these ages, but by age 14, “girls are hitting their low, and boys’ confidence is still 27% higher.”

That lack of confidence persists into adulthood for women, although often, confidence tends to rise with our age. However, the statistics are dim. According to Fidelity, just 9% of women think they are better investors than men (despite the proof to the contrary!). And Merrill Lynch says that just 52% of women have confidence that they can manage their own investments, compared to 68% of men. FINRA’s survey was even worse. That survey concluded that while 49% of men feel confident in making investment decisions, that number goes down to 34% with women.

But as I said, sometimes age helps. A report from U.S. Trust found that millennials (born between 1981-2000) are 46% confident in their investing skills; Gen X (born between 1965-1980), 52%; baby boomers (born between 1946-1964), 54%; and the silent generation of women (born between 1927-1945), 60%. So, there’s some hope for us!

Part of the lack of confidence is due to limited exposure to financial and investing education. I had a mother who ran the finances in our household, so I was lucky. In my years running banks I personally experienced dozens of instances of widows trying to locate their assets following the deaths of their husbands with no idea where to start. And once they found the assets, they lacked the tools or knowledge to manage them. Now, that’s a shame!

Another interesting point—I also started an investment club for gifted middle-school children, most of whom were boys. They were all from fairly wealthy families, and their parents had started their investment education at a very young age. But again, the demographics were mostly boys—not too many girls were afforded the same opportunities.

Women experience more fear around finances. Because women have less exposure to managing finances they are often too frightened to wade into the investing waters. I’ve heard from many of my professional friends—doctors, lawyers, and CEOs—who have spouted plenty of excuses as to why they don’t handle their own investments, including:

  • I’m not good at math
  • My husband (father, brother-in-law, etc.) handles all that
  • I don’t have enough money to invest
  • I don’t have time to learn about investing
  • I’m not interested

And while you would think that younger women are more financially savvy, that, apparently, is not the case. According to SoFi and Levo League, 56% of millennial women admit that fear holds them back from investing. That’s really too bad, as millennials, aged 21 - 40, have a long runway to retirement during which they could be saving and investing.

Cost of a wedding

This fear of investing significantly limits the accumulation of wealth. While about 25% of women are involved in the stock market, they also keepa whole lot of cash around. BlackRock reports that the portfolio of the average woman is 68% in cash. To that I say, “what?”

I know from experience you can learn how to be a good investor. In my first investment club, those women had never bought a stock; they didn’t balance their checkbooks; and they didn’t know how to calculate a percentage gain. If they can learn that (in a short period of time) and ultimately, become very successful investors with an investment club portfolio that today runs into the hundreds of thousands of dollars, so can you!

Women make less money than men, on average, so we have to make our money work harder! Last year, updated its gender inequality study, reporting that women earned about 82% of the wages of men. That’s $0.82 vs. $1.00. Sure, that is an improvement—in 1963, that number was 59%. But it’s inequitable and it puts us behind from the start. That extra 18 cents compounds over a lifetime of working. And it’s just less money to invest, which limits our gains.

As we grow older, men’s salaries tend to move up—peaking at an average of $101,200 at age 55. However, women tend to reach their peak earnings at age 44, topping out at an average of $66,700. Now, that difference can drastically change how much money we end up with at retirement. And, in fact, it is estimated that the cumulative lifetime earnings gap between men and women is $1,055,000.

Women traditionally bear the cost of getting married. The Knot informs us that the average cost of a wedding today is $30,000. And that’s if you pay cash. But if you’re like most young brides, you’ll charge a good portion of those costs, which means you are going to rack up substantial interest cost. You know, you can buy a decent economy car for that, or make a meaningful down payment on your first house! If you happen to come from a family that can afford it, it’s traditionally the bride’s parents that foot the bill. That may be a wonderful gift, but it’s at the expense of assets that could continue to grow over time to be passed down in the future.

Women have children. reports that in 2020, the cost of raising a child until age 17 was $233,610 on average.

Women take time out to care for children. That tends to reduce our income by a whopping 39%. And maybe more. Here’s just one example from, depicting wages lost due to taking time off to care for children:

“Let’s consider life without COVID (please!) in which a 28-year-old woman is doing some advance thinking, and figures she might take off two years starting at age 35 to have a kid. She started working at 22, and right now earns $60,000, and is contributing 10% to her 401(k) and her employer kicks in a 3% match. Those two years off (at 35 and 36) translate to a loss of around $330,000.

Here’s where it gets big: If she stays out for five years, which many parents of young children do, the total financial loss over her lifetime is $900,000.”

That’s frightening, isn’t it? Here’s a link to their calculator, so you can compute how opting to temporarily leave the work force may impact your future savings.

women with kids

men with kids

Women are often financially responsible for the care of our elderly parents. The average price of an assisted care facility in the U.S. is $4,000 per month (the range is $2,844 to $9,266, according to And a skilled nursing facility will set you back from $153 to $963 per day. They offer a cost of care calculator for you to find costs in your area of the country.

Women bear the cost of getting divorced. According to one report from the U.S. Government Accountability Office, women’s household income fell by 41% following a divorce or separation after age 50, while men’s household income dropped by only 23%.

Women live an average of five years longer than men—80.5 years vs. 75.1. And during those extra years, we will probably see our healthcare costs climb. Consequently, our money has to last longer, according to the CDC.

Women’s ultimate financial goals fall short of the goals set by men. It turns out that our goals are not all that different than men’s: vacations, education for our children, eldercare for our parents, and a secure retirement. Yet, a Mylo Financial Technologies study showed that men’s financial goals, on average, are double those that women set. It’s true that goals should be realistic, but in this case, it’s important to aim for—and to plan for—a much more substantial financial goal than we do now.

How to Overcome the Hurdles to Build a Bigger Nest Egg
Those statistics sound a bit depressing, don’t they? However, it’s not too late to kick your finances into high gear. There are some very practical steps that you can take.

Learn as much as you can about money. Before you dive in, you need to determine what you know and what you don’t know. So, first step, figure out your financial IQ. There are many websites with such quizzes. I would recommend you find a few, take them, and then decide where the holes are in your financial education. AARP and CNBC both offer quizzes that can help you get started.

Next, it’s time to learn!

In today’s world, there’s lots of investment education available. Here at Financial Freedom Federation and our sister site Cabot Wealth, we offer scads of educational articles.

If you are looking for some hands-on learning and would feel more comfortable joining a group of like-minded investors, consider starting or joining an investment club. These clubs focus on beginning investor education. To find one in your area, go to Better Investing (formerly NAIC) was founded in 1951 and has helped thousands of investment clubs get started. I have had a lot of experience with them; all of my clubs have been chapters of Better Investing. They do a fine job of educating investors.

There are numerous investing books that are helpful. Anything by Peter Lynch, the genius who kick-started the Fidelity Magellan Fund in 1977. At that time, the fund had a mere $18 million in assets. By the time he left 13 years later, it had grown to more than $14 billion in assets, and sported a 29% annual return. I’ve been a long-time fan of Lynch and his books Beating the Street and One up on Wall Street remain two of my favorites.

I would also recommend The Intelligent Investor by Benjamin Graham, Warren Buffett’s mentor. Graham is also the co-author, with David Dodd, of what I consider the securities industry bible, Security Analysis. That book is my all-time favorite, but it is a huge volume, and you may want to defer reading it until you have a bit of investing experience.

The other three books are suited for investors of any experience level.

By the way, I’m working on a comprehensive list of my favorite investment and financial books for our Financial Freedom website. As soon as I have it completed, I’ll shoot you an email.

Negotiate a higher salary. If you don’t ask, you don’t receive, in most cases. An AAUW survey found that just 53% of women felt confident in negotiating a salary, compared to 61% of men. But a Harvard study reported that if women are armed with objective information about the salaries of colleagues and peers in the same industry, they are actually better at negotiating than men. That’s no surprise, since as I mentioned earlier, we like to do our research!

So, if you’re ready to see if your pay is comparable to your cohorts (so that you have a base from which to negotiate), here are a few sites to consult:

  • (includes company reviews and employee feedback)
  • (for new grads)
  • (data from the U.S. Department of Labor)
  • (includes cost of living analysis and career salary potential)
  • (Bureau of Labor Statistics)

Start saving and investing early. That way, you can take advantage of compounding. This graph from paints a great picture:

compound interest

Here’s the back story:

“Michael saved $1,000 per month from the time he turned 25 until he turned 35. Then he stopped saving but left his money in his investment account where it continued to accrue at a 7% rate until he retired at age 65.

Jennifer held off and didn’t start saving until age 35. She put away $1,000 per month from her 35th birthday until she turned 45. Like Michael, she left the balance in her investment account, where it continued to accrue at a rate of 7% until age 65.

Sam didn’t get around to investing until age 45. Still, he invested $1,000 per month for 10 years, halting his savings at age 55. Then he also left his money to accrue at a 7% rate until his 65th birthday.”

They each saved exactly the same amount—$120,000, during a 10-year period.

But their ending nest eggs were dramatically different:

  • Michael, $1,444,969
  • Jennifer, $734,549
  • Sam, $373,407

The difference was due to starting early and enjoying the magic of compounding, which is simply your money making more money.

If you didn’t start early, there’s no time like the present to begin. And if you have younger relatives, encourage them to begin saving and investing right now!

Take a little more risk to boost your investment returns. Of course, be cautious; continue to do your research; but if you allocate most of your portfolio to conservative investments just so you sleep a little easier, your overall returns may just be so-so. Consequently, to boost your gains, consider carving out a small portion of your portfolio for more growth stocks that may offer some spectacular returns.

And the younger you are, the more risk you can afford, so if that’s the case, I recommend that you make your portfolio equity-heavy so that you can maximize your returns over time.

Set a tangible financial goal. Then, step-by-step, plan out how you are going to achieve it. Start with what you are saving/investing for, come up with a specific, reasonable (but stretch) goal, and make a plan as to how you are going to accomplish it. Create both short- and long-term goals. And celebrate when you reach those milestones! Each time you get a raise (or a windfall), instead of spending it, invest it (or at least part of it). And keep in mind that your goals will most likely change as you age, so be flexible.

Part of your goal-setting process will include creating a budget. After all, if you don’t know where your money is coming from and where it is going, you will not be successful in setting or achieving your ultimate goals. Along with your budget, it’s imperative to keep debt to a minimum.

Build an emergency fund. Traditional thinking was to set aside 3-6 months of living expenses in a liquid (not investment) fund. In today’s COVID-19 world, you might want to double that time frame. If you have an emergency fund, you’ll be ready for any temporary interruptions to your income or unexpected expenses, and you won’t have to take that money out of your regular savings/investment funds to meet that need.

Women are way behind men with this essential step. Last year, a MetLife survey found that 55% of women and 44% of men are living without this safety net.

Invest for retirement. There are many, many investment retirement options today, including IRAs, 401k’s, SEP’s, etc. And most of them offer some form of payroll deduction, making it very easy to “save it before you see it.”

If you think you’re going to be okay depending only on Social Security in your golden age, think again. This year, the average monthly benefit is $1,543, which would barely cover insurance, medication, utilities, and food—much less a mortgage or rent payment. And sadly, according to the National Women’s Law Center, in 2019, 10.3% of women, aged 65 and older lived in poverty. The rate for men in the same age group was 7.2%.

Reconsider paying for your children’s education. According to U.S., “the average cost of tuition and fees for the 2020–2021 school year was $41,411 at private colleges, $11,171 for state residents at public colleges and $26,809 for out-of-state students at state schools.”

College-bound seniors do have other options (besides mom and dad) in paying for their educations:

  1. Student loans come in many varieties and will require a dedicated effort to discover and dissect which ones may be of value to you and your children. This site lists the Top 10 student loans.
  2. Scholarships are plentiful, but may require a lot of research. But if you are diligent, you can find scholarships for almost anything—red-haired children, relatives of Realtors, specific courses of study, and yes, even women (especially in the STEM fields)! A couple of good sites to get started are org and
  3. I worked my way through college, and so did millions of other folks. I was fortunate to work for a company that paid 50% of my college tuition, and yes, there are still businesses that do that.

If you opt for a professional financial advisor, do your research carefully. Start with your friends, family, and colleagues; ask them if they have a trusted advisor. If not, U.S. News has a list you can consult. So does the National Association of Financial Advisors,. You can also check on for any violations by specific advisors. That will direct you to the SEC site for state registered investment advisers or the individuals who work for them. Be very careful, and if you do find someone you wish to work with, start slow—don’t give them all your money until they build trust.

Women and Money—a Bright Future
Despite the challenges we face, the prognosis for women and our money is excellent. According to, from 2016 to 2019, women accumulated wealth at a compound annual growth rate (CAGR) of 6.1%. And as you can see in the graph below, that rate goes up to 7.2% by 2023.

In fact, every year we are adding some $5 trillion to the wealth pool globally—at an accelerating rate. And one-third of the world’s wealth is now under our control.


Part of that wealth accumulation is due to the gradual changing in women’s attitudes about money.

A recent Visa study found that:

  • 57% of millennial women and 52% of Gen X women associate money with independence
  • 76% of millennial women and 78% of Gen X women associate money with security
  • 62% of women said they wouldn’t quit their job, no matter how much money their partner earned
  • 1 in 2 women believe they aren’t fairly compensated at work

I love this “awakening”! We’re starting to take responsibility for our financial futures and Financial Freedom, so let’s take the necessary steps to “go all in,” plan, save, and invest, so that we can maximize our wealth—for us, our children, and grandchildren.

P.S. For more information on many of these topics, please consult our Financial Freedom Federation website. I have written extensively on budgeting, goal-setting, retirement, etc.