For decades, investing was often perceived as a male-dominated field, but today, women are increasingly taking control of their financial futures. While progress has been made, women still face unique challenges when it comes to wealth-building, from the gender pay gap to career breaks for caregiving. However, studies show that when women invest, they often outperform men in the long run—yet they invest less frequently and more conservatively.
So, what is holding women back from investing at the same rate as men, and how can financial education, confidence, and strategy help bridge the wealth gap? This article explores the challenges, advantages, and strategies for women looking to take charge of their financial future.
The Gender Wealth Gap: Why Women Invest Less Than Men
Women face structural and behavioral barriers that impact their ability to invest and accumulate wealth over time. One of the biggest challenges is the gender pay gap, which directly affects how much money women can invest:
- In 2024, women globally earn about 20% less than men on average for the same work.
- In the European Union, women’s lifetime earnings are 30-40% lower than men’s, partly due to career breaks for caregiving.
- A study by UBS found that only 23% of women globally take the lead in long-term financial decisions, compared to 49% of men.
This lower income, combined with longer life expectancy (women live on average 5-7 years longer than men), means that many women enter retirement with significantly less wealth than their male counterparts.
Women Are Actually Better Investors—So Why Aren’t They Investing More?
Research consistently shows that women tend to outperform men when they invest, despite being more cautious.
- A Fidelity Investments study found that, over a 10-year period, female investors earned 0.4% higher annual returns than men on average.
- A Wells Fargo report showed that women trade 45% less frequently than men, which results in fewer impulsive decisions and better long-term performance.
- Women are more likely to diversify their portfolios, reducing overall risk and making them less prone to market volatility.
Despite these advantages, many women feel less confident in their investment knowledge. The same UBS survey found that 61% of women say they would rather delegate investment decisions to a partner or financial advisor, compared to 34% of men.
This confidence gap means that many women keep too much money in cash, missing out on the power of compounding returns.
How Women Can Take Control of Their Investments
While financial literacy is improving, there is still a need for more education and encouragement for women to invest earlier and more consistently. Here are some key strategies to close the wealth gap and maximize financial growth:
1. Start Investing Early—Even in Small Amounts
Many women hesitate to invest because they believe they need a large sum of money to start. But thanks to fractional investing and ETFs, anyone can begin investing with as little as € 50 per month.
For example, investing € 200 per month in an S&P 500 index fund with an 8% annual return could grow to over € 350,000 in 30 years—significantly more than keeping cash in a savings account.
2. Use a Diversified and Long-Term Strategy
Women already have a natural advantage in investing due to their preference for long-term, diversified portfolios. Sticking to a simple strategy, such as:
- 70% stocks (ETFs, blue-chip stocks)
- 20% bonds (government, corporate bonds)
- 10% alternative assets (real estate, REITs, or commodities)
This approach reduces risk while maximizing growth potential over time.
3. Take Advantage of Retirement Accounts and Tax Benefits
Women need to prioritize retirement savings, especially since they tend to live longer. In Europe, private pension funds and tax-advantaged accounts (such as PIR in Italy or ISAs in the UK) offer excellent opportunities to grow wealth efficiently.
For example, a woman who invests € 300 per month in a pension fund with a 6% return could accumulate over € 200,000 by retirement, compared to just € 108,000 if that money remained in a standard bank account.
4. Join Women-Led Investment Communities
One of the best ways to build confidence in investing is to engage with financial communities. Platforms like Ellevest, Girls Who Invest, and Female Invest are designed to help women learn about the stock market and gain financial independence.
Being part of a community reduces the intimidation factor and provides access to resources tailored to women’s financial challenges.
Breaking Financial Barriers: The Future of Women and Investing
The landscape is shifting, and women are becoming more active participants in the financial markets. With better financial education, increased workplace equality, and more investment platforms catering to women, the opportunity to close the wealth gap has never been greater.
By starting early, investing regularly, and embracing financial independence, women can secure their futures, build generational wealth, and break away from outdated stereotypes. The key is simple: confidence, consistency, and taking action today.
