Bridging The Gap: Why More Women Should Invest in P2P loans

Surprisingly, very few women invest.

Did you know that women hold almost half of the world’s wealth?

Yet, only 26% are investing, compared to 43% of men of the same age?

The fact is women are missing out on the returns they could earn by investing their money. This means that many women fall behind on building multiple streams of income and financial freedom.

P2P investing, an investment vehicle that offers higher than average returns, provides a great opportunity for women to grow their wealth and catch up with their male counterparts.

But first, let’s look at why fewer women invest and what we can do about it.

Why are so few women investing?

Different goals

When it comes to building wealth, most women aspire to building financial security for their family. This is different to men, who can often be more ambitious and want to focus on personal wealth. We can also see this in the workplace, where females are less inclined to self-promote for jobs compared to males.

The great ambition that is rather more likely found in men is what pushes so many of them to invest, whereas the not-as-strong approach seen in women might explain the lower rate of investing.

Risk aversion

Did you know that only 7% of women hold investment accounts outside of the stock market?

A study from the University Van Tilberg in the Netherlands attributes this to females not being so keen on taking large risks.

When women do invest, they tend to take a more conservative attitude towards investments than their male counterparts, possibly due to a lower confidence in investing skills.

However, the more cautious attitude does seem to pay off since women tend to statistically outperform men in investment returns.

The gender pay gap

Unfortunately, women are likely to have less disposable income than men. This is mainly due to the fact that women may earn significantly less than their male counterparts for the same job.

Generally, women will make $0.82 for every $1 a man makes.

The statistics only get more harrowing if you are a woman of colour, with black women earning $0.61 and Latina women making just $0.52.

The lower salaries that women tend to bring home means that a higher proportion of their income goes towards the budgeting “needs”, like housing expenses and groceries. Women tend to have much less leftover to invest, which also limits potential growth on their funds.

Why it’s important to get more women investors

Women live longer

Women have been outliving men for many years now, with a current life expectancy difference of almost 4 years between both genders. Women are having to build up more wealth in order to sustain themselves over this four year gap. But often the salaries just aren’t cutting it.

Thanks to higher than average returns with P2P investing, compound interest plays an even larger role in extending that four year gap. With this concept your interest continues to increase for the duration of your investment, allowing for exponential growth as the years go by.

The last years of your investments are the most crucial ones, which means women have the most to gain from compound interest.

Women can’t rely on state retirement benefits

Many basic state pensions in European countries offer low state retirement incomes. In the UK, for example, the maximum is £134.25. While you probably will have lower expenses in retirement, that’s hardly enough to live a comfortable life.

However, with investing many women can build up a good baseline on top of their state and private pensions. This increases the options in retirement, with more opportunities for holidays, visiting grandchildren and leaving an inheritance. It also gives women a chance to retire earlier than usual.

Savings accounts are terrible

Over the course of 2020, the average interest rate on savings accounts across Europe have dropped to all time lows, with some in negative figures. Yet inflation sits at a minimum of 2% per year. How are women supposed to keep up with the cost of living by stashing money away in savings?

P2P lending offers women an opportunity to earn a much higher than average return on investments. Higher returns mean you get your money back at a much higher rate than inflation, and the difference is all for you.

How can we get more women investing?

Make it easier

The problem with many investments is that the products can seem overly complex and time-consuming to start using. Women who are busy juggling a career and family won’t have time to research companies, understand how a brokerage works or learn about investment strategies.

That’s why P2P lending works so well, because the process is simple:

  1. Create an account
  2. Deposit your money
  3. Set up an Auto-Invest Portfolio!

It’s perfect for women who just want to set and forget their investments and not worry about P/E ratios.

Offer more accessible information

Although women have access to the same information as men, they are less likely to go down an investing rabbit hole and learn everything they can about fees and derivatives strategies.

Why? Although some might say it’s a lack of interest, the real reason is likely because women are once again juggling a family and career, and are probably prioritising other aspects of their lives.

Brokerages and investing firms can help fix this by providing educational content: articles on how to get started, an FAQ section as well as trends and statistics so that anyone can educate themselves.

Debunk the myth that it’s just for men

The good news is that the number of women in the finance industry is expected to grow by 10% over the next decade.

This is across all areas of the industry and especially increases at C-Suite level.

Even Forbes agrees that women are paving the way in finance, which goes to show that the investment world isn’t just a “bro club”. This myth is harmful as it perpetuates the myth that investing is for men and not for women.

We all need to come together as a community to normalise women investing!

Reduce the size of minimum investments

Since women have lower disposable incomes, many cannot afford to invest hundreds of euros every month. Lowering the minimum investment threshold means that creating and maintaining an investment account is far more accessible to those from low-income backgrounds.

Anyone who wants the opportunity to grow their funds should be able to.

That’s why with a P2P platform like Swaper, anyone can start investing with just €10.

So, to all the females thinking about investing, don’t hold yourselves back!

Investing isn’t about becoming a billionaire. Instead, it’s about prioritising women’s’ future and making sure there’s enough at the end of their lives. With P2P investing, women can invest hands-off, earn higher than average returns and help even the playing field between both genders.