Women and Money

Long gone are the days when a woman needed her husband's or father’s permission to get a mortgage, attend college or even vote. Thanks to the struggle of brave women throughout the centuries, society has changed and now with burgeoning careers, earning potential and a spirit of independence, plenty of women are content to maintain their autonomy.

However, despite milestones and advancements in the modern age for women’s equality, there are still large gaps and room for improvements. Here’s a look how women are faring in terms of work and finances:

(I) Careers

According to a report by Bloomberg Businessweek, women with MBAs typically face a gender-based pay divide that starts as soon as they graduate, and it plagues them throughout their careers. Part of the reason cited for women  earning less is that they were more likely to go into fields with below-average salaries, such as consumer products and advertising. But even within the same fields, women were paid less than men. Indeed, 17 of 22 industries that hired MBAs last year offered women less money.

There are others who argue women make less because they opt for lower-paying jobs than men, work fewer hours and interrupt their careers to have children. When you account for those factors, they say, the pay gap all but disappears.

It may be true that over the course of their lives, women are more likely to make choices that may prioritize other areas; but therein lays the problem. Choices, such as maternity leave, for example - should not “cost” them so much during their careers.

However, more women are making their mark in various industries, such as finance and tech.  Globally, countries turn to Christine Lagarde, Managing Director of the International Monetary Fund (IMF) to bail them out in times of crisis, while Ho Ching controls Singapore’s state investments at Temasek Holdings. So why then do women like Marissa Mayer face such scrutiny when she first announced that she was expecting twins, and is now possibly fighting to keep her post at Yahoo?

In Mastercard Index of Women’s Advancement (MIWA) 2015,  Singapore is placed fourth in gender equality,  just behind New Zealand, Australia and the Philippines. The survey among 16 Asia-Pacific nations studied the socio-economic standing of women on three components: capability, employment and leadership.

Singapore was ranked seventh in the ‘employment’ criterion, comparing the rates of workforce participation and regular employment among men and women.

(II) Money and Investing

While saving and investing basics are the same for everyone, there are tremendous gender differences in temperament and attitude towards money. And some of the very specific and unique challenges that women face – for instance, interrupting their careers to have children or longer life expectancy – may require a different approach.

In surveys, women have also expressed that they are a lot more conservative than men when it comes to managing money, since they traded less often, making fewer bad bets and incurring fewer fees. Having said that, men’s investments can actually suffer from overconfidence. Male investors tend to swing for the fences, thinking they can beat the market, resulting in more trading in and out of the market, which may not really serve them well.

While men and women have different views and strengths in terms of managing money, it doesn’t mean one method (or gender) is better than another. It’s a matter of perspective and playing to inherent strengths and preferences.

Singaporean Jenny Lee is the first woman to make it to the global top 10 on Forbes “Midas List” of leading venture capital investors. She went on to make millions betting on China’s software and internet boom, including buying into Xiaomi five years ago when the company had only a prototype of the smartphones that turned it into a US$45 billion enterprise. In the male-dominated world of venture capital, she is as much at home with the guys on the golf course as she is having dinner with entrepreneurs with their family and kids.

With women being more empowered, how are they managing their money? Some examples are alternative spaces, as discussed in my previous blog.

“She works hard for the Money…”

Today’s women have the same access to investing and investment advice as men. And accumulating resources for longer lives and higher health-care expenses requires substantial savings, coupled with reasonably aggressive investing – both of which women are easily capable of. However, as with all things financially related, it can be slightly overwhelming, so seeking a little professional advice for clarity never hurt anyone, especially given that some women still do face gender bias at the workplace and as the song goes,  “...works hard for the money.”

If you’re interested in starting or expanding your investment portfolio, drop me a line and I’d be more than happy to assist.