Who runs the world? Women!
In the next decade, women are set to take control of $30t of wealth.
You read that right. $30 TRILLION dollars.
Currently, women control about $10t of household financial assets. Household assets are personal investments, real estate holdings, and business interests. When I say control I mean directing the investments, managing the properties, and owning or operating the businesses. So that $30t number means that women’s control over their own assets and financial futures is going to triple.
Obviously, this is wonderful news, but the main reasons cited by Bloomberg BusinessWeek were pretty blah:
1. Women are becoming more financially and technically savvy
I don’t like this reason, mostly because it assumes women are not financially or technically savvy to begin with. That said, it goes to show how women are shaping the face of technology and finance. We need to look no further than Monica Rogati, Senior Data Scientist at LinkedIn, or Nikita Johnson, founder of ReWork, an organization dedicated to furthering Artificial Intelligence. In finance the examples are becoming more numerous by the day. We’ve been paying close attention to Saira Malik, Head of Global Equities at Nuveen, and Alison Mass, Chairwoman of the Investment Banking Division at Goldman Sachs.
It’s also worth mentioning that women are not only out-competing men for executive positions, they are also outperforming them. In a 2015 study performed by McKinsey & Company, it was discovered that gender diverse companies are 15% more likely to generate positive financial returns. It also showed that having women on the board of directors resulted in 16% higher return on sales and 26% higher return on capital.
2. Generational wealth is being transferred to female heads of household
Women today compose more than 40% of all heads of household in the United States, a number that has grown every year since 2005. After 2015 those metrics also included two-women homes! Female breadwinners have been an American staple for a long time, but we are moving away from the “struggling single mother” and toward the “executive director” or “business owner”.
As the Great Wealth Transfer gets underway, the male-dominated households of the baby boomer generation are passing their inheritance to homes led by women. This inheritance includes capital assets (stocks, bonds, etc), real estate, and business ownership. These breadwinners will have more assets to care for and more means to make positive change.
So… what?
We don’t know for sure what the “woman’s touch” will look like, but we have already seen female icons like Danielle Azoulay and Tara Abrahams revolutionizing corporate sustainability. Danielle is the Head of CSR & Sustainability for L’Oreal. Her mission aligns wonderfully with our own, but she says it better than we do. You can learn more about our shared mission here. Tara Abrahams is a Managing Director at Arabella Advisors, where she works with high net worth clients and nonprofit organizations to “move their philanthropic goals from idea to implementation to impact.” You can learn more about her incredibly impactful mission here.
What we do know is that women are bringing a refreshingly new approach to how business is being done. As women climb the corporate ladder, start new businesses, and invest their wealth, they are a formidable force for economic and social change.
Looking ahead
Throughout the next decade, as women become drivers of the financial world, we want to empower them to make a difference with their investments. That’s why Hoskin Capital has created the Diversity portfolio. We encourage all of our clients to invest in minority-owned and operated companies. Specifically, we focus on women in leadership and women-founded companies.
When the Great Wealth Transfer kicks off in full, we want women and men alike to feel good about how they are investing their newfound wealth.
Hope you learned something new!
Warm regards,
Nate Hoskin