💫 Money myths, glass ceilings, and equity equality

Happy Women’s History Month! 🎉

Today, we celebrate all the incredible accomplishments women have made in history. Accomplishments that have helped society as a whole — not just women. We still have a long road ahead of us but it’s important to pause and recognize how much has been done to get us to where we are today.

In honor of Women’s History Month, let’s talk about the truth with women and money by debunking some myths. And, following a pretty tough few days in tech and finance (you can find my colleague John’s take here), I hope this is a different type of history lesson.

Before we dive in, I’m going to give it to you straight: The narrative around women being bad with money needs to stop. It is false and harmful. The truth is that women have been systemically kept from money throughout history and have tirelessly fought (and still fight) for equality (something I mentioned in my first newsletter). Gender equality is better for everyone — not just women.

And, if you enjoy our newsletter, we'd appreciate it forwarding it on, or sharing it here. 🙏

📕 Let’s start with a quick history lesson.

The path to equality has been an uphill battle with some serious obstacles. Here are a few you that may surprise you.

💸 1963 - 60 years ago - Congress was just getting around to telling employers they need equal pay for equal work thanks to the Equal Pay Act of 1963. In other words, employers could not pay a woman less just because she was a woman. This was just 60 years ago! 🤯

💳 1974 - less than 50 years ago - Women were allowed to have credit cards in their own name (i.e. not attached to their husband) thanks to the Equal Credit Opportunity Act. Why was this a key event in women’s history? It’s because it allowed women to have access to credit and we all know in the US just how much mobility good credit offers someone. This meant women could get loans, mortgages, etc.

🤰🏽 1978 - less than 45 years ago - Congress passed a law that would prohibit employers from terminating employment for pregnant people thanks to the Pregnancy Discrimination Act. Prior to this, it was a common practice to fire women for being pregnant. Just when they need income and insurance the most... 😫

👶 1993 - 30 years ago - The Family and Medical Leave Act was signed into law which allowed workers to take up to 12 weeks of unpaid (🤦‍♀️) leave to take care of a newborn, their family, or themselves without fear of losing their job.

🙈 2012 - A study done by FINRA found that women pay roughly 0.5% more in credit card interest rates across the board. Imagine that interest compounded over time!

You can see just how recent (like, scary recent) some of these major milestones are.

And we are still battling against:

• The gender pay gap: Women make $0.82 for every dollar a man makes, and it’s barely budged for decades.
• Lack of support with raising children: “Other countries have social safety nets. The U.S. has women.” - Jessica Calarco
• The Motherhood Penalty vs the Fatherhood Bonus: Women are generally punished in their careers for having children whereas men are rewarded.
• Gender bias in healthcare: Doctors often take their male patients more seriously than female patients when it comes to pain and diagnoses.
• Global bias against women: This is not just a U.S. issue.

Sadly, the list could go on and on but stick with me because we’re getting to the good part: debunking myths!

💰Women tend to be better investors than men

It’s true! Women are more likely to make a plan and stick with it. Men are more likely to try to time the market and change their portfolio around which is risky and unlikely to work.

The challenge is that women are less likely to invest than men but, when women do, we do a better job. A 2021 analysis performed by Fidelity over a 10 year period found that women outperformed their male counterparts by 0.4%.

Sure, 0.4% may seem small in the short term. However, over the course of a longer period this can have a major impact on someone’s life. Say two people, Riley and Jordan, each inherit $100,000 and they invest it over a 30 year period. Riley has an average return of 8% and Jordan has a return of 8.4%. Riley would have about $1,000,000 at the end of 30 years and Jordan would have about $1,250,000! I don’t know about you but $250k would make a significant difference in my life! A 0.4% annual return advantage turned into 25% greater wealth over an investment lifetime, that’s the power of compounding small advantages over time.

One of my career goals is to get more women to invest and take charge of their financial lives. It makes me so happy to hear that more and more women are taking a seat at the investing table. There’s been a 44% increase of women investing outside of retirement and 50% of women say they are more interested in investing since the start of COVID. Yes!

There’s also evidence that suggests that women are more likely to work with financial professionals who can help them create a financial plan, take strategic investment risk, and help them get closer to their life goals.

👿 Women ask for raises just as often as men but are less likely to receive them

You heard that right! It is not true that women “just don’t ask” or “just don’t negotiate.” We are out there putting in the work! We just don’t get raises as often as men.

The sad truth, according to Harvard Business Review, is that “women who asked obtained a raise 15% of the time, while men obtained a pay increase 20% of the time.” While this may seem small, this has astronomical implications over the course of a woman’s career. The research has not caught up as to why this is the case. That said, we know gender bias exists and that career progress has an element of subjectivity.

😭 Women who outsource money management are likely to find a negative surprise when their spouse passes

More than half (58%) of women globally defer to their spouses for critical, long-term financial decisions. Surprisingly, millennial women are even more likely to defer to their spouse than women aged 50+ 👀.

When women are forced to manage the household finances after their spouse passes, a whopping 74% discover a negative financial surprise. 😯 This is why, according to a UBS study, “76% of widows and divorcees wish they had been more involved in long-term financial decisions while they were married, rather than trying to navigate them while coping with such significant life changes”.

The takeaway? Get both partners involved with the critical financial decisions. This brings me to…

🎙️ Talking about money with your partner is healthy!

We were all raised with different beliefs about money and different values. When you are in a partnership for the long run and you want a lifetime of happiness with your partner, you need to talk about money. And talk about it often!

According to the Washington Post, 78% of couples who talk about money every week say they’re happy. For couples who talk about money every couple of months, that percentage goes down to 60%. For couples who rarely talk about their finances, that decreases further to 50%.

If you don’t regularly talk about money with your partner and you want to get started, schedule regular money check-ins or money dates! Talking about money doesn’t have to be bland. Start by learning more about each other’s values and money goals. You’d be surprised to see how much more you can learn about your partner in these money talks.

For example, I really value security but I also value adventure. I have a personal savings goal that I was willing to put slightly on the back burner so that I could take a women’s ski class and enjoy my time outdoors. Sharing this with my husband gave him an understanding of where I was coming from and opened up a money conversation that brought us closer together.

👀 Women and equity compensation

I’m at Secfi, so of course I have to tie in equity compensation! Here are some stats:

Women receive significantly less — 15% to 30% fewer — stock grants than men. Furthermore, the average value of company shares held by male employees in 2018 was $104,902 while it was only $26,361 for women.

The interesting thing here is that women tend to hold on to their stock options longer than men and are better able to reap the benefits.

This is yet another example of how women are playing the game better on an uneven playfield.

Thank you to all the incredible women and our allies who have sacrificed so much to pave the way to a brighter future. A future where women are compensated fairly, have equal healthcare, feel supported in their careers, have support in raising a family, and so much more.

We see you, we celebrate you, and we are here to support you year-round. Cheers to you! 🥂

If you're interested in how Secfi can be a partner with you to help you with your financial goals, I’m proud to say that there are two female-identifying members of the Secfi Wealth team! Myself, and our Head of Wealth Operations, Kathleen Kalu-Anderson. We would love to chat with you (female-identifying or not!). Feel free to book a no-obligation discussion with Kathleen or myself.

Things we’re digging:

• 💲 Equal Pay Day was this past week on Tuesday. The date represents how far into the year a woman has to work to make the same amount as a man did the previous year. Basically it just means that on average women have to work about 2.5 more months to make the same amount as a man. Learn more here.
• 📉 Stripe’s raise & fall. Well, they managed one of the biggest funding raises of all time, but the price was a steep valuation cut at $50 billion, down from a peak of $95 billion, and less than the $60 billion expected. Look out for our analysis in the coming days.
• 🎥 And the Oscar goes to… Did your favorites win? I know some of my colleagues were partial to “Everything Everywhere All at Once.” Michelle Yeoh is the first Asian actress to win, and only the second to be nominated. Her co-star Ke Huy Quan was the first Asian actor to win best supporting in nearly 40 years. 🤯 Here’s to continuing breaking glass ceilings! 💪