Women are projected to control more than half of the wealth in our country by the middle of this century. There are those who believe that’s already happened, but the overall trend is undeniable. Some men aren’t quite sure what to make of this. But I strongly believe that this is a great thing – not just for women but for all of us.
Why will women continue to control greater wealth over time than men? It’s a mixture of social trends and biological factors really. On the social side, consider that there are a lot more women in today’s workforce than there were in WWII. According to the US Department of Labor, women in the workforce increased from 32.7 percent in 1948 to 56.8 percent in 2016. It’s not clear what the underlying biological reason is, but I’ll attribute it to the fact that women don’t eat as many chicken wings and blooming onions after work as their male counterparts, so they actually live longer than we do – a total of 4 years longer, according to 2017 statistics.
With more women in the workforce and with a longer life expectancy than men, some predict that women will go from controlling around 40% of investable assets in the US today to upwards of 66% within the next 20 years. That equates to a transfer of somewhere around $3.2 trillion in wealth to women.
But let’s forget the debate over the projections of just how much money women will control and the reasons why, and let’s accept that it’s going to happen. Because while the numbers may vary, the trends are clearly leading us in that direction.
Why is this a good thing?
Because we know that relationships matter to people. A famous longitudinal study out of Harvard University proved that regardless of educational background or social status, the most important determining factor in overall happiness and health is the quality of our relationships. But as important as they are to us, the quality of and changes in relationships are hard to quantify. How do you measure with any certainty that your relationship with someone is better today than it was yesterday?
On the other hand, we can measure more tangible things like financial assets. I believe this is why we spend much more time making sure have the right advice to nurture our financial assets than we do on our relationships. This focus on financial assets is also an underlying reason why families rarely maintain their wealth for longer than three generations: they spend more time managing their financial assets when the human assets have a much greater return on their investment. Maintaining close family ties is a much greater predictor of happiness and sustaining long term financial wealth compared to focusing on asset accumulation.
Women, by and large, are much more adept than men at nurturing relationships. This is why having more overall wealth controlled by women will be good for all of us. Women understand intuitively that their relationships require attention, and they are more likely than men are to use their financial resources to nurture their family relationships. This will benefit families in multiple ways. Not only will investing in relationships improve the health of families, it will also improve the overall quality families will get from their professional advisors. Women are more likely than men to ask for advice (who is the first to suggest asking for directions when lost?). Not only are women more likely to ask for advice, they’re also more likely to integrate the advice from other advisors, which will result in collaborative planning instead of isolated planning by expertise.
When you put all these factors together, it’s pretty clear that we should all be celebrating this transition that is already well underway. Bring it on!
Note to readers: I was tempted to write this an open letter to men because little of what is written here will likely come as much of a surprise to women. This provided great opportunity to make fun of typical male behavior. While I snickered as I added levity to the main points, I worried that my attempts at humor might distract from the overall premise. The reality is that men need to hear this. Female readers, on the other hand, will likely read this and (if you’re not offended by my generalizations about the differences in genetic predispositions of males vs. females) think there’s nothing really new here. I’ll take that risk because I don’t think it’s the women who need convincing of my assertion. The growing influence of women managing family assets is likely to change how we think about wealth, what we do to sustain it and where we dedicate our time and attention. I’m convinced it will be good for everyone.