2021 Grand National: Why horses for courses applies to the investment world
With a history dating back more than 180 years, the Grand National is undoubtedly one of the biggest...
Today is the 110th anniversary of International Women’s Day. The event dates back to the early 1900s, when it was originally established as National Women’s Day by the socialist movement. But it wasn’t until it was adopted by the feminist movement in the 1960s that it gained international attention.
Most countries around the world use International Women’s Day as a day to celebrate womanhood. Other countries use 8 March as a day of protest to facilitate change. And more than 20 countries have marked International Women’s Day an official holiday. In China, women are often allowed a half-day off from work and receive special treatment in general at work and home.
In recent years, to focus the growing global discussion, the UN has focused on various themes. 2019 was ‘think equal, build smart, innovate for change,’ 2020 was ‘I am Generation Equality.’ This year, the theme is ‘#ChooseToChallenge’.
“Female talent remains one of the most under-utilised business resources.” – World Economic Forum
According to the website, “a challenged world is an alert world. Individually, we’re all responsible for our own thoughts and actions – all day, every day. We can all choose to challenge and call out gender bias and inequality. We can all choose to seek out and celebrate women’s achievements. Collectively, we can all help create an inclusive world.” For us at FundCalibre we’re challenging you to call out the inequalities of women and money.
Get this: 61%* of women would rather talk about their own death than about money. What a horrible statistic! I’d argue a lot of this hesitation comes from a lack of confidence and education.
87%* of women say basic financial education should be part of the school curriculum. Without formal education you rely on general exposure. So if women aren’t talking about money, are they reading about it? Probably not. When’s the last time you picked up Cosmo and saw personal finances covered? In fact, a study that analysed the top 17 women’s magazines and found that less than 1%* of content was about personal finances.
Another study by Starling Bank, which looked at 300 financial articles aimed at women, found that 65%** referred to women as “excessive spenders.” 71%** encouraged women to find bargains and coupons and control splurges. Conversely, articles aimed at men told them to dare to invest and spend to increase their power.
It’s just one of the reasons that financial education is so important.
Societal gender norms still believe that women are supposed to focus on caring for their children and should be responsible for the majority of unpaid work. Women spend an average of five months a year on unpaid labour like child care and domestic chores. When they have career ambitions they’re often criticised for not prioritising a family.
Yet, starting a family penalises women too. The motherhood penalty was coined by sociologists who argue working mothers encounter systematic disadvantages in the workplace. Generally, women with children tend to have lower wages than women without children thanks to maternity leave and career breaks. In the 12 years after having her first child, a woman’s hourly pay rate falls steadily to 33%* behind a man’s. Studies have also found that employed mothers account for the largest part of the gender wage gap. And this penalty has not shown any signs of declining over time.
The gender wage gap is a complex issue with many inter-related causes including direct discrimination or unconscious bias, such as the motherhood penalty and gender stereotypes. But regardless, it is prevalent. The latest research suggests that women earn £7,280 a year less than men. The knock on effect of this is that women will need to work an extra 4 years to enjoy the same standard of retirement as their male counterparts.
Not only do women tend to work in lower paid fields, but they also reach their peak earnings earlier at age 44. Men keep climbing for much longer and reach their peak earnings at 55. The World Economic Forum estimated the women’s economic gap will finally close globally in 2,277^ – that’s still 256 years from today! But investors can help.
Research shows that companies with more women in executive leadership positions are more profitable^^. But this gender diversity is important from the ground floor through to the executives to help close the gender pay gap. Only 37 of the CEOs on the Fortune 500 list are women***…and that’s a record high!
Considering gender in your investments has the potential to boost your returns. Consider looking for companies that are founded, run or funded by women. Just last month, Whitney Wolfe Herd, founder and CEO of Bumble, became America’s youngest self-made woman billionaire at age 31. And she did it, with a baby on her hip.
P.S. If you wanted another reason… According to a 2018 study, gender equality could increase global GDP by up to $28 trillion by 2025^^^. I think we can agree that benefits everyone.
*Source: Women and financial wellness: beyond the bottom line, AgeWave & Merrill Lynch, 2019
**Source: The way we speak to women about money is sexist & needs to change, Refinery29, 2018]
***Source: Fortune 500 list of companies, Fortune Magazine, August 2020
^Source: World Economic Forum, Global Gender Gap Report, 2020
^^Source: Diversity wins: how inclusion matters, McKinsey, May 2020
^^^Source: Growing economies through gender parity, Council on Foreign Relations, 2019