Have You Heard of The Great Wealth Transfer? Women Are About to Get Rich.

As we celebrate International Women’s Day on 8 March, there are plenty of deals and perks to look forward to from companies capitalising on yet another occasion in our capitalist society to make us spend. 

While I am always happy when there’s a discount that I can save on, as someone writing for MoneySmart, I would also urge you to spend within your means and only if you need it—not buy something just because there’s a deal. While the occasional treat and indulgence is more than fine if you have the means to, go ahead. But if you’ve already exceeded your budget for the month, think again if you really need that new lipstick or hotel high tea. 

Now with that said, I’m here to share something more interesting that’s impacting us, women in particular.

 

What is the Great Wealth Transfer?

The Great Wealth Transfer refers to the massive intergenerational transfer of wealth currently happening in many developed countries. As baby boomers (those born between 1946 and 1964) get ready to retire, many, especially the ones with wealth, are passing on a significant amount of wealth to the next generation of their families. 

In short, if you’re from a rich family and on good terms, you’ll be coming into some inheritance. 

How much exactly are we talking about? 

In the US, it’s estimated to be about US$129 trillion. And women are going to benefit from it. 

According to investment publication Ellevest, millennial women, a great many of whom are single, are set to receive the most of it. By 2030, American women will manage at least US$30 trillion, which may have a great impact on closing the gender wealth gap. 

This newfound economic power has been coined “The Feminisation of Wealth”, according to Ellevest.

This feminisation of wealth becomes a catalyst for empowerment, almost doubling women’s confidence levels in financial management. 

Ellevest surveyed more than 2,000 people across the US and found that while 45% of all women express confidence in handling money, this figure escalates to a staggering 81% among those who receive a financial windfall, surpassing the confidence levels of men. It also makes it easier for women to talk about money. The survey found that 77% of women giving or receiving a financial windfall feel more comfortable talking about money. 

This newfound financial empowerment not only challenges existing norms but serves as a sign for broader societal transformations. 

​​Receiving a significant amount of wealth can be a transformative force for women, fostering financial empowerment and independence. It opens doors for entrepreneurship, education, and skill development, allowing women to pursue their passions and advance professionally. Women have the means for property ownership and asset accumulation, and through strategic investments and financial planning, can create a more financially secure future for themselves. 

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What does this mean for women, especially Singaporean women? 

The Asia Pacific region holds about 42% of global wealth, according to a McKinsey study cited. Wealthy baby boomers are expected to pass on an estimated S$25 trillion of wealth to future generations. 

For Singaporean women, this shift presents a unique opportunity to break free from economic constraints and play a more active role in shaping their financial future. 

Now we know that men traditionally are the heads of households and manage the finances, especially among older generations. Of course, that’s not to say that all women don’t know how to invest or manage their finances. Some are super money savvy and always advocate the same for women.

The younger generation, fortunately, also seems to be more aware of the importance of growing their finances. (Just the other day, I even came across a Reddit thread where people shared that they observed primary and secondary school kids already talking about investing. Well, good to start young but .. investing with what money?? Not to mention, you need to be at least 18 to open a brokerage account..) 

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But with the feminisation of wealth, greater confidence would empower more women to take charge of their financial security. 

According to Fidelity International’s Global Women & Money Study 2023, 75% of women are anxious about their ability to save and invest. While 55% of women say they are actively managing their finances, only 31% of them feel that investing is for them, indicating a lack of confidence.

The survey also found that 86% of women consider cash savings and insurance as the top financial products they invest in retirement. This corresponds with another survey, the UOB Asean Consumer Sentiment study in 2022, which found that women tend to put their money in less risky products such as fixed deposits and unit trusts, compared to men who tend to put more money in stocks, funds and digital currencies. 

With the great wealth transfer going on, things may start to look different. 

 

How will this change the feminisation of poverty?

The feminisation of poverty is where women are disproportionately affected by poverty compared to men. 

This arises because of the gender pay gap, discrimination against women at work, traditional societal notions of women being the homemakers, etc. Granted, things are already changing with things like paternity leave, news about stay-at-home dads, higher numbers of women in the workforce over the last decade, and more in leadership roles. 

However, these things could be faster. There’s still a gender pay gap in Singapore. In 2023, full-time female employees earned 14.3% lower than their male counterparts, dropping from 16.3% in 2018. 

In comparison, globally, women make only $0.77 cents for every dollar a man makes. 

Imagine what the great wealth transfer can do.

While the great wealth transfer holds the potential to uplift women economically, it’s important to acknowledge that it alone will not eradicate the feminisation of poverty. Systemic changes to issues contributing to poverty must still be addressed. 

The great wealth transfer and feminisation of wealth will bring about new opportunities and possibilities for women for sure. What we do about it is entirely up to us. 

 

Found this article interesting? Share it with your family and friends—both ladies and gentlemen.

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About the author

Audrey Ng is a bargain hunter who tries to sniff out the best deals possible whether it’s food, shopping or travel. She will out auntie the auntiest of aunties.

 

 

 

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