Future Wealth Accumulation for Women: Insights and Opportunities
Here's a revamped version of the article on gender wealth disparity, designed to be more engaging, straightforward, and slightly informal. I've integrated some enrichment data to provide additional insights, but kept it to 15% or less of the total content.
By 2030, ladies in the U.S. will control a staggering $30 trillion in assets—the so-called Great Wealth Transfer. This exciting shift offers us a chance to confront and erase the gender wealth disparity. However, it's crucial to acknowledge that women still face numerous financial barriers.
According to the Bureau of Labor Statistics (BLS), in 2024 the median weekly earnings for full-time female workers in the U.S. were $1,083, which represented 83.2% of the $1,302 median for men. Sadly, that gap is even more glaring for Black, Hispanic, and Indigenous women. For example, Black women earned $978, while White and Hispanic women made $1,094 and $844, respectively.
Interestingly, despite these income disparities, 90% of women express feelings of financial stress. This anxiety can affect their economic behavior and their ability to build wealth.
Leveling the Financial Playing Field
To build wealth, close the gender wealth gap, and rectify financial disparities, women need three key elements in their corner: comprehensive financial education, increased investments, and equitable access to capital as essential components.
Gaining Financial Literacy
Over the past decade, women's financial literacy has significantly improved. In 2014, only 30% of women globally demonstrated basic financial literacy, compared to 35% of men, according to the Global Financial Literacy Excellence (GFLEC). By 2024, in the U.S., 52% of women had achieved financial literacy, though a gap remained between them and their male counterparts (62%).
However, financial literacy alone may not be enough. Chloe McKenzie, a wealth justice activist and researcher, pointed out that conventional financial education often ignores the psychological and behavioral factors influencing financial decision-making – factors that have a significant impact on women, considering the disproportionate financial anxiety they experience due to systemic barriers, past economic instability, and income disparities.
Striking the right Balance
To ensure long-term financial confidence, success, and stability, it is necessary to consider more than just financial education at the individual level. In addition to the usual pillars of budgeting, saving, borrowing, and investing, it's crucial to understand the deep-seated emotional and psychological aspects triggered by past financial hardships—what McKenzie refers to as "financial trauma."
Research by Experian suggests that 68% of U.S. adults have suffered from or are currently experiencing financial trauma, with women disproportionately affected. This trauma can lead to avoidance behaviors, chronic underinvestment, and hesitancy in wealth-building strategies—even among financially literate women.
Investing to Build Wealth
Recognizing the potential of compound interest, more women have embraced investing as a key weapon against financial insecurity.In 2021, women were significantly underrepresented in the investor space, with only 48% participating in the stock market compared to 66% of men. By 2024, the number had risen to 71% of women investing. While progress has been made, a confidence gap persists—with only 26% of women identifying as "investors."
Awareness, changing narratives, and a more inclusive educational message have been instrumental in empowering more women to become investors. Tori Dunlap, author of the New York Times bestselling book "Financial Feminist," emphasizes that accessible education and representation are vital to closing the gap: "When women have access to clear, judgment-free investing resources and see other women as confident investors, they feel more confident doing it themselves."
Entrepreneurship: A Strategic Wealth-Building Approach
Currently, women own 42% of all businesses in the U.S., generating $1.9 trillion in revenue annually. As Mariela De La Mora, an entrepreneur and leadership coach for women of color, said, "Entrepreneurship has proved to be a strategic tool for me to build wealth and break free from what felt like a glass box in the corporate world."
Despite the growth of female entrepreneurship, women still face significant funding challenges. In 2023, startups founded exclusively by women received only 2% of the total venture capital funding in the United States, according to the World Economic Forum. Nevertheless, there have been positive developments, such as the SBA's commitment to expanding women's entrepreneurship by offering over 15,500 loans totaling $5.6 billion for women-owned businesses in 2024.
In conclusion, while the path to wealth equality isn't easy, women have made great strides in the past decade. By focusing on financial education, investing, and entrepreneurship, we can ensure that the opportunities of the Great Wealth Transfer are accessible to all women—and that we build and sustain wealth for generations to come.
- By 2024, Elisabeth might be intrigued by the reactions of women, including herself, as the number of financially literate women in the United States is projected to increase to 52%.
- In 2024, ForbesWomen readers could potentially find insight in the perspective of Chloe McKenzie, a wealth justice activist, who suggests that financial literacy alone may not be enough to combat the financial anxiety women often experience.
- As the Great Wealth Transfer unfolds by 2030, the severance in wealth between genders could potentially become a talking point among women, especially given the disparities in median weekly earnings between races noted by the Bureau of Labor Statistics in 2024.
