Why Are Women Scared of Investing? Understanding and Overcoming Investing Fears

Investing can be a powerful tool for building wealth and securing financial freedom. Yet, despite its potential, many women remain hesitant to dive into the world of investments. This reluctance isn’t merely a personal choice but is deeply rooted in societal norms and early socialisation.

Addressing these disparities in investment behaviour is crucial for promoting financial equality and empowering women in managing their finances effectively. By providing targeted financial education, promoting confidence-building measures, and challenging gender biases in financial advising, women can be encouraged to take a more active role in investing decisions, ultimately leading to greater financial empowerment and security.

Understanding the Hesitation

In her book, Take Back Your Brain: How a Sexist Society Gets in Your Head–and How to Get It Out, Kara Loewentheil (2024) emphasizes that women, despite having legal financial equality in much of the western world, do not enjoy full financial equality socially or economically. Key points from her analysis include:

1. Dependency in Marriages: The majority of women in heterosexual marriages report leaving investing decisions to their husbands, contributing to a feeling of dependency.
2. Lack of Financial Confidence: Women are often not taught to believe in their ability to create wealth by taking calculated risks and making investments.
3. Social and Economic Capital: Women are less likely to be taught about financial literacy and taking responsibility for their financial lives, limiting their ability to create social and economic capital.

Loewentheil argues that these issues stem from societal norms that teach women to leave wealth creation to men, thereby perpetuating financial insecurity and dependency.

The Impact of Socialisation: Evidence from Research

A recent study by Sesini et al. (2023) highlights that gender differences in money attitudes are influenced more by socialisation than by inherent gender traits. The early socialisation of women includes messages that emphasize caution and dependency rather than empowerment and independence. This manifests in several ways:

• Lack of Financial Education: Women are often not encouraged to learn about finances, leading to a lack of knowledge and confidence in making financial decisions.
• Negative Emotional Messages: The societal narrative that money and investing are “men’s territory” can create a sense of inadequacy and fear in women.
• Beliefs and Self-Efficacy: Without positive reinforcement, women are less likely to believe in their ability to succeed in financial ventures.

Consequences of women being less involved in investing decisions

1. Wealth Accumulation Disparity: Women may miss out on potential wealth accumulation opportunities that come with investing in higher-return assets, leading to a wealth gap between men and women over time.
2. Financial Independence: Limited involvement in investing decisions may hinder women’s financial independence and long-term financial security, especially in retirement planning.
3. Gender Wealth Gap: The disparity in investment behaviour between men and women can contribute to the gender wealth gap, where men accumulate more wealth over time due to higher-risk investments.

Overcoming Investing Fears: A Candid Conversation for Women

To address these deeply ingrained fears and misconceptions, Minna Schmidt and I will be hosting a LinkedIn audio event next week:

Event: Flourish Financially #1- Overcoming Investing Fear for Women

Date: Thursday, 25th July

Time: 12 PM CEST

Join us for an intimate and empowering audio conversation as we dive into the common fears and misconceptions that hold women back from investing and building wealth.

As a Financial Coach (Minna) and an Emotional Intelligence & Leadership Coach (Sophie) who have worked with countless women, we’ve seen firsthand how deeply ingrained these fears can be. From feeling overwhelmed by financial jargon to worrying about making the “wrong” decisions, many women struggle to take that crucial first step into investing.

In this raw and honest discussion, we’ll share our own personal experiences navigating the world of investing and the fears we’ve had to overcome. We’ll also draw from our coaching experiences to shed light on the most prevalent fears and misconceptions that arise, such as:

• Lack of Confidence in Financial Knowledge
• Fear of Losing Money
• Imposter Syndrome and Self-Doubt
• Societal Pressures and Expectations
• Lack of Female Role Models in Investing

By bringing these fears out into the open, we aim to normalize the conversation and empower women to confront their doubts head-on. You’ll walk away with a deeper understanding of how these fears manifest, practical steps for overcoming them, and the inspiration to take control of your financial future.

This event is for anyone who wants to invest but has been held back by fear, self-doubt, or uncertainty. Join us in creating a supportive community of women who are ready to shatter the barriers to investing and build the financial freedom they deserve.

Join us on LinkedIn Audio Event: https://www.linkedin.com/events/flourishfinancially-overcomingi7218944136429645825/

Sincerely yours,

Dr. Sophie

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Inspired by:

Sesini, G., Manzi, C., & Lozza, E. (2023). Is psychology of money a gendered affair? A scoping review and research agenda. International Journal of Consumer Studies, 47(6), 2701-2723. https://doi.org/10.1111/ijcs.12975

Loewentheil, K. (2024). Take Back Your Brain: How a Sexist Society Gets in Your Head–and How to Get It Out. Penguin Life.