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ToggleWomen earn less.
In Spain, the gender pay gap is 17% (INE data 2022, see the following table), with greater differences in some sectors (24,359/29,382 = -17%). This disparity directly affects women’s savings levels and their ability to generate long-term wealth.
Source: INE
Despite being equally qualified, this pay gap prevents many women from reaching their true financial potential. If it’s any consolation, we see that the increase in 2022 was somewhat higher, 5.12% for women, surpassing the 3.5% for men, but still insufficient to close this gap, which will likely persist for many years.
Investing earlier or better can allow women to maximize their income and at least partially counter the impact of this pay inequality.
Women live longer
Life expectancy in Spain is among the highest in the world and clearly exceeds 80 years. According to INE, women in Spain live, on average, 5 years longer than men (85.1 years versus 80.2).
Source: INE
This means that women have a greater need to invest more to complement their retirement, as living longer implies facing more years without work income. Investing is crucial to ensuring a dignified retirement and better quality of life in old age.
Investing now is not just an option, but a necessity to ensure that a woman’s retirement is peaceful and free from financial worries.
Multiply your money and reach goals faster
Traditional savings, especially with low interest rates, do not offer great returns.
It is true that in recent years, the situation has improved, and it is still possible to open a savings portfolio in inbestMe with a very attractive IRR of 3.10%, or target or bond portfolios with slightly higher IRRs of up to 4%. However, in the long run, it is difficult to outpace inflation without taking some additional risk.
In contrast, investing in well-diversified financial products can generate significant long-term growth. In general, to overcome inflation, we will need to invest, at least partially, in equities. The annualized return (APR) of the MSCI World index in euros (global stock index) over the last 10 years has been approximately 9.6%. If you had invested 10,000 euros 10 years ago in the MSCI World index, today you would have more than 25,000 euros. This return has far exceeded inflation over the same period, which has hovered around 2.4% annually.
At inbestMe, you can find index fund portfolios or pension plans with 10/11 risk profiles, respectively, designed for long-term investment.
Financial Independence
A recent report by Mastercard revealed that 33% of women in Spain believe they will never achieve financial empowerment, partly due to the persistent wage gap. According to a study by IESE (Mujeres y Finanzas) in Spain, 75% of women manage the household budget, but many do not have control over their long-term financial planning.
Investing allows women to gain greater economic independence and better prepare for unexpected events such as divorce, illness, or the death of a partner. In fact, statistics show that 41% of women between 35 and 44 years old have experienced a drastic financial change due to an unforeseen personal event.
Empowerment and Financial Knowledge
Financial knowledge among women tends to be lower than that of men, which creates insecurity when it comes to investing.
The same study highlights that only 37% of Spanish women feel confident in their financial knowledge.
This lack of knowledge can prevent many from making investment decisions.
However, studies indicate that when women invest, they tend to be more cautious, often achieving better returns.
According to a study by Fidelity Investments, women invest for the long term and obtain 0.4% more annual returns than men.
Women take a more strategic approach, allowing them to achieve better results in the long run.
Investing is a way to leverage this natural ability.
At inbestMe, we create a lot of content aimed at financial literacy on our blog and actively sponsor and collaborate with initiatives such as the IEF’s podcast “Educate Your Money,” which can help you understand many financial concepts in an engaging way.
Closing the Gender Gap in Investments
Historically, men have dominated the investment world. In Spain, 66% of stock market investors are men, compared to 34% women.
We have reviewed this figure at inbestMe, and although we are two percentage points better, at 64%/36%, the gap between male and female investors is still significant. If we review the distribution based on asset values, the situation reflects the financial gap mentioned at the beginning, as the ratio worsens to 75%/25%.
An important fact that shows the need to close the gender gap in investments is that 31% of Spanish women consider the wage gap to be one of the main obstacles to achieving financial empowerment.
Investing not only helps improve their financial situation but also counteracts the impact of this structural inequality.
This scenario is changing, as more and more women are taking control of their financial future.
Investing not only helps them improve their financial situation but also breaks gender stereotypes and proves that women can be just as, if not more, successful than men in their investments.
If you are a woman, do not let the gender gap hold you back. Start investing today and take control of your financial future. Our team at inbestMe is here to help you every step of the way.