The Feminization of Wealth

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We’re going to hear more and more about the “feminization of wealth” as the great wealth transfer—$80 to $90 trillion from Boomers to Millennials—takes place. By the end of the decade, we expect that women will control $30 trillion, and, eventually, about 60% of all wealth in the U.S.  For perspective, U.S. gross domestic product for 2023 was just under $28 trillion.

What will happen?  We will change the world. Is it too late for you to participate? Nope. Women’s longevity is one of the drivers. Whether you’re a doer or a follower, you still get to play.

We are about to debunk (finally) the myth that women are not a significant economic force.  (Although you’d think when caregivers were forced out of the workplace during the pandemic, economists would have figured it out.) We know that I’m fond of quoting Dr. Joe Coughlin, head of MIT’s AgeLab, who says that Boomer women will invent anything they need that doesn’t already exist. Why is that? Because Boomer women, at scale, are able to pay to make ideas come to fruition.

Economic myths are stubborn things. Economist Katrine Marçal has pointed out that failing to consider unpaid labor is the Achilles heel of modern economic theory. It would be fine if everyone acted out of economic self-interest. But that doesn’t explain who puts dinner on the table, soothes a crying child, drives an elder to a doctor’s appointment or folds the laundry. Women, since the beginning of time, have been building our economic engine through both paid and unpaid labor; the unpaid labor enabling the paid labor to take place.  The only thing women have been unable to access economically are the Halls of Power.

Aside: My take is that it’s useless to insert ourselves into the traditional Halls of Power in U.S. industry. We should go where the rules favor us and create our own infrastructure. U.S. Industry, with a few exceptions, is too toxic and represents a perfect example of the patriarchy acting out of manufactured scarcity and not its own economic self-interest. Men are simply too emotional and, apparently, easily threatened. The Halls of Power in U.S. Government, however, are accessible. Don’t forget to vote your own economic interest. We’ll leave it at that.

As I was saying, economic myths are stubborn. It is a myth that women are more spendthrift than men. It is a myth that men are better investors. It is a myth that anyone is more suited to parenting or housework or finance or construction. The person who is suited to it is simply the one who has the right tools, the right education, and practices it regularly. Marçal reminds us that modern equipment, from dishwashers to nail guns, can “de-gender” the labor of an activity. I’m not alone in the opinion that YouTube, bless its little cotton socks, will take care of the rest.

The feminization of wealth describes, per Ellevest, a “fundamental shift [that] occurs when women receive a financial windfall.”  Specifically, women’s confidence increases. And that has big implications for the economy, social policy, and philanthropy.  Unfortunately, Ellevest also asserts that just 38% of women have the support to navigate their wealth. There aren’t enough women CFP® professionals to go around.

When I talk to potential contractors about the goals of Madrina Molly ™, they invariably summarize their understanding by referring to women’s financial “empowerment.”  It’s a running joke with my strategist partner, David, that anyone who uses the word “empowerment” is automatically voted off the island. And any time I hear the word “empowerment” my head pretty much explodes.

There are good reasons for this. One is that women are as much free citizens as men. We have the right, power and authority (the definition of empowerment) to act in our own economic or emotional self-interest. Another is that the word is most used as a transitive verb rendering it passive—an object. By saying someone is “empowered,” we are saying they are empowered by something (or someone). Empowerment is somehow bestowed upon women by a third party.   I’m calling B.S. on that.

Empowerment is not permission-based.

What’s my point? Simply this: Women are already empowered. What we haven’t done to date is flex that power as significantly as we will be able to in the future. We will determine how we want to receive service and will not tolerate unacceptable treatment. We will leave social and employment relationships that no longer work for us. And we will demand to speak to women in charge, which will, in turn, force more women into the executive suite. (Just kidding.  It will create more opportunity for new firms created and controlled by women.) The feminization of wealth gives women confidence and permission to flex.

The feminization of wealth also gives women the ability to reform society to address needs that men refuse to address.  According to Indiana University research, “Women-led households donate more to charity than men with similar incomes.”  As the people who are most affected by our extraordinary need for caregiving, women will be at the forefront of solving for this crisis, and that solution will also put more women back into the workforce.

I say Go. For. It.

Another aside:  We have done a terrible disservice to our young men by gendering vocations. We need young men in nursing, teaching, and childcare. Children need to see these role models, and it solves the pernicious problem of higher unemployment among young men.  In short, we need to make it OK for young men to be the human part of human capital.

For our part, here at Madrina Molly, we are working as fast as we can to figure out how to scale to supply some of the much-needed education and financial and longevity planning information women will require.  Stay tuned.  Like you, #WeRescueOurselves  #NotYoungNotDone

Reading:

Ellevest Magazine https://www.ellevest.com/magazine/personal-finance/great-wealth-transfer-survey

Katrine Marçal,  Who Cooked Adam Smith’s Dinner?

Crain Currency https://www.craincurrency.com/philanthropy/empowering-change-future-philanthropy-female

Copyright © Madrina Molly, LLC 2024. All rights reserved.

The information contained herein and shared by Madrina Molly™ constitutes financial education and not investment or financial advice

Sherry Finkel Murphy, CFP®, RICP®, ChFC®, is the Founder and CEO of Madrina Molly, LLC.

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