The gender wealth gap is said to be closing but truth be told it’s a slow moving and rather risky success story.
Nearly 75% of millennial women in the United States, ages 25 to 40 years old, are now investing outside their retirement accounts, according to findings from Fidelity Investments’ 2021 Women and Investing Study, which showed unprecedented growth during the pandemic.
Despite the findings, the same study also noted that whilst younger women have made strides, there’s still a lack of investing confidence.
Only 35% of women feel “confident” their non-retirement savings are appropriately invested.
Social media influencers, the rise of digital apps and currencies and greater financial independence are just some of the reasons why there’s been an increase in activity among young female investors.
That said, there’s also evidence in Australia that young women are more likely to seek out additional educational information and social support to start investing themselves, even into riskier assets like crypto currencies.
25-year-old Katie Ware is among a growing number of female investors who once eyed property as the ultimate investment goal. She’s now investing in crypto.
“The last 18-months has significantly altered my chances of affording a house before I’m 30.
“I originally invested minimum amounts in the fear of missing out on a new technological wave but since then, I have realised that cryptocurrency can be a way to build my wealth in the long-term and therefore my investments have increased,” she said.
Investing in cryptocurrencies is also becoming popular because it is generally cheaper to buy digital currencies than shares.
This is despite there being a higher risk due largely to the unregulated nature of digital currencies compare to other assets.
Indeed some women have even started using crypto as a stepping stone to help them supplement income and narrow the wealth gap in the property market.
As it stands more men invest in shares and property than women, various studies from the Australian Securities Exchange and Australian Bureau of Statistics show. Women also retire with about 30% less in their retirement savings than men.
The latest Financy Women’s Index shows that for young women the outlook for closing the wealth gap has become more complicated because of the pandemic.
Women aged under 25 years have seen a 17% drop in full-time employment numbers since January 2020, that’s nearly three times that of similarly aged men and significantly more than any age group and gender since the pandemic started.
If we look at both part-time and full-time job numbers, between September 2019 and September, women under 25 years have been largely left out of the sporadic employment recoveries that have occurred in and out of COVID lockdowns, the Index for the September quarter shows.
With less income coming in and inflation expectations, as measured by Roy Morgan, above the long-term average among women, risk appetites are being rewritten and property isn’t on the main menu.
Loans to first home buyers, which are typically aged between 31 and 33 years, fell 5.6% in September and are 27.1% lower compared to September 2020, according to the Australian Bureau of Statistics.
“Whilst I am looking to diversify my portfolio, I will continue to invest in cryptocurrency as I can genuinely see the need for a decentralised currency in a future that is heading towards complete digitalisation,” said Katie.
“I don’t own my own property however, it’s something I am working towards.
According to new research by digital currency exchange, BTC Markets, women like Katie reflected the fastest growing group of investors in crypto trading over the 2021 financial year.
The Investor Study research showed a 172% increase in female user growth compared to growth of 79.5% for males.
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