It is a truth universally accepted that women investing is a problem.
It is a problem beyond the ‘personal’ because while women invest less than men, we live longer, meaning serious concerns about retirement, pensions, health care, and older age care.
Yet, we, women, don’t spend all our money on shoes and handbags; we are not financially irresponsible. We save but not invest.
Research shows that women favour Cash ISA (seven out of every ten women who have ISA account); only 12% of women have investments, and 20% have no personal pension.
This data screams a clear message – we must encourage women to invest.
- Let us educate women about investing.
- Let us tell them to work through their fear of loss.
- Let us teach them handy tricks to sail through their aversion to risk.
Let me tell you a secret: all these have been done. Writers on investing for women have been chewing on the reasons and enablers with little to no effect.
Why? – you may ask.
Let me show you.
Please indulge me and search for ‘best investors.’
What do you see?
Yes, you see the picture at the top of this post – the faces of many white, older men.
Where are the women? Where are the people of colour? Where are the young?
That picture, friend, is the answer in two messages.
First, ‘investing is not for women’; investing is for white, middle-aged men in pinstripe suits.
And second, there are no role models. Why would any woman learn about investing and break through her loss and risk aversions if no woman has done it before?
(I am not going to expand on the importance of role models. It suffices to say that positive role models are critical to our journey of improvement.)
Today, to honour International Women’s Day, I decided not to lecture about investing for women but to offer you inspiration by telling you the story of Hetty Green, the She-Wolf of Wallstreet.
Who is Hetty Green?
In the late 19th century, Hetty Green was one of the most powerful financiers in the world. When she died in 1916, she was the US’s wealthiest woman and left a fortune of $100 million (approximately $1.6 billion today).
Just so we are clear about her investing acumen, in ‘The Wealthy 100’, Michael Klepper and Robert Gunther ranked the net worth of exceptionally wealthy Americans according to the percentage of the gross national product their fortunes represent. Hetty Green is the only woman on the list and ranks five places below Bill Gates and three places above Warren Buffet.
She made most of her fortune while her story is not a ‘rags to reaches’ one.
Why have you not heard of Hetty Green?
Hetty was the only woman amongst a gaggle of aggressive capitalists in the mid-nineteenth century.
(And we know that many great fortunes were forged around that time because of disruption in technology, mainly railroads.)
I bet you have heard her contemporaries’ names – Andrew Carnegie, Jay Gould, J. P. Morgan, John D. Rockefeller, and the Vanderbilts.
We have all heard about them. Hetty Green’s fortune was comparable with theirs, and yet she is not so widely remembered.
It is not only about being a woman.
Hetty Green was notoriously tight and couldn’t bring herself to spend any money. Hence, she never left a legacy (and frowned on the ones who did.)
How did Hetty Green make her fortune?
Hetty Green believed that making a fortune is easy. In her own words:
“There is no great secret in fortune making. All you have to do is buy cheap and sell dear, act with thrift and shrewdness, and be persistent.”
The reality is somewhat different.
Hetty comes from a Quaker background where self-belief, simplicity of life, and frugality were values held in high esteem. She was also raised in a wealthy family whose fortune was made in whaling oil.
Her brother died in infancy, and her father’s eyesight was failing. Hence, she started learning about commerce, industry, and investing at an early age – reputedly, she read financial reports and economic articles to her father since the age of six. He explained what she didn’t understand and also taught her not to owe anybody anything.
When she came into her inheritance, she bought and sold real estate, railroads, mines, held the mortgages of churches, factories, office buildings, and lent money to whole cities (including New York).
Hetty green left this advice to investing women:
“I advise women to invest in real estate. It is the collateral to be preferred above all others and the safest means of investing money.”
What did people think about women investing at the time?
Let me offer you a quote from an article about women investors published in 1909 in the New York Times:
“Women, it is Wall Street’s conviction, are good winners and bad losers, and that’s why so many brokers dislike to have women speculators among their customers. It is difficult to reason about money and business with an angry and weeping woman. Her view of Wall Street and all its works suddenly becomes entirely emotional, and only a broker with infinite patience can calm her.”
Did Hetty care?
Nope. She just continued buying low, selling dear, and being persistent.
Let this be an example to us all.
Was Hetty Green mad?
It has been muted that Hetty Green was mad.
She hated spending money. She pretended to be poor when building a fortune. Hetty took public transportation and lived in a small flat in New Jersey. Her son Ned lost his leg as a child because she, pleading poverty, refused to pay the doctor’s fee and treated him herself.
She was better known as a miser than as an investor.
She was reputed to change her undergarments when they were worn out, never wash her hands or use hot water and have only the dirtiest parts of her dresses washed.
According to some, her madness served a vital purpose – she freed herself to do as she pleased, to live life on terms that she alone determined.
Do you want to know more about Hetty Green’s life and investing?
Read ‘Hetty: The Genius and Madness of America’s First Female Tycoon’ by Charles Slack.
Hetty Green is an inspiration to all investing women (minus the extreme frugality, perhaps). We are also blessed – these days, we can ‘invest like girls’ without relying on patient brokers to smooth over our womanly sensibilities.