April 5 — It’s not knowledge, and it’s not lack of funds. No, according to a new study by SoFi and Levo, How Millennial Women Invest, the biggest factor in the investment gap between men and women is fear.
Study findings showed that millennial-age women are active and prudent mangers of their personal finances. Fifty-three percent of those surveyed have an emergency savings fund that would cover 3-6 months of housing and necessities, and 70 percent review their bank acounts at least once a week. They possess the cash flow to pay off debt, save money and roughly 50 percent have the ability to invest for the future.
However, just because they can, doesn’t mean they do. The study also found that even though 57 percent of these women had extra money left after paying bills, the majority (56 percent) did not invest because they were afraid of doing so. The fear seems to be generated from two sources: 25 percent reported they were not investing because they are still paying down debt, but another 25 percent find investing to be a “total mystery.”
“Millennial women are a powerful economic force representing a $170 billion market, and yet 56 percent of women who have the money to invest say they do not do so because fear holds them back,” said Levo President Alisa Leonard. “We see demystifying investing through education as key strategy for reducing fear of investing and help[ing] women grow their wealth. In fact, in our study, 48 percent of millennial women agreed that access to more education and tools would make it more likely for them to invest.”
Despite all of this, the overwhelming majority of millennial women (85 percent) list “stability for my future” as a top investment goal. More than 60 percent also prioritize wealth as a way to pursue outside passions and interests.
“There is an incredible opportunity to increase the level of comfort and education around investing for the millennial woman,” said Libby Leffler, vice president of membership at SoFi. “Our study shows that millennial women are financially responsible — paying down debt is a major priority. However, being financially responsible is also planning for the future. The survey findings show us that millennial women are more likely to invest with proper tools …”
These findings come from a national sample of 2,050 female consumers ages 18-34 with an average salary of $50,000 or more annually.