Women, it’s time to walk the talk about financial independence

She underlined that women should start thinking about financial security as early as in their 20s in the face of rising financial hurdles that are unique to the female workforce, including gender pay gap, gender earnings differentiation and gender divergence in super balances. 

“When we talk about the income, the pay gap also, obviously that’s a reflection of the fact that women generally take time out of the workforce if they choose to have children. And that is a big part of the differentiation of male and female’s lifetime earnings,” she stated. 

The co-author of The Female Investor: Creating Wealth, Security, and Freedom through Property also shared insights about the continuing disparity in balances between women and men observed over time and across different age groups. 

“What was interesting during the research phase for our book was that we found that women’s super balances start to diverge from men’s in their 20s, in the late 20s, and they never recover. And they actually get to the widest point, I think in their 40s or and 50s, and it never recovers,” she stated. 

Ms McDougall also revealed that women become financial laggards not just in the workplace, but also due to personal circumstances. 

Citing a report from Workplace Gender Equality Agency (WGAE), the expert stated that “unfortunately, women going through a divorce, many women, older women who may have been out of the workforce for quite some time with older children often get stuck in what’s called a poverty trap”. 

“Because they have been out of the workforce so long that they’re unable to either re-enter or they’re unable to re-enter at a level that’s going to financially support them [and] their children, and potentially will wind up homeless,” she somberly stated. 

She added that a portion of women are left financially vulnerable when they find themselves outside a partnership paradigm. 

“Unfortunately, there’s the fact that people are still getting divorced. How do women protect themselves financially? How do they grow wealth themselves independently outside of their partnership?” she asked. 

With all these sobering statistics, she underlined that women must take charge of their financial freedom and recommended property as an investment vehicle to achieve this. 

“Because [property has] such a low risk, low risk is generally an option as long as you do it right and work with experts,” she commented. 

The expert also recommended not waiting around for the perfect time to kickstart their journey towards becoming financially independent. 

“People will always come up with reasons not to purchase. There [are] opportunities in every single market. Even last year when things were going a bit crazy. You’d have to be very careful about where and what you bought and not be overpaying,” she stated. 

“But every market has opportunities, and it’s always about looking to the future. Certainly for younger women and everything that we’ve just been talking about. The best time to buy property was yesterday or the second-best time is today. So it’s about not worrying about what the market’s doing now, but looking at real estate as a long-term investment and the financial benefits that can flow from that in the decades to come.”

She also offered that women can improve their financial future by having even just one property under their own name. 

“Independent of any relationship that you might get in the future [having a property] can fundamentally change the financial outcomes for women throughout their lives and into retirement,” she explained. 

Ms McDougall also stressed that women should start planning for their own financial future and bolster their financial awareness, no matter what situation they are in. 

She recommended women of all ages level up their financial knowledge. “Whether they’re single, they could be married and their partner doesn’t want to invest. Or they could be divorced, widowed; it just provides information for them so that they can make the best choices about what sort of property they could buy,” she stated. 

Lastly,  Ms McDougall pointed out that there is also a need to “reframe the conversation” about female financial independence.

Rather than viewing it as “anti-love, anti-marriage, anti-joint bank accounts”, she said that at the end of the day, it’s “just about women”. 

“We just really need to reframe the conversation and really motivate and encourage and inspire and educate and inform women to think about their own financial independence. And their own financial futures and what they can do to create their own financial independence throughout their lives,” she concluded. 

Listen to the full conversation with Nicola McDougall here.