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According to the Wall Street Journal, only 23% of women engage in long-term financial management. The number of women with investments in the stock market is half that of men, while 41% of women lack confidence in money management1.

Why does this matter?

Financial literacy is, of course, important to all. Knowing how to budget, save and create wealth helps to establish financial security and economic independence. Unfortunately, statistics show that female employees earn less than their male counterparts2 – and together with the financial literacy gap, it represents a biting reflection of women’s vulnerability in the economic dimension.  

 

If you’re a woman looking to achieve financial independence, here are 3 wealth management tips for you. 

Set financial goals and master your own fate

About 58% of women rely on their partners to manage their wealth3 including retirement planning and setting financial goals. This, unfortunately, leads to women being less proactive about their wealth. In the absence of someone to advise them or make decisions on their behalf, more often than not, the money invested by women does not yield any returns. 

 

If this is your financial situation, then the first step is to break this habit and plan your own financial future. If you’re at a loss on where to start, begin with these two basic categories: Set-up a retirement fund and start investing. Don’t let the fear of failure and the unknown stop you. Consult your partner or family members if you have to, but let the final decision be yours. 

Take calculated risks and start investing

The wealth conversation has traditionally skewed towards conservativesamong women – their approach to wealth management is to save while the opposite gender tends to take more risk when it comes to growing their wealth.

 

Nonetheless, everyone should invest, and here’s why: money depreciates over time. If you have a low risk appetite, then look for an investment instrument that suits you. Keeping your money in a basic savings account would be a bigger loss in the long-run from all the missed opportunities.

Get a (preferably female) financial advisor

Get sound advice from professionally certified financial planners or advisors, and try to choose a woman while you’re at it.

 

A female advisor will be able to relate to your personal journey and share the experience and unique financial challenges of being a woman. Plus, it’s been shown that women investors outperform men at their jobs5. This could be because a woman’s approach to investing can be more focused on what their life outcome will be like down the road, rather than talking numbers and products.

 

Virginia Woolf’s seminal essay 100 years ago, A Room of One’s Own, laid out the truth that a woman needs to be financially independent to be truly independent in other areas of life. For independent modern women, the answer to having a room of one’s own is still the same – financial empowerment.

 

Important Notes & Disclaimer

Sources:

 

1https://www.wsj.com/articles/womens-other-economic-gap-financial-acumen-11567432800

 

2https://www.thestar.com.my/news/nation/2019/11/24/the-gender-wage-gap-is-real

 

3https://www.cnbc.com/2019/03/18/women-are-more-likely-to-leave-money-decisions-to-their-spouses.html

 

4https://www.theguardian.com/lifeandstyle/2019/apr/08/why-women-need-to-stop-saving-their-cash-and-start-investing

 

5https://www.ft.com/content/f3835072-66a6-11e9-9adc-98bf1d35a056

 

This article is brought to you by CIMB as part of our ongoing efforts to raise the level of financial literacy amongst Singaporeans. Financial knowledge and understanding are key to making well-informed and meaningful financial decisions that will improve everyone’s well-being. This in turn, achieves CIMB’s purpose of advancing customers and society.