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Millennial women are about to get richer, report finds

Allie Kelly   

Millennial women are about to get richer, report finds
  • A great wealth transfer of $80 trillion is expected in the next 20 years. Women are set to benefit.
  • This shift could shrink the gender wealth gap and boost the economy.

Economists expect a great wealth transfer over the next two decades, with as much as $80 trillion changing hands between generations. Women are set to benefit — especially millennials.

A new study from Ellevest, investing and wealth management company, calls the phenomenon "the feminization of wealth."

The study looked at wealth distribution trends, gender pay gaps, and investment habits among women. Between February 2 and February 7, researchers surveyed 2,041 people ages 18—69 with more than a $150,000 salary or $750,000 net worth.

Ninety-four percent of women said they believe their economic power is being underestimated, per the survey.

On average, women tend to live longer than men. And, over time, researchers said they are likely to inherit large amounts of money from boomers and male spouses who pass away.

With the expected financial windfall, many women said they are becoming more financially confident and planning to invest. The shift will likely have a positive impact on the economy as a whole, the survey said, and women will control more money than they ever have.

"By 2030, American women will manage at least $30 trillion, more than the national GDP," a report on the survey said. "We've never seen this kind of change in our lives, or in our grandmothers' lives."

Women are set to inherit more wealth over time

As more women accrue generational and independent wealth, Ellevest researchers expect the gender wealth gap will shrink.

The gender pay gap refers to the amount of money men and women make, while the wealth gap is the discrepancy between what men and women own.

The wealth gap is much larger than the pay gap. It takes into account barriers women might have to making money: lower salaries, childcare necessities, time out of the workforce, less investing infrastructure, the pink tax, and systemic inequalities.

Of the women surveyed by Ellevest, 45% either had received or soon expected to receive a financial windfall, the typical amount being around $300,000. For most women, this doubled their financial confidence.

Almost 80% of women who receive financial windfall also say they feel comfortable challenging long-held money taboos and talking about finances with their family.

When women have access to financial freedom, they will have more capacity to make money and build stability for future generations, researchers said. The gender wealth gap won't close completely, but the change is likely to lead to more women investors and business leaders.

Women invest more in philanthropy and climate causes

Women are likely to invest in other women, hire other women, and pay women high salaries, the survey said. They also donate and invest in philanthropic causes more often than men.

"Women (especially high net worth women) give away a larger percentage of their wealth," the survey said. "They also tend to give more as their income rises. As more women come into money during the Great Wealth Transfer, we could see non-profits become more fully funded."

With financial means, survey respondents said they would plan to donate to organizations supporting women and girls, addressing issues like reproductive rights, women's health, and violence against women.

Millennials invest in impact-based causes at twice the rate of boomers, the survey found, and 88% of millennials say they are also interested in investing in climate causes.

Women make up the majority of people most affected by climate change, and 62% of women told Ellevest that the effects of climate change are one of their top financial concerns. If the women invested just 10% of the $80 trillion they are expected to control by 2030 into climate preservation, that's $8 trillion.

"A world where women control more wealth could look very different," researchers said.

Are you a woman and expecting to gain wealth through financial windfall? Are you willing to share how you plan to spend your money? If so, reach out to this reporter

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