They’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.”
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.”