A plethora of statistics demonstrate how far behind women are, on average, when it comes to building wealth. This is largely due to systemic factors such as time out of the paid workforce to undertake unpaid caring roles. 

The impact of this is sobering. Research from the Australian Human Rights Commission shows half of all women aged between 45 to 59 have $8,000 or less in super. The figure for men is $31,000. 

This is not cause to be defeatist when it comes to wealth creation. There are plenty of females who have built sizeable fortunes, despite facing very unfortunate circumstances. 

Louise Bedford is one. Her wealth building journey started 20 years ago when she attended a seminar about the share market. 

“I thought to myself, it’s about time I took control of my money. Back then, I was flying high as a national manager for a large, global company. My professional ambitions had finally begun to come true. At the same time, I started to trade shares alongside my day job.” 

Then everything changed. Over a few months, Bedford progressively lost the use of her arms through an unexplained tendon condition. Even simple tasks such as opening doors became a painful struggle; dressing, driving and feeding became daily challenges. 

“Because of this, I had to quit my terrific job. I felt black most of the time, unable to picture my future.”

One day, she told her accountant she couldn’t work and she was going to start trading shares fulltime. 

“I heard him smother a cackle. He said, ‘hardly anyone makes it as a trader, especially not someone like you. Look at you, you can’t even type your orders into the computer.’

“I got angry and then I got even. I learned how to type with a pen in my mouth. It opened up a new world. I could trade shares online and email my friends. It meant freedom.”

She has some fascinating insight into the current market.

“Very few sectors in the Australian market are considered hot; that is they are outperforming the All Ordinaries. Energy is the main sector where there is potential, so I have some positions open in this industry.”

Bedford says she has been stopped out of some positions as the market has turned bearish. This means as the market has dropped, she has sold certain shares as their price has dropped.

“I’ve had to manage my remaining positions more closely. I use an indicator called a macro filter, which tells me when I can open trades and when I should step away from the markets. Until very recently, the macro has been off, so I haven’t been opening new positions on the Australian market.”

She says there are signs the market downturn may have reached a nadir. “There’s a recovery in the top market segment, which bodes well for more bullish times to come. Traditionally, as we recover from a downturn in market sentiment, the money floods back into the shares with the highest levels of market capitalisation.” 

Necessity is a common impetus for women to take a more proactive approach to wealth creation. Both Bedford and Yvette Adams have adversity in common. And both are very successful investors.

“I had a stroke in May 2022 and heart surgery in June 2022. Then I contracted COVID in July last year and on top of that I broke my foot,” says Adams. 

She says her tricky personal situation has given her more time to get her affairs in order, do research and talk to experts such as real estate agents, mortgage brokers and accountants to garner information before investing.

“It’s also given me confidence my approach to investing of buying cash-flow-positive properties in areas I think will see growth has been a good one. As interest rates have gone up, my properties are all still cash flow positive.” 

Most of Adams’ assets are in real estate. She owns a commercial property in Newcastle in NSW with her business partner, also female, as well as a number of units in Bundaberg in Queensland with her life partner. At the moment, she’s investigating building another property on the apartments’ block. Other assets include her business, digital marketing agency The Creative Collective, and a share portfolio.

As she takes a long-term view, the current market downturn hasn’t affected her perspective on her assets. “I just keep going. In terms of a property, a deal is a deal. You’re in a pretty sound position if you make a good investment and fix your interest rates long term and know your worst case scenario.”

She believes there are still many good investments, despite the somewhat desultory market conditions. She suggests looking for real estate in regional areas. “With interest rates rising, there are massive rental shortages. You just need to do your homework and your figures to assess whether an asset has promise.”

Despite recent market machinations, Adams is keen to explore the investment potential of more exotic assets such as non-fungible tokens and crypto currency. 

“I invested in crypto in 2017 and turned $3,000 into $27,000 in a short time frame. But the platform through which I invested ended up being a Ponzi scheme and I lost it all. I’ve been a bit gun shy since then. But I plan on having another crack as I still have a lot of friends doing very well in it. I will be asking them as much as I can, then doing online research before investing.” 

Bedford and Adams are in the minority in a world in which many women have very little wealth. Pete Pennicott, a director of financial advice firm Pekada, explains why so many women end up with a substantially smaller nest egg compared to their male counterparts. 

“Women start from behind. They don’t earn as much and take career breaks, which is hard to make up in their wealth-building.”

There are steps women can take to redress their financial disadvantage, says Pennicott.  

“Always maintain some level of financial independence and have a good awareness of your wealth creation plans. Do not make the mistake of leaving it to someone else and trusting they have it under control.”

He says women who have taken a career break who are in a partnership can take advantage of catch-up concessional super contributions and super splitting when they are not working, to help them build retirement savings.

On a more practical level, it’s an idea for everyone, not just women, to do a budget, to get a picture of spending habits and where savings can be made. 

“Most importantly, always set aside some cash to apportion to long-term wealth creation investments. Start this as soon as you can and let the power of compounding do the heavy lifting in building wealth”, says Pennicott.

He says the current dip in the value of assets such as property and shares may be an opportunity to accumulate quality growth investments for the long term. 

“Given the uncertainty in the market at the moment, dollar cost averaging into shares by way of a regular savings plan every month is a strategy that warrants consideration.  

“Like all good habits, the power of this approach is its regularity. So auto-pilot this strategy to remove the human element by setting up recurring transfers to go into an investment each month. Also seek advice to understand the best tax structure to invest the funds in, depending on your situation, inside or outside superannuation. The idea is to smooth your average purchase price and avoid the temptation of trying to time the market.”

https://www.afr.com/wealth/investing/women-investors-take-adversity-in-their-stride-20221130-p5c2nd