Flourish Wealth Management

What do Investing and Physical Training Have in Common?

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Susan decided to do something for herself after years of working in an office, raising a family, and focusing on other people. She wanted to get into better shape and knew the health benefits, specifically for women, of incorporating strength and resistance training into her exercise routine. Weight training makes bones denser and helps the body build muscle; since 80% of people suffering from osteoporosis are women, anything to help improve bone health with age is a good option.[i] After trying a few exercise classes and rotating through the gym equipment, she decided to raise the stakes and train for a triathlon. Triathlons involve running, biking and swimming, and are a challenging test of endurance for even the most seasoned athletes. Susan had a goal and she stuck to it, training in preparation for months. She gained muscle, lost inches and felt empowered. She completed the triathlon and started looking for her next challenge.

Men and Money

For a long time, weight training, endurance races, and other feats of strength were thought to be a male domain. But as the health benefits of strength and weight training became more accepted, along with increased social acceptance of women as competitive athletes, more women began to participate. Times Change. Like weight training, money management and investments were seen as a man’s job in a household. Men were seen as the breadwinners, the pension earners, and were usually in charge of the families’ savings. As more women have entered and stayed in the workforce, or are primary or head of household earners, the role of saving and managing a household’s finances has changed.

Women as Investors

Studies have shown that women may, in fact, be better long-term investors than men.[ii] Two reasons why women are better investors is that tend to save more and tend to trade less, choosing to buy and hold instead.[iii] Women investors show themselves to be more averse to risk so they trade less and take a more patient approach which can generate better returns.[iv] Unfortunately, the number of women investors to men is still quite unbalanced. Only one in four baby boomer women invest. Similar to the stigma of weight training, there is still a bias about women in the stock market, even when the data show them to be good investors. This bias often results in women who think about investing while lacking confidence in their understanding of money whereas men often approach their trading with overconfidence.[v] Women, regardless of income bracket, also tend to take a holistic approach to their finances and factor in the entire household’s needs in their approach to saving and retirement. Overall, women show more caution and are more risk-averse.[vi] In the boy’s club of high-risk, high-reward investing, this is portrayed as a negative. But over the long term, a more conservative approach tends to generate higher returns.

Income Inequality

While fewer women participate in the stock market or in managing their household portfolios, the data shows women tend to be better at it when they do. Women often have their investments better allocated by age, they tend to save more from each paycheck at a higher return, and due to more caution tend to ride out the volatility of the stock market.[vii] In short, the confidence deficit is not accurate. Considering that women often live longer, have less income, and overall higher health care costs, it behooves them to be more proactive in their savings and investments. Women are 80% more likely to be in poverty by the time they are 65 than men.[viii] Because women often leave work or work less to raise children or care for family members, they may suffer what is called a ‘motherhood penalty’ where their pay and advancements lag behind men of equal education o r work experience.[ix] Working with less money over a lifetime makes it all the more imperative that women educate themselves and be more involved in their investments and overall finances.

Leveling the Playing Field

Women have a lot of great assets to bring to the financial market. The culture around investments and finance may be presented as a boy’s club, but it’s to their advantage for women to learn and participate. A few important considerations for women include ‘gray divorce’ which affects couple over 50 and has doubled since 1990, the fact that women over 50 tend not to remarry after being divorced or widowed, and the financial challenges for women who tend to live longer in retirement with less financial resources.[x] Women can benefit greatly from learning how to manage their money and take control of their financial future. Like adding weights to a barbell, there is confidence to be gained being in control of your own wealth management. Finding the fortitude to challenge the male-dominated aspects of investing can help level the playing field between the sexes and make more women financially secur e entering retirement.

Like Susan training for her triathlon, one has to start somewhere when saving for retirement.

First off, every woman should have a diverse portfolio that includes stocks, long and short-term bonds (we prefer mutual funds or ETFS), tax minimization strategies, and easily accessible liquid assets in the case of emergency. The goal is to grow investments larger and faster than they would be stashed away in traditional savings accounts. Doing independent research and seeking out advice from financial advisers are an important part of this process. Like training for a triathlon, there will be challenges, there will be mistakes, but setting out to accomplish something can be its own reward.

Looking Ahead

Currently, the average single woman’s net worth is three times less than the average single man. A recent study found 41% of women said their greatest regret was not investing more of their money. Learning from that regret is the first step. Susan wanted to be strong and to meet the goal of completing a marathon. Training is good for the body, the mind, and the spirit. And treating long-term investment goals like a triathlon may be just the approach to take. Having independent financial security is empowering; learning the how’s and whys of money management and pushing against the confidence gap is also empowering. Challenging assumptions about women and finance is empowering. Through the process of training for her triathlon, Susan learned what she was capable of. Women need to approach their investments with confidence and make room for themselves at the table. No risk, no reward.

Finding Confidence

Susan pushed passed the stigma of building muscle, lifting weights, and completed her goal. She saw the benefits to her body and her self-esteem tackling a challenge and meeting it. While women face an uphill battle in the financial world, it is both empowering and important that they are actively involved in the process. After all, women tend to live longer, which in itself costs more. Health costs are higher for women and their overall lifetime earnings tend to be lower. Women must combat the gender bias around managing their money and remember that while fewer women participate in the stock market, the ones that do excel at it. Being risk aware can be an asset and can make one a savvy investor with higher returns. Trying something new and challenging takes dedication and bravery, but like Susan completing her personal challenge, retiring better and more secure is a real incentive.


[i] http://time.com/4824531/strength-training-women-exercise/

[ii] https://www.investopedia.com/articles/investing/031313/women-and-investing-its-style-thing.asp

[iii] https://www.fidelity.com/about-fidelity/individual-investing/better-investor-men-or-women

[iv] https://www.investors.com/news/women-investing-stocks-outperform-men-studies/

[v] https://www.forbes.com/sites/elizabethharris/2017/06/29/the-confidence-paradox-could-womens-lack-of-investing-confidence-be-an-investing-edge/#1351a5682578

[vi] https://spectrem.com/Content/High-Net-Worth-Women-More-Concerned-Than-Men.aspx

[vii] https://money.usnews.com/investing/buy-and-hold-strategy/articles/2017-12-26/why-women-should-have-their-own-investments

[viii] https://www.nytimes.com/2017/03/03/business/retirement/money-worries-for-retired-women.html

[ix] https://www.epi.org/publication/what-is-the-gender-pay-gap-and-is-it-real/#epi-toc-13

[x] https://www.nytimes.com/2016/10/11/health/marital-status-elderly-health.html

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