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Welcome to Billion Dollar Energy. I went from a farm town in Canada to a Silicon Valley insider and venture capitalist. I share secrets and insights to help you build wealth, legacy, and freedom.
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My husband and I have meticulously tracked our income and expenses for over 15 years. First, we focused on getting out of debt. Then we started saving. We realized pretty quickly that money in our savings account wasn’t actually growing. In fact, once we understood inflation in our 20’s, we realized it was actually shrinking.
So when I saw this data, I could not stop thinking about it.
A Vanguard survey published this month found that 51% of women hold their non-retirement funds in cash or checking accounts. Of those, 46% are earning less than 3%. Inflation is currently running above 3%.
Inflation is a shadow tax that is slowly and quietly draining wealth from 51% of women.
You can be great at saving, but that’s not the problem.
I was thrilled to learn that women are exceptional savers. Women are also better investors than men once they start. Fidelity's research across 5.2 million accounts found that women outperform men by 0.4% annually, because women trade less, diversify more, and stay the course when markets get choppy.
When women invest, they win.
The problem is that most women aren’t investing. Women are 39% less likely than men to say they invest in stocks. Stock market participation among women has been essentially flat for seven years.
It’s all about time in the market, and women are more likely to miss out than men.
Here is what staying in cash actually costs.
The median retirement savings for women is $50,000. For men, it is $157,000. Same years of working. Completely different outcomes.
A woman parking $10,000 in a standard savings account at 0.38% interest earns $38 over the year. Inflation at 3.3% means her purchasing power dropped by roughly $330 in that same period. She did everything her bank told her to do. She is still behind.
That same $10,000, invested in a low-cost index fund compounding at the S&P 500's historical average of about 10% annually, is worth more than $67,000 in 20 years.
It’s simple, investing might feel risky, but staying in cash is slowly going backwards.
Why women stay in cash.
Most of it comes down to three things:
The first is that cash feels earned. A savings account balance going up is a very real psychological reward. You built it, it is yours, and no market dip can touch it. But it’s only a measurement of savings, not wealth. Savings accounts are for emergencies and near-term needs. They’re not for building long term wealth and financial independence.
The second is that the entry point to investing feels opaque. "Intimidating" is the word most women use in surveys, but what that usually means is: nobody walked me through this, and I don't want to lose what I worked hard to build. That caution is reasonable. It is also costing more than any market correction would.
The third is the infrastructure problem. Only 24% of Certified Financial Planners are women. The industry was built around a different client. And a lot of women are following advice that was never really written for them.
What this could mean for you.
If you have money sitting in a checking or savings account that you will not need in the next 12 months, it has a job to do. A brokerage account and a low-cost index fund is where most people start. Leave it there, for decades if you can.
If you are building a business, pay attention to where the capital is flowing. Women are projected to control $34 trillion in investable assets by 2030, up from $7.3 trillion a decade ago. The question is not whether women will have money. The question is whether they will deploy it. Most have not, yet.
If you are in financial services, this problem is yours to solve. Women are about to control more wealth than any prior generation, and the old playbook built for a different client is failing them at the exact moment they need it most.
Cash is not a strategy. Inflation does not care how disciplined you are.
Hit reply and tell me: is your money working for you, or is it still sitting? I read every single response.
Jenny
P.S. If this landed, forward it to a woman in your life who is saving everything and investing nothing. She's the one who needs it most.
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