Many women are constantly searching for a clear way to increase their wealth, but the answer is right in front of them every day at work. The most fundamental way for working women to increase their investment capital is to get a raise.
A 10 percent salary increase for a 30-year-old woman earning $45,000 a year, invested over 35 years with an average annual return of 6 percent, could mean additional accumulated wealth of half a million dollars upon retirement at age 65.
Recent studies show that women’s earnings on average are about 77 percent of men’s. To address this, President Obama signed directives earlier this month to make it easier for federal contract workers to get information about workplace compensation. These directives prohibit companies from punishing workers who share salary information, as would pending legislation that applies to all companies. The goal is to make it more difficult for companies to falsely argue that gaps in pay aren’t gender-based, and to pave the way for class-action lawsuits when cases of gender bias can be made.
Yet removing barriers is only one answer for women seeking to boost their earnings. The other is to realize that in business and professional jobs, their financial destinies are, to a large extent, in their own hands. This means resolving to make it happen. Before I was a financial planner, I worked for several companies, rising to positions including controller and chief financial officer by improving my job performance. None of my success was an accident. I made it happen by working hard and making the right moves.
Women need to realize that the people who get higher salaries tend to be the people who ask for them. Most of these people are men. Numerous studies on the gender pay gap conclude that a key reason men get higher salaries on average is that they’re more inclined to negotiate. Many women are less likely to negotiate because they tend to lack self-confidence.
You can build this confidence gradually by taking the right steps. Then you will truly believe that you’re worth more money. If you don’t believe this, you won’t project it and your company won’t value you as highly.
These steps include:
• Do your homework. This means determining what your industry pays for jobs requiring a comparable level of skill and responsibility to yours. Various websites offer this information, including www.glassdoor.com, www.payscale.com, www.indeed.com and www.beyond.com. If you’re just starting out, this research is essential. Why apply to companies that pay low? If you already have a job, this pay information might tell you that you’re being underpaid for your industry. If further research tells you that your company pays lower overall for its industry, maybe you joined the wrong company in your field. But perhaps you can fix this by getting a raise or, if that doesn’t work, by changing companies.