Overcoming the status quo.
EDITION 01: INVEST ON PURPOSE.
Did you know…
October 28, 2024 was the 50th birthday of the Equal Credit Opportunity Act, which made it unlawful for any creditor to discriminate against any applicant on the basis of race, color, religion, national origin, sex, marital status, or age.
Before this went into effect, many women were denied loans, mortgages, and credit cards without a male co-signer, limiting their financial independence.
And while we’ve made a lot of progress, women still lag men in our use of digital financial services and in our financial confidence.
Let’s dive in.
Imagine this…
You have known and cared for years about climate change. You’ve made changes in your habits and influenced some of your family members to do the same. Most recently, you have been following a friend’s journey on social media that is chronicling how her family is navigating the destruction of their home after the most recent hurricane.
You decide you want to do more than donate to disasters. You want to put money toward preventing the disasters from happening in the first place, knowing that investing in emerging climate companies could help advance their missions more quickly.
You start doing some research. You get inundated with different types of climate funds, walls of text & complex financial terms, and vague “Contact Us” forms that leave you wondering how to really get started.
You close your computer and walk away with the intention of figuring it out at a later time that, in all honesty, may or may not come.
Why is this?
Welcome to the Status Quo Bias.
We tend to not change an established behavior unless the incentive to change is so motivating or so easy to do that we can’t ignore it. (I mean, just think about the $100 billion fitness industry that markets to our struggle to change our exercise habits.) Our brains inherently create shortcuts to make it easier to do things and to stick with what we know, so a deviation from the shortcut makes it harder to take action and sustain the changes we want to see.
So, on the example of investing in climate change, although our motivations can be quite high, if you have an overwhelming number of options to learn from and to invest in, it becomes easier to just stay with what you know, the status quo.
Women are socialized from a young age into believing we know less about money, despite being 50 years post the Equal Credit Opportunity Act. To add to this, we are raised to strive to do things perfectly, and if we are unsure if we can, we often tell ourselves we just need to learn more before taking any action. (We’ll talk about how this relates to our decision to become first-time founders in our 40s in another newsletter.)
But time is a precious resource. The concept of “just need to learn more” takes time and becomes a never ending cycle, allowing us to put a change in our habits on the back burner. This “just need to learn more” is one of the reasons why as women, we rate ourselves as having lower financial confidence, and why we take less advantage of the financial resources and products we have access to today.
How to apply this…
First and foremost, let’s celebrate progress and how far we’ve come. 50 years ago women needed men to co-sign our lives and our financial freedom. Now we own and control more money than we ever have before. By 2030, women in the US are expected to control $30 trillion in financial assets—that’s the size of the annual GDP of the US. And younger women, in particular, are twice as likely to be taking the lead in their family’s financial decisions than previous generations.
Consider what is important to you. Regardless of how you are invested today, or where you spend your money and your time, what do you value? Whether intentional or not, your money and your time have an impact. What do you want to see more of in the world? What part do you want to play in it?
Chunk out any changes you’d like to make. If you are wanting to make changes to the financial services you use and the strategies you implement, it can be overwhelming to consider how to get to the end state. Break it down into smaller chunks that you can immediately take action on. Actions, thoughts, and feelings are all interconnected, and sometimes you have to just start with an action and the thoughts and feelings will catch up. (I guess that old saying “fake it till you make it” has some merit.)
In summary…
Women have come a long way financially. Let’s celebrate the progress we’ve made, but break out of the status quo so we can stay vigilant about pushing forward.
At BeeCene, we’re eliminating the binary between doing well financially and doing good for the world. We believe you can put your money to work (invest your dollars) in companies you care about that are making the world a better place, and earn a healthy return for your investment. Putting your money to work harder, ultimately helping you build wealth.
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For stories to fire you up on what women’s lives were like before the Women’s Rights Movement, check out this Buzzfeed article.
Sources
https://www.linkedin.com/pulse/celebrating-50-years-equal-credit-opportunity-vifkf/
https://www.behavioraleconomics.com/resources/mini-encyclopedia-of-be/status-quo-bias/
