The Sit-It-Out Syndrome: Why Women Are Afraid to Invest Their Hard-Earned Cash

Carrie Sloan
Posted

women investThey’ve earned it. They’ve saved it. And there it sits—a big pile of money in their savings accounts.

At least that was the case with a handful of high-earning women I interviewed. Single, cohabitating, East Coast, West Coast … and they all had one thing in common: They were sitting on sizable nest eggs that were earning a paltry 1% or so. And for various reasons—ranging from fear to self-described “paralysis”—they were reluctant to invest it in the stock market.

It’s a disconcerting phenomenon that I’ve dubbed the “sit-it-out syndrome.” If this were a Jane Austen novel, my fair heroines would be perched on the sidelines, clutching their reticules, while the ball went on without them. Ironically, in 2013, they’re VPs at ad agencies, marketing execs at Fortune 500 companies and middle-school teachers who’ve perfected the study of saving.

In fact, they’re part of the nearly one in four American women who are bringing home the bigger paycheck, but according to what they told me—and what recent research backs up—once they amass a nice sum of money, they don’t know quite what to do next.

Why Smart Women Won’t Invest

Is the sit-it-out syndrome a hangover from the Great Recession, or did we all watch too much Mad Men and internalize retro relationship roles?

It may be a little bit of both: A recent Fidelity study that we’ll explore shows that fewer women than ever feel confident about wielding control of their own purse strings.

“I’ve got $75,000 sitting in a savings account,” says Diane England*, 38, a VP at an advertising agency in Manhattan. “I know I could get more return investing, but I don’t know where to begin. I am frozen by my lack of knowledge and my insecurity that, at my age and income bracket, I should have a clue.”

RELATED: Could You Be a Victim of the Ostrich Effect?

England, who’s single, isn’t saving for anything in particular, except maybe a down payment on a future beach house. “But that’s not really why I hesitate,” she says. “It’s more out of insecurity and feeling overwhelmed.”

  • guest

    The article makes me feel ill. My money could have been doubling every ten years? I’m in my forties with over a million in the bank. My stomach gets tight even thinking about putting my money at risk, though.

    • freezin1

      I don’t have over a million, but substantial amount. Same here. The thought of losing it, as a single woman in my 40′s is too much :(

  • Arghya

    Nonsense. They simply sit on the money so that they can blow it on shopping.

  • dedicated saver

    Well you have a great nest egg/emergency fund. But would you really miss 5% to start investing with? It does not have to be an all or nothing proposition. Diversity is paramount. Or maybe you just max out a roth/traditional ira to choose some mutual funds with investment strategies you agree with. I just started my roth ira last year (1/3rd of my 12-month emergency fund) to fight inflation and diversify my future potential income. I have 30years ahead of me to stay the course against market gyrations and enjoy tax free earnings at the end =25% savings rate right there.