2. The other wealth gap women face (and how you can close it)

In Episode 2 of The Other Half of Money with Annie Pietra, you'll learn:

• That there is a second wealth gap hiding behind the income gap — and unlike the pay gap, this one you actually have the power to close
• Why women invest less, delegate more, and feel less confident with money than men do
• The irony at the heart of the wealth gap
• Two practical actions you can take today to start closing the wealth gap for yourself and your community
• Have thoughts about this episode? DM me on instagram!

If you want help closing the wealth gap in your own life, I designed The Rich Aunt Portfolio for you. In 90 days, we'll map your financial future, build automated systems that work while you live your life, and get you managing your own portfolio - starting from exactly where you are right now.

Apply here: https://bit.ly/richauntep2

Transcript

 You probably know about the gender income gap in the United States

Basically, for every dollar a man makes, his female counterpart makes 83 cents

We've known about this for a long time, and it is starting to get better, both with social changes and policy changes we have a lot of work left to go, especially when it comes to equal pay for women minorities.

But did you know that there is an even larger gap when it comes to women and money in the United States? That is the wealth gap

For every dollar a man retires with, his female counterpart retires with 74 cents

There are several reasons for this, and we're gonna get into them today.

The good news is that many of the factors that go into it, we can change on our own without waiting for public policy

I'm Annie Pietra. You're listening to The Other Half of Money. Let's get into it

  If as you're listening to this episode today, you realize that you face the second wealth gap that even though you make good money, your investments are still behind where a man's would be, I designed a 90-day coaching program for you. It's called the Rich Aunt Portfolio, and for three months, you and I will work together one-on-one in a format specifically designed to combat the issues we're gonna talk about today.

You can apply for the Rich Aunt Portfolio right here in the show notes or in my bio on Instagram @anniepietracoaching. I cannot wait to help you close the wealth gap

Okay, you're listening to The Other Half of Money. Let's get into it

so in episode one of this podcast, I introduced the concept of the framework, The Other Half of Money. Basically, that what we think of when we think of what's important about personal finance, so numbers, math, accounts, asset allocation, all of that honestly is, like, the less important half of money. What actually makes the most difference in your life are three things: your money psychology, your money systems, and your experience.

This wealth gap that we're talking about, the every woman's 74 cents to every man's dollar, you're about to see that this has everything to do with the experience of being a woman investor and money psychology, and hardly anything to do with the numbers or the math

The experience of being a woman investor is the wealth gap

We're gonna talk about how women participate in the stock market less. We delegate more, we get anxious. This is not because of a math problem. We do this because of our experience. Let me give you a really direct example. One of my very favorite clients that I ever worked with was a doctor.

I'm gonna call her Rachel. I'm gonna tell her whole story another day because, like I said, it is one of my favorites. Years later, I think of her when I'm going through something hard and I'm like, "Man, if she made it through that, I can make it through this." Rachel was absolutely brilliant and kind and tough as nails.

She put herself through med school when she was living in poverty as a single mom

She told me how their electricity would get shut off while she was studying for the MCAT, and she would go sit by a window and tell her kids, "It's time to play outside."

Brilliant, resourceful, caring, you name it And it also turned out when we started working together that she actually knew a lot about investing already. Like, she had the financial knowledge. That said, one of the very first things that she said to me when we started working together was, "I don't know how we're gonna do this.

Every time I have to log into my investment account, I just start crying. I feel so stupid. I feel ashamed that I didn't start sooner. I don't know how to tell whether I can retire, whether I can help my daughter pay for her wedding, or if I can afford to travel to see my son who's moving abroad."

I feel completely overwhelmed and at sea

And like I said her problem was not that she couldn't do math it wasn't even that she didn't know what type of accounts she had

Her barrier was her experience

It was years of being told by somebody that she trusted, her ex-husband, that this wasn't her thing to handle That, oh, she didn't need to worry about it. That she should really just leave these things to him. That what? Did she think she could do it better than he could? For her, what started as him being a little defensive over the money turned very solidly into financial abuse, where she was no longer permitted to access her own money

When I started working with Rachel, her ex was long gone. Their divorce had been finalized years before.

But his words and his abuse were still controlling her ability to manage her own investments. Because the way that he had made her feel, the things that he had made her believe about herself

Were that she was incapable, that she was too dumb for this, that she didn't need to worry about this stuff I shared this part of her story  today

Because a smart woman who is intimidated by investing is kind of the whole story here. The data I'm about to read can basically be summarized in the fact that women are smart with money, but we don't feel like it, and therefore we get worse results.

If that is where you are and that is how you feel, I want you to know that you are very, very, very much not alone

Rachel is far from the only client that I've served in my four years as a financial coach who has been through financial abuse

and still felt the effects of it. That is actually where my money story originates as well. Another story for another episode

But now that you know you're not alone, let's get into the data

In 2023, a Fidelity survey said that 60% of women invest in the stock market compared to 77% of men. That is a huge gap, 17-point participation gap

What I think is even more interesting though, and even sadder, is that underneath that, only 33% of women say that we are investors

About half the women who literally have investments say that we are investors.

You might be like, "Why does that matter?" Okay, I know the only book I've quoted so far in this podcast is Atomic Habits by James Clear

And it feels weird to quote the same book twice and no other books as I sit here in my library full of thousands of books, but, uh, he's got a point. In the beginning of his book, he points out how if you really want to change a behavior, you should not change the behavior. You should change your identity.

I believe he gives the example, if you wanna stop smoking, don't tell people, "Oh, I'm not gonna take that cigarette. I'm trying to stop smoking." He says, tell people, "Oh, I'm not gonna take that cigarette. I'm not a smoker this works because identity is not just a random adjective that you assign to yourself.

It's your conception of self. And when you behave in congruence of who you are Your brain's like, "Yep, that works. I have integrity."

And that's rewarding So what this shows me is that when women don't see ourselves and don't describe ourselves as investors,

That shows me that we're missing out on something big time. Personally, I can also attest to the fact that this is true. I developed the identity "I'm an investor" very quickly. When I started learning about money, I  immediately maxed out my Roth IRA that I opened that year.

I was able to do so because at the time I had extra money in savings, in year two, same thing. Great.

Done. In year three, that was the first full year that I was a financial coach. I made significantly less money. In addition to that, I took maternity leave, and then suddenly I had childcare costs. I prepared for all of these things, and I had the savings buffer to buoy me through.

However, what it meant is that I didn't get to max out my retirement accounts that year And normally, something like this would completely knock me off my horse. I'm a chronic perfectionist

And so sometimes when I make a commitment and then I don't follow through with it, I spiral, but I didn't, and I know why I didn't.

It's because I had the identity that I am an investor I developed that because I had a reason to. My reason is that I have seen firsthand what it is like when women do and do not have access to their own money. When women don't have access to their own money, they are at the mercy of people who have power. And when your back's up against the wall

Money and investments can be the leverage that keeps safe the people that you love most

this is something that I immediately knew that I wanted. And that is why I saw myself as an investor. It's not just something I did, it's something I am

So in that low year, sure, I would've loved to max out my accounts, but I wasn't worried that this would be the end and that I would fall off the horse and never get back on. I knew that this is a priority for me

And that I would restart as soon as I could. And I did

That identity has carried me through

we're gonna get to the practical part of closing the wealth gap at the end of this episode, but pay attention to what I just said about identity, 'cause we are gonna come back to that

But in the meantime, we've got some more stats to cover

Okay, so 60% of women compared to 77% of men invest. 33% of women see ourselves as investors. 10% of women say that they feel they fully understand investing That's a pretty low number

And remember, we're not talking about actual understanding of investing here This survey didn't pull the answers to a test of do you know what a mutual fund is? They asked women, "Do you understand investing?" And we answered no

Men are twice as likely to say that they feel confident about investing than women are. This confidence gap compounds. It is a direct contributor to the fact that we are significantly more likely to outsource the management of our money to a financial advisor.

Talk about another episode coming. I've definitely got one or two on financial advisors' fees I am not anti-financial advisor. In fact, I'm quite pro. But I am anti-assets under management as a fee system for advisors. This is the way that the majority of financial advisors in the United States are paid.

They take a percentage of the assets that they manage for you This is one of the most expensive choices that you as a normal woman could make in her life I joke not when I tell you that it could cost you millions of dollars

That's more than you're looking to spend on a house. That is probably more than you spend on travel in your entire life

And that's how much you may pay a financial advisor who charges assets under management. Again, we'll come back to this, but I want you to put a pin in that one

Because all of these stats together mean that women invest less often, we feel worse about it when we do, and we keep less of our wealth when we finally invest These are the factors that go into the seventy-four cents to every man's dollar.

This is the second wealth gap, and everything I've just talked about has to do with the experience of being a woman investor and money psychology

Now, are these the only reasons for the wealth gap? No, they're not. Women tend to take more time outside of the workforce as caregivers of young children or of elderly

This means that we are eligible for less in Social Security, and it also means that we don't build our own investments or get an employer match of those investments

These are the factors that are going to require societal change and public policy change. But everything else we talked about is under individual control

And now I wanna hit you with some real irony. You ready? Fidelity analyzed more than five million US clients over a decade, and they found that women's returns outperformed men's The gap was 0.4%. Okay, what does 0.4% mean? If you give a million dollars to one woman and one man and give them 25 years for it to grow

If the man gets a 7% return and the woman gets a 7.4% return, she's gonna end up with more than half a million dollars more,

When we're talking long timeline, these fractions of a percentage point mean hundreds of thousands of dollars this is the behavioral edge that women carry without even knowing it. And yes, it is a behavioral edge because the reason why women get higher returns is directly tied to the fact that we don't do anything to our investments

We leave them the fuck alone

As it turns out, the behavior that gets higher returns is that very same behavior that might look like avoidance or lack of financial education or lack of confidence

It's not responding to the market by trading. It's not picking stocks and trying to predict the news of which company is gonna go up or down.

It is the opposite of the bro gambling on everything that we're seeing so constantly through Polymarket and Kalshi what investing like a girl looks like is tracking the stock market itself over a long period of time, leaving it there

And coming back in 30 years

The takeaway I want you to have here is that investing like a girl gets results

The problem is that we are just not getting to the starting line

but notice this data shows us that the wealth gap between women and men is not due to skill or knowledge, but it is due to belief. It is our money psychology. We feel like we're worse at investing We act like we're worse at investing. We don't do it. So our thoughts create our results, and too many of us don't invest.

But the data says that we're actually better at it when we do. We just gotta get to the starting line

Okay. And now for the practical takeaways number one is that I want you to find out how much you have invested

Almost no woman I talk to knows

This includes workplace retirement accounts like a 401or a 403if you work at a nonprofit If you are a civilian working in government or in the military, yours is probably a   If you're in Canada, we're talking a different option, like a LIRA or an RRSP

Don't forget old workplace accounts from different jobs you've worked in the past

But it doesn't stop there. I want you to add up that amount, and I want you to add anything that you might have in investment accounts that you opened up when you were like, "Oh, investing is good. I should probably do that."

Also, don't forget if you set up any kind of individual retirement account or IRA A Roth IRA or a traditional IRA. In Canada, a TFSA

If you have stock options or RSUs or ESPPs as part of your compensation plan, if you have a high-power job in corporate, those are investments as well.

Find all of those accounts and write down how much you have invested.

Once you know the number, DM me on Instagram. I wanna celebrate with you. I'm @annipietracoaching

Okay, that's number one. Practical takeaway number two is that I want you to start referring to yourself as an investor, in conversation if you can

Because the reality is, if you have any one of those accounts that I just named, you are already an investor

The second half of this is that I want you to articulate why you are I told you a little bit about my why. What's yours? Why do you invest? Why is building wealth important to you? What's your relationship with that phrase even?

There's a lot of digging to do here, and we will do it, but start there. You're an investor. Why?

Once you have that answer, send it to me on Instagram again, @anniepietracoaching. Those conversations are why I'm making this podcast

Okay. So today we talked about the second wealth gap

When you learn to manage your own investments, you're closing that gap for yourself. When you teach your sister the power of a Roth IRA, you close it for her. When your best friend watches you take control of your own portfolio, the narrative changes for her too. This is how a gap that has persisted for generations, centuries, starts to move, not by waiting for public policy to catch up, but through you, one woman deciding that your financial future belongs to you  This is the movement that we're building here.

You're listening to The Other Half of Money. I'm Annie Pietra. I can't wait to be rich aunts together,  and I'll see you next Thursday.