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Makin' Money

Another punctured money myth

Chris Farrell Jun 22, 2011

When it comes to money, women are from Venus and men from Mars, women research and men flip a coin, and so on–or so we’re told. A yawning gender gap about investing and money is a staple of the personal finance marketing industry.

Problem is, it’s nonsense. I don’t buy it. The money divide is little more than the packaging and repackaging of moldy stereotypes, all with the aim of pushing products and perspectives.

Take a look at a new study on IRAs by the Employee Benefits Research Institute. Among it’s findings is that men and women have similar investing styles with their IRAs. Both genders also reduce their exposure to equities as they get older and boost their holdings of bonds and other assets. Some divide!

Specifically, in 2008, females and males under age 25 had invested 49.1 percent and 49.5 percent, respectively, in equities, while women 70 or older had invested 33.1 percent and men had 33.6 percent in equities. Overall, male and female IRA owners had virtually identical allocations in bonds, equities (not including the balanced fund portion), and money. However, males were slightly more likely to have assets in the “other” category, while females had a higher percentage of assets in balanced funds.
Furthermore, IRA owners (both genders) under age 45 were significantly more likely to be invested in equities and balanced funds combined than those over age 45. Those over age 45 were more likely to be invested in bonds and other assets. The percentage of assets in money across each age group was around 21 percent.

Not much of a divide is it? It’s time to lay the “gender gap” money myth to rest. Toss it the next time you get a marketing brochure based on that supposed “insight”.

Of course, there are gaps in our society, but gender and investing isn’t critical. What does matter. How about the disturbing divide in money experience and financial knowledge between those with a college degree (and more) and those with only a high school diploma (and less). That gap is important on so many different dimensions of modern life.

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