Trillions of Dollars Are About to Flow Into the Hands of (Mostly) Women. It’s As Big a Deal As It Sounds.
Women are set to be the primary inheritors of around $80 trillion—an enormous wealth transfer which has the potential to change our economic and social landscape.
The world of money—the universe of wealth and trading and investments, but also, by extension, power and influence—is about to change dramatically.
Sometime over the next one or two decades, we’ll witness the greatest transfer of wealth that history has ever seen—a changing of hands, by some estimates, of more than $80 trillion. And the majority will flow directly to women.
Got all that? Great. Now let’s slow it down a little.
Over the next few years, as members of the Silent Generation and the Baby Boomer generation pass on, they’ll leave trillions of dollars worth of cash and other assets to their beneficiaries: members of Generation X, Millennials, and Gen Z. Perhaps most notably, though, because women globally are outliving men, this will be a gendered transfer, and for all of us—regardless of gender—the benefits could be prodigious.
This may well turn out to be one of the most effective catalysts in our lifetime spurring greater financial equality between genders. That’s because women and men make different decisions when it comes to investing and spending. Women give more generously to philanthropic causes than men, for example, and they’re more likely to fund initiatives for common social good. Women are also more likely to fund women-owned businesses. These, in turn, are more likely to hire and promote more women. Could that lead to a shrinking of the gender pay gap? It’s certainly possible.
A Man’s World
To understand the origins of the gendered world of big money and the scope and scale of what’s about to happen it’s useful to travel back in time.
More than a century ago, in the summer of 1916, when Hetty Green—a New York City-based investor—died, she was both lauded as the richest woman in America and admonished as the “Witch of Wall Street."
The logic was that women had no business in the world of money. And Green had a lot of it. By investing in the stock market, she had grown an inheritance she’d received as a young woman to the equivalent of $2.8 billion in today's money. These riches rendered her unnatural; obscene, even, in the eyes of the media. She was dubbed America’s first female tycoon.
As recently as 50 years ago, the social norms that Green contended with were still underpinned by hard and fast legislation and regulation. Until 1974, women in the U.S. were widely barred from having a credit card in their own name. Until 1978, pregnant women in paid work were not explicitly protected from discrimination by the law. Until 1988, a woman could be denied a business loan because of her gender. Money, earning it, borrowing it, spending it and investing it was simply beyond—or at least not within—the accepted domain of women.
Of course today, many women (though not too many women) have broken into the boys club atop Wall Street banks and investment giants. More women than ever (though still only about 10%) run Fortune 500 companies. And women account for half of all entry-level jobs in the financial services industry. But there’s still a gaping gender gap in terms of women’s representation in the seats that hold most of the power, not to mention in terms of women’s confidence and literacy when it comes to spending and investing. Men are also still the primary financial decision makers in roughly 60% of affluent U.S. households, according to McKinsey.
All of which makes the coming wealth transfer particularly critical. If women aren’t included in the worlds of financial prowess, if they don’t feel like they can call the shots or otherwise be heard; if they don’t feel empowered to control those funds, or are belittled, a rare opportunity will be lost.
A Cultural Stigma
Over the last year, as I’ve travelled across the U.S. and U.K. talking about my book, ‘Women Money Power,’ I’ve encountered hundreds of women who have voiced the same sentiment: Money is difficult to talk about. Money is scary. Money feels dirty.
Josie Cox
Read an excerpt from "Women Money Power" by Josie Cox
There have, of course, been exceptions, but generally speaking, the men I’ve spoken to have been comfortable conversing about money—though perhaps not explicitly about how much they make. Much research also shows that men are generally more likely than women to trade and invest.
These gendered differences are damaging, of course—most obviously because they underpin the gender wealth gap, which measures not just how much women make compared to men, but how much they own and keep over a lifetime. The reality is that society has taught us the world of money is the realm of men, and not the realm of women. And for that, we have social norms and the media to thank.
Last year, research published by academics in Germany found that gender stereotypes are still prevalent in financial advertisements, for example—and whether we like it or not, the messages we consume through the media shape the way we think.
When women do feature in financial ads, the authors of the paper explained, they’re “typically depicted in subordinate roles and as having limited knowledge about the featured financial product.” Men, by contrast, are “often portrayed in professional, authoritative positions.” The academics conclude that these differences “may explain women’s lower financial confidence and their reluctance to actively manage their finances.”
‘The Money Silence’
If the problem is a cultural one—and it is, because I’ve yet to find any evidence at all showing that women are actually worse than men with money—then the solution must also be cultural.
At the heart of the problem lies a single issue: Men are still far more likely to talk about money than women. Kathleen Kingsbury, an author and the founder of KBK Wealth Connection, a wealth consultancy and coaching business, refers to this as the “money silence.”
“We need to stop sending the message that women are not as financially literate as men. This is a myth and a self-fulfilling prophecy,” she says. The financial services industry, she adds, needs to explicitly encourage women to break this “money silence.” Doing so, she told me, “does not make you less attractive, difficult or a bitch,” but instead, it means that you are taking care of yourself—and your family if applicable—and it’s part of being a responsible financial adult.”
Jasmin Rashid, the author of a book called ‘The Financial Activist Playbook’—agrees that the change has to be cultural and explicit.
“The world of finance has been exclusionary, opaque, and extractive by design—leading to a modern day culture in which even talking about money is still largely considered taboo,” she says. “Cultural shifts are essential to challenging outdated narratives about women and money, and increasing representation in financial decision-making can drive systemic change.”
Rashid adds that this must include things like better, more representative financial education—on national school curricula for example—and more diverse financial advisers. Currently, only about one-quarter of financial advisers are women.
The World Would Be a Very Different Place...
Just as there’s plenty of evidence showing that money is still gendered, there’s also plenty of evidence showing that if women were to control and invest more money, the world would be a very different place.
“It’s not only about inheriting the money,” says Elisabeth Prager, co-founder of Alia Money, a platform and app designed to encourage women to become more financially confident and literate, “but also what women do with that money.”
Prager notes that when women do invest, they tend to be more likely to want to invest in order to have a positive impact on society and the environment. She points to research showing that women also tend to invest more in women-led businesses. (And studies show that those businesses also tend to hire more women and pay them more.)
Indeed, further research shows that awareness of, and interest in, environmental, social and governance style investing—or so-called ESG investing—is particularly high among women. And many studies have shown that women are much more likely than men to channel money they have into philanthropic causes.
A most notable example of this is Melinda French Gates, who last year announced that she was putting $1 billion to work on alleviating the systemic problems facing women and girls, and the persistent lack of funding to fix them. Another example: MacKenzie Scott, the ex-wife of Jeff Bezos, has given away billions of dollars of her fortune to charities and other philanthropic organizations, many with a mission to alleviate poverty.
But billionaire or not—divorced from a famous tech mogul or not—everyone can play a role in ensuring that the great generational wealth transfer fuels real progress in terms of creating an economy in which gender is no longer a differentiator, and no longer a barrier to personal and professional success.
Could the wealth transfer even close the gender pay gap? Well, OK, probably not—the cultural and societal dynamics at play are too entrenched to be offset entirely. But it could certainly shrink it. Especially considering that more wealth in the hands of women means more power in the hands of women. And in addition to that, a great wealth transfer, handled correctly, could chip away at the stubborn difference in the amounts that women and men save and invest, too—all captured in that all-important gender wealth gap.
Either way, the next few years represent an opportunity too profound to ignore or underplay: an opportunity for all of us to prove just how far we’ve come since Hetty Green made her fortune on Wall Street.
Gabriella Griffith
Preeti Jha
Luba Kassova
