The concept of the “Great Wealth Transfer” is making waves in financial discussions, especially in how it will affect women and the broader global society. As women stand to gain control of significant wealth from Baby Boomers, many are speculating on what this influx of financial power could mean for societal dynamics.
Author Holly Corbett explores this topic in Forbes, weaving in examples of female empowerment and how women’s influence in finance might reshape the world.
A New Era of Women’s Financial Power
The “Great Wealth Transfer” refers to the estimated $30 trillion in Baby Boomer assets that will soon be passed down to the next generation, with women expected to control the majority of this financial shift. This amount rivals the U.S. GDP and represents a seismic economic shift.
But how will women wield this new financial prowess? Research suggests that gender differences exist in how men and women handle money. Studies indicate that women tend to be more altruistic with their wealth, which could influence societal changes on a larger scale.
The Rise of Female Philanthropists
Historically, women have shown a greater inclination toward philanthropy, and recent trends among high-net-worth women confirm this. Icons like MacKenzie Scott, Laurene Powell Jobs, and Melinda French Gates have made significant donations, setting examples of how women use wealth for social good.
Tori Dunlap, founder of Her First $100K, explains that women’s altruism is often rooted in social expectations, which can be both empowering and challenging. While women are conditioned to think of others first, Dunlap points out that financial empowerment must start with self-care. “Altruism only works if you yourself are fed and taken care of,” she says, urging women to prioritize their financial well-being so they can then focus on giving back.
How Women’s Investment Choices Are Shaping the Future of Capitalism
Women may also invest differently than men, as studies show they are more inclined to support companies that prioritize social good. According to the Ellevest Women and Wealth Survey 2024, investing for impact is a top priority for women across generations who come into wealth. The emphasis on socially responsible investments suggests that this wealth transfer could lead to an increase in conscious capitalism, where businesses are expected to benefit not only shareholders but also communities and the environment.
The Freedom That Comes with Financial Autonomy
Nancy Tsuei, a single mother from New York, serves as an example of how women can achieve financial independence through strategic planning and hard work. Tsuei’s journey began with her parents, who, after fleeing the Chinese Communist Revolution, made small real estate investments to secure a better future. Following in their footsteps, Tsuei used bonuses from her corporate career to purchase investment properties, which now serve as an additional income stream.
For Tsuei, financial independence has been critical in allowing her to leave a marriage and support her young daughter. She notes that many women are trapped in unhealthy relationships due to financial dependence. “Money is the freedom to make your choices for the betterment of your life,” she explains, highlighting how financial autonomy is a vital tool for women’s empowerment.
The Gender Pay Gap: A Persistent Obstacle to Women’s Financial Success
Financial empowerment is inextricably linked to gender equity. Women have historically faced barriers to wealth accumulation, from the gender pay gap to the motherhood penalty, which sees mothers’ wages decrease by four percent per child, while fathers’ wages increase by six percent. In addition, women founders still receive only two percent of venture capital funding. The wealth gap widens even further for women of color.
This disparity underscores the importance of advocating for oneself. Jennifer Justice, CEO of The Justice Department, advises women to push for the pay and recognition they deserve. Justice emphasizes that women should collaborate with women-owned businesses and be proactive in financial negotiations. “Where you spend your money matters,” she says.
Normalizing Financial Conversations
Open Money Conversations: The Key to Women’s Financial Success
A key aspect of women’s financial empowerment is fostering open discussions about money. Syama Bunten, founder of Scaling Retail, is launching a podcast which aims to help women become more comfortable with money conversations. She stresses that everyone’s financial journey is personal and that women must first define what financial security looks like for themselves.
The Future of Women’s Wealth
As women gain control over a larger portion of the world’s wealth, there is potential for a more equitable and inclusive society. Jennifer Justice posits that we’ve never seen what capitalism looks like with women in control. “The only way to prove me wrong is to give women half of the money and see what happens,” she says, “and I guarantee you the world will be a much better place.”
Find Corbett’s full article analysis in Forbes for the upcoming shift in wealth management for women.
