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Paperkites/iStockPhoto / Getty Images
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Risk-taking has been rewarded in the investing world over the past several years. That’s a big reason why the gender wealth gap between men and women is widening, even as the gender wage gap narrows. |
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Average net worth as of March was $606,000 for women and $794,000 for men, a survey of 18,000 people by Ipsos suggests. That’s a wider gap than in 2018, when average net worth was $276,000 for women and $404,000 for men. Net worth is the value of assets such as investments and real estate minus debt. |
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Women earned 90 cents for every $1 men earned, the latest Statistics Canada numbers show. Men make more, so they have more to invest. But there’s another explanation of the wealth gap that reflects different attitudes toward risk. |
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Men in the Ipsos survey had 61 per cent of their assets in stocks, mutual funds and exchange-traded funds, compared with 54 per cent for women. Women had 25 per cent of their assets in chequing and savings accounts, compared with 20 per cent for men. Women also had 21 per cent of assets in bonds and guaranteed investment certificates, compared with 19 per cent for men. |
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Another take on risk from the Ipsos survey: 38 per cent of women said they don’t like to invest in the stock market because it’s too risky, compared with 32 per cent of men. |
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You can’t just tell people to get more aggressive as investors. They have to feel confidence doing so, or there’s a risk they’ll sell their investments at a loss the first time stocks plunge. But the stock markets have been on a tear in the past five years, and a lot of money has been made. |
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A simple index ETF tracking the S&P/TSX Composite Index should have produced average annual total returns of nearly 15 per cent over the five years to May 31. Savings account rates went as high as 4 per cent over the same period, but 1 to 3 per cent was typical. |
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Especially in today’s uncertain economy, it’s vital to have savings to cover emergency expenses or setbacks such as lost wages or a layoff. But wealth-building is equally important because it brings security and self-sufficiency. Women need that just as much as men. |
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Subscribe to Carrick on Money
Are you reading this newsletter on the web or did someone forward the e-mail version to you? If so, you can sign up for Carrick on Money here. |
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| Rating the robo-advisers
Need a sensible, easy, cost-effective way to start investing immediately? Robo-advisers are a great option. Here’s a ranking of the major players. | | |
| They have good jobs, but can’t afford Toronto
Middle-class people in the Greater Toronto Area are being priced out by expensive housing. They have steady work, but their incomes don’t cut it in a market where average home costs 11.8 times income. Middle-class households are defined as making between $40,000 and $125,000 annually. |
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A tutorial on how to read the extremely useful ETF Facts documents that exchange-traded fund companies must make available to investors. |
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Callout
Whether you’re a new home buyer or looking to renew, we want to hear your mortgage questions. Is a fixed or variable rate the cheaper way to go? Is it better to go to your bank or consult a mortgage broker? Email your question to Globe editor Roma Luciw at rluciw@globeandmail.com and our mortgage expert could answer it in an upcoming column. |
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