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I went back to work part-time when my daughter was less than two years old, and I didn’t ask for a raise for two years. Not because I didn’t need one, or because I thought I was paid fairly. But because I’d been gone, and I felt it – the particular lurch of returning to a job that had moved on without you, of sitting in meetings and not knowing what was going on, of being uncertain whether the work I was doing was actually good enough. And I was already asking for part-time hours so it felt like I was asking for a lot.
So I didn’t ask. And that decision, which felt like tact, like being realistic, cost me. Not just the salary I didn’t earn in those two years, but the compounding effect of a lower base for every negotiation that came after.
I’m telling you this because I think you’ve done a version of this too, and I want to show you what it actually costs.
The standard explanation for why women invest less than men is that we’re risk-averse, too cautious or (one of my favourites) too emotional about money. This is a convenient story for the people it flatters.
Research consistently shows that women who invest achieve returns equal to or better than men. A Warwick Business School study found that women outperformed their male counterparts by 1.4 percentage points annually1 – not a rounding error over decades. The gap between men and women is not in investment performance, it’s in investment participation.
Which means the question isn’t why women are bad at investing, it’s why fewer women invest in the first place.
1. The money simply isn't there.
Women earn less. In the US, full-time female workers earn around 81 cents for every dollar earned by men2 – and for women of colour, the gap is considerably wider. In the UK, the gender pay gap sits at around 13% across all employees.3 In Australia, it’s 21% when you factor in total remuneration including bonuses and superannuation contributions.4 Across the EU, women earn on average 12% less than men per hour.5
Less income means less disposable income; less disposable income means less to invest.
Add to that the unpaid labour dimension: Women across the OECD perform on average 2.5 times more unpaid care and domestic work than men.6 In the UK, that’s estimated at £1.24 trillion annually.7 That labour: cooking, caring, managing, organising, anticipating – doesn’t show up in a bank account. But it does absorb hours that could otherwise be spent on paid work, side income, or thinking clearly about your own finances.
2. Investing is coded as not for you
Money culture has historically been built by men, for men. The language of markets, “beating” returns, “aggressive” growth strategies, “killing it” in your portfolio, is not accidental. Neither is the fact that financial media, until very recently, defaulted to a male audience. Neither is the social infrastructure: the investment clubs, the dinner table conversations about shares, the fathers explaining compound interest to their sons.
Women are more likely to have been steered toward saving, which is safe, rather than investing. Saving is putting money under the pillow, investing is putting money to work. The distinction matters enormously over time, and women have been systematically pointed toward the pillow.
This creates a gap in what researchers call financial socialisation: the informal, accumulated exposure to money concepts that makes investing feel normal and legible. Men often absorb this through osmosis, women are more likely to feel they need to formally qualify before they start: to read enough, know enough, be certain enough.
3. Confidence is a structural problem.
Back to my anecdote: the confidence I lost after my daughter was born was a rational response to an interruption that actually did set me back professionally, combined with a workplace that (subtly, never explicitly) made me feel that asking for anything was already a lot.
Low financial confidence in women is the expected output of being told, explicitly and implicitly, that this isn’t your domain. Of watching financial decisions get made around you rather than with you. Of having your financial judgement treated as less authoritative than your partner’s, your father’s, your male colleague’s.
The advice to “just be more confident” is a deflection. Confidence follows action, not the other way around – and the real solution is lowering the barrier to entry enough that you act before you feel ready.
Here is the part that should make you angry.
The years women are most likely to shrink their financial ambitions, roughly the late 20s through early 40s, when caregiving, part-time work, career interruptions, and the psychological aftermath of all of the above converge, are precisely the years when invested money has the longest runway to grow.
Compound interest is not complicated, but its implications are brutal if you’re on the wrong side of them. Money invested at 32 has roughly 30 years to grow before a standard retirement age. Money invested at 42 has 20. That ten-year difference, on even modest contributions, produces a gap in outcomes that cannot be closed by “catching up later”.
Let’s make it concrete. Say you invest $300 a month from age 20 to age 35, then stop contributions entirely and just leave it to compound. Assuming a ~7% average annual return – roughly the long-run average of a diversified global index fund – you’d have around $750,000 by 65. Now say you wait until 35 to start, and invest $300 a month from 35 to 65. You’d have around $370,000. The person who invested for fifteen years and stopped ends up with significantly more than the person who invested for 30 years and started late.
This is not to say don’t start at 38. Start at 38. Start at 48. Start now.
But understand that the pause – the years you didn’t invest because money was tight after the baby, because you were rebuilding confidence, because you were putting the joint savings goal first, because you just hadn’t got around to it – those years are expensive.
Nobody sits down and decides not to build wealth, it happens in small increments.
It’s reducing your pension contributions when cash is tight after parental leave and not reinstating them when things get easier. It’s putting the joint house deposit ahead of your own investment account, indefinitely. It’s not negotiating your salary because you’re already asking for flexibility and you don’t want to push it. It’s spending your cognitive energy managing everyone else’s finances – the household budget, the kids’ activities, the family holiday – while your own financial future sits in a tab you never quite get to.
None of these feel like wealth decisions at the time, but they are.
And they accumulate in a particular way for women, because women are more likely to be the default household manager, more likely to have taken the career hit for childcare, more likely to be the lower earner in a heterosexual partnership and therefore more likely to defer on financial decisions.
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♡ Ta!
Start before you feel ready. The feeling of readiness is not coming. Investing something, even a small amount, into a low-fee index fund can help getting unstuck. Low-fee index funds – funds that track the broad market rather than trying to beat it – are widely available in most countries, and the platforms to access them have never been more accessible. Most require very little to start. A quick search for "index fund platform" plus your country will surface the main options; reading a few independent reviews will tell you which have the lowest fees. If you have a workplace pension or superannuation fund, it's also worth checking what investment options sit within it – many people have more choice there than they realise.
Reinstate contributions you reduced and never got around to restoring. This is the single most common and most costly inaction. If you dropped your pension or superannuation contribution during a tight period, check what it’s set at and how you can increase it again.
Separate “our money” from “my money.” Joint finances are fine, joint finances as your only finances are not.
Negotiate everything, every time. Salary is the obvious one, but it’s not the only lever. When you’re offered a role, or up for a review, or changing hours – negotiate the full package. That means your bonus percentage and the targets it’s tied to (vague targets are unpaid bonuses). It means superannuation or pension contributions above the statutory minimum; many employers will go higher if asked, and a 1-2% difference in employer contributions compounds significantly over a career. It means additional leave, flexible working arrangements formalised in writing, professional development budgets, health insurance, income protection and life insurance cover. These are not extras, they are compensation, and they are negotiable. Most women don’t ask because it doesn’t occur to them that the package is a package, not a fixed object.
And yes, salary too – for the version of you at 65. Every increase you don’t negotiate is money absent from your base for every negotiation that follows. The compounding effect of under-negotiating your salary isn’t just this year’s shortfall, it’s a smaller foundation for every future raise, a lower figure on which any percentage increase is calculated, and – where pension or superannuation contributions are salary-linked – smaller retirement savings across your entire working life.
Know what’s yours. If you’re in a relationship, know what you own, what’s in your name, and what would happen to your financial position if that relationship ended.
The resources below might be useful and a good starting point. None of this is an endorsement, and nothing replaces advice tailored to your situation.
Friends That Invest (formerly Girls That Invest) – founded by New Zealander Simran Kaur, this is the world’s number one investing podcast for women, with over six million downloads. Accessible, jargon-free, and good on the basics. The book Girls That Invest is worth having on your shelf.
Her First $100K - Tori Dunlap's platform, described by CNBC as "the voice of financial confidence for women." Podcast, courses, salary negotiation resources, and a community of over five million women. Explicitly feminist framing – money as a tool against systemic inequality.
She’s on the Money – Victoria Devine’s Australian podcast and Facebook community (search ShesontheMoneyAUS) has over 400,000 members. The Facebook group in particular is an unusually high-quality space for practical money questions, peer support, and real conversations about investing. If you want a community, start here.
Ladies Finance Club – Australian-based, founded by Molly Benjamin, with over 70,000 women in its community. Strong on events, courses, and making investing feel accessible rather than intimidating. Also operates in the UK.
Female Invest – a European-founded platform now operating globally, with 85,000+ members across 125 countries. App-based, with courses, a trading simulator, and a community forum. Good option if you want structured learning at your own pace.
MoneySmart – ASIC’s free Australian resource. Dry but reliable. The compound interest calculator alone is worth five minutes of your time.
MoneyHelper – the UK government’s free financial guidance service. Covers pensions, budgeting, and investment basics without trying to sell you anything.
The system is not set up for women to build wealth easily. Lower earnings, more unpaid labour, exclusion from financial culture, and the particular cruelty of peak deprioritisation occurring during peak compounding years – none of this is accidental and none of it is your fault. But fault and agency are different things. You can understand the structural reality and still act within it. Seeing it clearly is the first move. ♡
Nothing in this article is personal financial advice. It is information. For advice specific to your situation, talk to a financial adviser (one who charges a flat fee rather than earning commission on what they sell you).
Sources:
1 Warwick Business School https://www.wbs.ac.uk/news/are-women-better-investors-than-men/
2 US gender pay gap https://nwlc.org/press-release/for-the-first-time-ever-census-bureau-data-shows-gender-wage-gap-widening-for-a-second-year-in-a-row/
3 UK gender pay gap https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/bulletins/genderpaygapintheuk/2024
4 Australia gender pay gap https://www.wgea.gov.au/pay-and-gender/gender-pay-gap-data
5 EU gender pay gap https://commission.europa.eu/strategy-and-policy/policies/justice-and-fundamental-rights/gender-equality/equal-pay/gender-pay-gap-situation-eu_en
6 Women do 2.5x more unpaid care work https://www.unwomen.org/en/articles/faqs/faqs-what-is-unpaid-care-work-and-how-does-it-power-the-economy
7 UK unpaid labour valued at £1.24 trillion https://www.ons.gov.uk/economy/nationalaccounts/satelliteaccounts/articles/changesinthevalueanddivisionofunpaidcareworkintheuk/2000to2015
More reading:
The reason your fair household still doesn't feel fair.
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Mar 28
By now you might have done the audit. You might even have started the weekly check-in. And if you have, something has probably already shifted: there’s a little less friction, a little more shared awareness, a feeling that things are slightly more visible than they were.
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