Do Men or Women Have a Higher Net Worth?

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Having a high net worth sets you on the path toward financial security. The term "net worth" means the total of your assets minus your liabilities. If you add up the value of what you own and subtract all that you owe, you'll find out what your net worth is.

Comparing your own net worth to others can be helpful to see where you stand. However, looking at the overall average net worth doesn't tell the full story, since there's actually some big differences between men and women.

So, who has a higher net worth? Here's what you need to know.

Men vs. women: Whose net worth is higher?

According to new data from Earnest, men have an average net worth that's well above their female counterparts. Despite having similar levels of cash, and similar amounts of debt (with men actually owing slightly more on their credit cards), men have a higher average net worth at $12,188. But women have an average net worth of just $5,541.

Men have a higher net worth than women for many different reasons. One issue is the gender pay gap. In 2022, American women generally earned $0.82 for every dollar men earned, according to Pew Research.

This gender pay gap has been very persistent. In fact, in 2002, women earned $0.80 for every dollar men earned, so female workers have picked up a whopping $0.02 extra in two decades of efforts to improve equality in the workplace. Not very impressive progress.

Women are also more likely to step back from work to assume caregiving responsibilities, either for children or for elderly relatives, impacting their earning ability.

There's also another issue, though. Men are more likely to invest than women. Earnest found that the average woman has 26% less in her investment accounts than the average man. While men had account balances averaging $26,717, women averaged only $19,541.

Women who don't invest as much lose a huge opportunity. When you put your money into the stock market, it works for you and you can benefit from compound growth. Your returns are reinvested and earn more money without you having to deposit more.

How to close the net worth gap

Ultimately, closing the gap in net worth between men and women would require some big societal shifts, including serious reforms to ensure women are paid fairly, as well as more men taking on primary caregiving roles and leaving women to pursue their careers. It's unclear how much progress is going to be made on these issues, though, given that it took 20 years to get an extra $0.02.

Individual women can and should try to invest more money, though. It may seem daunting, but it can actually be pretty easy to open a brokerage account or sign up for a workplace retirement plan, transfer money into it (and ideally set up regular recurring transfer, and buy an S&P 500 fund or other index fund that tracks the performance of the market. You don't need any specialized knowledge to do that.

Both men and women benefit from investing as much as possible, reducing debt, and smarter spending so there's more money left over to save. However, it's especially crucial for women to think seriously about how they can grow their net worth since they're behind men financially on average. Plus, women statistically live longer than men, so they will need more money in the end to provide for their potentially longer lifespans.

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