Three women sitting on a couch and looking at a smartphone where they can see the findependent app.

5 reasons why you should invest money as a woman

The vast majority of women save regularly. And it is usually the woman who manages the household budget and takes care of the family finances. But many stay away from the topic of investing. Yet it is especially important for women to invest money. We give five important reasons why.

Hardly any interest on the savings account + inflation

The savings account is no longer what it used to be. As an adult, you hardly receive any interest on your money from the bank, and for larger amounts you are currently even threatened with negative interest rates.

In addition, inflation is causing your savings in the bank account to lose more and more of their value. While the prices of various goods are slowly rising on average, the money in your account remains roughly the same, which means that you can buy less with your money than when you put it aside.

At the end of April 2022, annual inflation in Switzerland reached a long-term high of 2.5% (SRF, in German). If you leave, for example, 10,000 francs in your savings account for a year at this inflation rate, the money will lose 250 francs in purchasing power during that time!

As you can see, storing money in a savings account for a longer period of time is equivalent to the gradual but certain destruction of money. Of course, this does not only apply to women, but it is nevertheless one of the most important reasons why you should definitely consider investing money. If you invest money on a long-term and broad basis, you significantly reduce the risk. And unlike a savings account, you can get more out of your savings by investing. With a findependent investment solution, for example, you can achieve a return of around 5% per year.

Read more about the savings account vs. investment solution comparison in this blog post.

Higher life expectancy

Women in Switzerland live on average about 4 to 5 years longer than men (BfS). This means that their savings have to last longer on average. So smart saving is all the more important as a woman.

Gaps in the occupational pension scheme

Women are more often affected by gaps in the 2nd pillar, i.e. occupational pension provision. In summary, there are three reasons why women are able to pay fewer contributions into the 2nd pillar or are even not insured at all:

  • Firstly, women usually do a large share of unpaid household and care work and often work “only” part-time for this. They also take longer leaves of absence, especially due to maternity.
  • Secondly, certain structural conditions of the second pillar, such as the high entry threshold and the coordination deduction, do not play into the hands of part-time leavers, which in turn mostly affect women. More on this in this blog post (in German).
  • Thirdly, women do not always receive the same pay as men for the same work. Statistics from 2018 show that the wage gap between the two sexes in Switzerland was 19% on average, but of this only just under 55% was due to objective factors such as professional position, education or industry. This means that in around 45% of cases the wage difference was unexplained. (BfS)

The result of all this is that women receive less pension on average than men. In Switzerland, the pension gap is 37% – that is around 20,000 francs less pension per year or 1,666 francs per month, which women receive less than men over the entire pension provision. Consequently, elderly poverty in Switzerland knows one gender above all: female.

More on the topic of women’s pension gaps and how they can be avoided or closed in this blog post (in German).

Financial independence

From our point of view, the most important reason why you as a woman should take care of and invest in your own pension provision is your financial independence! You should absolutely maintain this, even if you are married (or plan to be). Because: a man is not a pension plan.

While marriage offers a certain degree of financial protection, the nasty surprise often follows after a divorce. The gaps in occupational pension provision due to part-time work, longer periods of leave, etc. must then increasingly be closed by women themselves. This is because the old practice, according to which women automatically received maintenance payments after divorce until they retired, was thrown overboard by the Federal Supreme Court in a recent series of rulings. Now spouses must primarily provide for themselves after divorce. Marriage is therefore no longer a life insurance policy. (NZZ, in German)

Considering that about 40% of marriages in Switzerland are divorced (BfS) and that women often outlive their partners, this means that many women will sooner or later be responsible for their own finances.

More successful than men

Unfortunately, women invest less frequently, less regularly and also a smaller share of their savings than men. However, according to various studies, they are on average more successful than men – i.e. they achieve a higher return. When investing, women tend to act more deliberately and make more far-sighted decisions, while men tend to overestimate themselves.

Even though investing is not about who earns the most money, there is an important message behind this insight: you can dare to tackle the topic, because as a woman you are just as capable of investing successfully!

Conclusion

As you can see, there are several good reasons why you as a woman should invest at least part of your savings and start planning your finances for the long term.

And since the investment horizon plays an important role in investing, there is no time to lose. Because the longer you can invest your money, the more you benefit from the compound interest effect and the more you reduce the risk (more on this in this blog post).

It is therefore worthwhile not to put off the topic any longer, but instead to inform yourself and then soon gain your own first experience with investing. You will see that investing is actually not complicated at all, even if this myth still persists.

Our recommendation for an easy start: come to a findependent webinar (currently only in German) or read our blog post where we explain investing for beginners in a short and understandable way.

Note: At the moment, neither all of our web pages nor the onboarding and findependent app are available in English. However, we are working intensively to change this. Thank you for your understanding.

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