This week’s special report on women and wealth comes to us from our friend Kate Phillips of Total Wealth. Kate co-authored Financial Planning Has Failed with Kim Butler.

If you pay attention to the dominant current cultural narratives about women and wealth in the U.S., you might think women are victims.

Victims of the wage gap.

Victims of the wealth gap.

Victims of sexism, rampant discrimination, and, of course, that dark, shadowy testosterone-driven force intent on holding women back and preventing them from reaching their potential: the patriarchy.

I’m not making light of the very real challenges women around the world face—now or in the past—including poverty and wide economic disparities. If anything, I want to raise awareness about financial realities. But let’s look at the whole truth of these matters.

In this report, I’ll examine the reality of women in America when it comes to earning, saving, giving and net worth. We’ll look at the truth about the wage gap, the wealth gap, and the economic progress of women. Most importantly, I’ll name real solutions that can free women from both economic poverty and the disadvantage of a resigned mindset. After all—prosperity begins with an empowered belief system about who we are and what we are capable of accomplishing!

Women and Wealth: the bad news (and the whole truth).

There are indeed challenges on the path to prosperity that women are more likely to experience. Let’s take an honest look at the wage gap and the wealth gap.

The Gender Wage Gap.

The reality: Working women earn about 80 cents for every dollar men earn.

The Equal Pay Act of 1963 made it illegal for employers to pay unequal wages to men and women who perform substantially equal work. Of course, that did not end discriminatory practices. For years, men were more likely to receive promotions and higher pay.

However, today there is evidence that the “wage gap” isn’t so much a difference in what men and women are paid, but in what they earn, due to a number of factors. Research suggests the earnings gap of 78 to 81 cents on the dollar is not due to discrimination, rather, it is related to the choices women tend to make. Politifact notes, “There is a wage gap, but it tends to disappear when you compare women and men in the exact same jobs who have the same levels of experience and education.”

In some ways, women appear to have some advantages. Once less educated than men, women now earn 57 percent of all bachelor’s degrees in America, according to Glassdoor.com. And companies eager to create a gender-balanced work force have made women the preferred hires in many fields. Data from LinkedIn.com demonstrates that women apply for 20 percent fewer jobs, yet are 16 percent more likely to be hired for the jobs they apply for than men—18 percent more likely if the job is a senior position.

When it comes to economic opportunity for women in America, the tide has turned. Examining the earnings of Millennials, there is no wage gap. An analysis of 2008 Census Bureau statistics done by Reach Advisors, a private research firm based in New York, led to a surprising finding. The median full-time salaries of young women in American metropolitan areas were found to be 8 percent higher than of men in their peer group!

And yet, the overall gender earnings gap stubbornly remains. Why is that? There are several reasons:

Women choose lower-paying career fields.

According to a 2017 research report by Glassdoor.com, “Nine of the 10 highest paying majors we examined are male dominated. By contrast, 6 of the 10 lowest-paying majors are female dominated.” More men choose tech and engineering fields that lead to higher-paying jobs, including computer science. More women choose social work, nursing, and majors that lead to lower-paying roles in social science and liberal arts fields.

Women work fewer hours, on average, than men.

According to a 2015 American Time Use Survey by the U.S. Bureau of Labor Statistics, employed men work an extra 3.5 hours per week, or 14 hours per month. That adds up. Women are less likely to work overtime or earn holiday pay. And those are figures for “full time” workers. Additionally, women are more than twice as likely as men to work part-time voluntarily, according to Bureau of Labor Statistics.

Women often leave the work force temporarily to raise children.

This means an interruption in experience as well as wages, usually translating into fewer opportunities for advancement and lower future social security earnings. Inevitably, when a woman takes time off, her former co-workers gains an advantage in seniority, experience, and promotions.

The negotiation gap.

Several studies have shown that women are less likely to negotiate salaries when offered a job. A decade ago, the difference was pronounced: a Carnegie Mellon study found just 7 percent of women attempted to negotiate job offers, as opposed to 57 percent of men. More recent studies such as one conducted by Earnest.com show the negotiation gap is closing, particularly with younger generations.

Carol Frohlinger, JD, coauthored a survey of more than 500 women to determine how they approach salary negotiations. She found only 16 percent ever attempt to negotiate for themselves. Says Frohlinger, “The reality is… most women are reluctant to advocate for themselves.”

It takes time to “catch up.”

We see no differences in earning power among younger women and men, aside from choice of careers. Yet your mother and grandmother may have worked substantially less, been less educated and had far lesser opportunities and/or ambition. We have to remember that less than 100 years ago, the great majority of women did not aspire to work outside of the home. In the year 1900, only 6 percent of women worked outside of the home. Even just 50 years ago, the majority of women did not work for pay.

Since then, many things have changed. Societal norms and perceptions have shifted. Women are redefining themselves with new skills and confidence. There are more female role models in business and more companies eager to hire and promote women.

Women have different priorities.

I was a realtor for eight years—a position in which I was paid solely on commission. Once an “old boy’s club,” the field has been women dominated for about two decades. However, top earners in the field are still disproportionately men. A gender wage gap study by the Institute for Policy Research showed that male brokers and agents earn a whopping 43% more than women in the same position—$61,771.71 annually compared with a median income of $42,987.62. NarrowTheGap.co reported a large earnings gap exists between men and women who are salespeople in securities, commodities and financial services—another commission-driven field.

In positions solely based on commission, this doesn’t represent discrimination—this represents results. Whether through working longer hours, delegating to a team, investing in sales training or using high-tech systems that give them the edge, men are selling more. While one analysis showed women are more likely to close deals—they simply aren’t working to do so.

My theory of the discrepancy, I explained in a blog post several years ago,  “Why Men Play Football and Make More Money,”  is that women often have different priorities when it comes to their time and energy. Women can be successful and ambitious earners, but are more likely to prioritize work-life balance, flexible schedules, and nurturing relationships over economic gain. That’s not a bad thing—we just need to make sure we ultimately take care of ourselves financially.

The whole truth: Historic discrimination against women has all but vanished. Yet some women still earn less, primarily due to choices that disadvantage them economically.

The freedom to choose!

As someone who has always felt responsible for determining my own income, the “gender wage gap” is a bizarre concept to me. I believe we can choose the life we want. Both as women and as Americans, we have economic mobility and tremendous freedom. Whether you prefer to be a stay at home mom, a high-powered executive, a business owner or a woman who artfully balances family and work, you have the freedom to choose.

When my daughter was born, I worked as a waitress. Then I co-owned a restaurant. A few years later, I was a single mom working flexible hours and earning six figure commissions as a realtor. It wasn’t always easy. But never for a moment did I imagine that I was being held back by my gender. (If anything, I felt being a woman was an advantage!)

Now, I choose a different lifestyle. I am no longer tied to my cell phone or a physical location. I can work from my home in the mountains of Washington State, from an oceanfront condo in Hawaii, or while visiting my mom (as I am right now!) I have always valued time flexibility and my location freedom more than a corner office and “golden handcuffs.”

The Gender Wealth Gap.

The reality: Measured in terms of net worth, women’s wealth lags seriously behind men’s wealth, especially among single women.

While the wage gap is narrowing, the statistics on disparities between men and women when it comes to net worth are not pretty. According to a 2018 Barron’s article based on a Bank of America Merrill Lynch study, “The Stubborn Wealth Gap Between Men and Women,” a woman may accumulate about $1 million less than a man at the time she retires.

In addition to a tendency to earn less, primary reasons for the gender wealth gap include:

Longevity.

Women live four to five years longer than men, on average. Yet married women tend to retire two or more years earlier. The result is that women draw substantially lower social Security checks (about $4k less per year than men) and try to make their incomes and retirement savings stretch—five to ten years longer. By working less and living longer, women often live on lower incomes and worry about running out of money in retirement.

The savings gap.

The fact is, women need to save more than men during their working years—yet they rarely do. Prudential’s 2018 Financial Wellness Census™ found the women and men they surveyed both expected to retire at age 67, on average. But the women had saved an average of $115,000 compared with $203,000 for men—that’s 43 percent less. Nearly half (46 percent) of the women reported no retirement savings.

Student debt.

Women tend to graduate with more student loan debt–21,619, vs. $18,880 for men, according to a 2016 analysis of U.S. Department of Education data. Yet because they choose lower-paying fields, they pay it back more slowly. According to Fool.com, women represent 56% of college graduates, yet hold two-thirds of college debt.

Gaps in income.

Women are much more likely to incur multiple gaps in income during periods of caregiving—not just for children, but also for parents, and spouses. Women are more likely to cut back or leave work to become caregivers than men. (I cut back on work to be my father’s caregiver for four years. It was a very financially challenging time.)

Single Parenthood.

Women are also about 4 times more likely to be single parents, either following a divorce or as the result of a child born outside of marriage, according to U.S. Census Bureau figures. As a single parent, a woman is tasked with balancing work and parenthood, sometimes without financial support from the children’s father.

Widowhood.

Because women tend to live longer and often marry men who are (on average) two years older, women are nearly three times as likely to be widowed (37% vs. 13%, according to Pew Research). The average age of widowhood is 59, says the U.S. Census Bureau. And widowed women are twice as likely to live in poverty, according to the National Institute on Retirement Security.

Healthcare costs.

Healthcare expenses average 23% more for women than men, according to government figures from CMS.gov. Some of that can be attributed to costs of childbirth, reports RegisteredNursing.org. Longevity is also a factor, as people have greater healthcare costs in their later years when healthcare expenses are the highest.

Progress and possibilities.

Although financial statistics about women and money can sound daunting, that is only part of the story. The whole truth is that women have never had the financial opportunities, clout and choices that they do today. Focusing on the progress and the possibilities gives us a very different picture!

Women and Wealth: the good news!

Women in the U.S. (and women in many, but not all countries) have more wealth, more economic power, more upward mobility and more freedom than ever before. In some ways, we see women outpacing men. And it’s not a competition—ideally, everyone will be prosperous! Here is some progress to celebrate:

Women in leadership.

No longer are positions of power held exclusively by men. Lockheed Martin, PepsiCo, Anthem, IBM and General Motors are just some of the Fortune 100 companies with female CEOs in the driver’s seat. Sheryl Sandberg is the COO of Facebook. The International Monetary fund is managed and chaired by Christine Lagarde. Until recently, Janet Yellen served as the Chair of the Federal Reserve.

In 2019, of 535 U.S. members of Congress, we see 127 women, 47 who are women of color. On both the political right and left, inside and outside of Congress, we see women of diverse backgrounds rising as leaders and influencers.

Women in business.

Women who want to raise their own glass ceiling and define their own success are finding a pathway in entrepreneurship. In recent years, women have been starting businesses at a brisk pace—faster than men. Female-led businesses having grown an impressive 58 percent from 2007 to 2018.  According to Guidant Financial, four of every 10 U.S. businesses are now owned by women.

When The Balance asked readers, “Which entrepreneur do you admire the most?” the overwhelming answer was “Oprah Winfrey,” who garnered more votes than Bill Gates and Richard Branson combined. Perhaps no one symbolizes the potential of women in business more than Oprah. A self-made woman from the humblest of means, Winfrey remains a role model for any woman willing to dream big, work hard, and believe in herself.

Women in the boardroom. 

Women bring a valuable perspective. Venture-backed companies that include females as senior executives are more likely to succeed than companies with only men in charge, concluded Women at the Wheel: Do Female Executives Drive Start-Up Success? a report by Dow Jones VentureSource. Organizations that are the most inclusive of women in top management achieve 35% higher return on equity (ROE) and 34% better total return to shareholders versus companies without this diversity. A recent Forbes article details further evidence that diversity in both gender and ethnicity within leadership leads to greater profits.

Women with assets.

Women own and control greater wealth than ever before. The American College estimates that 45 percent of American millionaires are women, or, about 1.5 million. According to RBC Wealth Management: “By 2020, women are expected to control US$72 trillion, 32% of all wealth and up from US$51 trillion in 2015.” And millennial women are entering the highest circles of asset ownership even faster than women born earlier.

The Credit Suisse Research Institute estimated women’s wealth globally at a higher 40 percent, noting that their figures differed because they were accounting for “non-financial assets,” which would include such things as land, buildings, and intellectual property. Their estimate of women’s wealth in Europe and North America was as high as 45 percent.

Women are also joining the ranks of the ultra wealthy. Forbes reported that the number of women in the list of 100 wealthiest individuals has risen from 4 percent in the year 2000 to 10 percent in 2018.

Financial and legacy decisions.

More women are taking control of decisions around wealth and legacy, says research from RBC Wealth Management. As more and younger women earn greater wealth, they are becoming decision makers over the full range of finance-related issues. One notable finding is that while less than half of Boomer women say they are their household’s primary decision maker for financial planning, 72 percent of Millennial women are assuming that role. Millennial women also identified themselves as primary decision-makers in charitable giving (67 percent) and household expenses (54 percent).

The truth about women investors.

According to research from Fidelity Investments, women may be better investors! They tend to trade less, opting for long-term strategies that decrease fees, risk and complexity. Multiple studies from the UK revealed that women are less likely to invest, but tend to out-earn men when they do.

The “Power of the Purse.”

Women control or influence up to 83% of household purchasing decisions, a fact which advertisers are now paying attention to. That’s 7 trillion dollars of spending in the US each year.

7 Steps to Become a Wealthy Woman

Women of all backgrounds can create wealth! You don’t need an inheritance or even a high income to build wealth, if you are disciplined.

1.  Change the narrative.

Thinking of yourself as a victim is a sure path to self-sabotage and frustration! What you focus on truly matters. So focus on the reality you want. If you want to be successful, powerful, prosperous and free—focus your thoughts on that! That can be your reality, but you must be able to embrace it in your mind in order to create it in your life.

2.  Earn more.

You should definitely spend your time doing something you love. But don’t assume you can’t earn excellent money doing it! Look for role models, think outside of the box, and/or learn new skills or ways of doing what you love that can create the income you desire.

3.  Save more.

There’s no getting around it. Women must save more than men, on average, to ensure a similar financial result. We recommend saving as much as 20% of your income, if at all possible. Wherever you are with your habits, start saving “more.” If you are not saving now, can you start putting away 5%? If you are saving 5%, can you bump it up to 10%? (Yes, of course you can!)

4.  Buy a home.

Buying a home is one of the most important things a woman can do for herself! While it represents a commitment at first—a down payment and perhaps a higher monthly bill—within a few years, you’ll notice that the same property would cost you more to rent. Even more importantly, you’re not wasting hundreds (or thousands) or dollars every month that you will never see again.

Homeowners have substantially higher net worths than renters. A recent Federal Reserve Study showed that the net worth of a homeowner is over 44 times greater than that of a renter! When the Joint Center for Housing Studies at Harvard University focused on homeowners and renters over the age of 65, they found an even larger disparity. Their study revealed that the average net worth of a homeowner ($319,200, consisting of $143,500 in home equity) was 47.5 times greater than the average net worth of a renter (with an average net worth of $6,710).

It’s not always the right time or situation to purchase, but paying rent is always an economic waste. Additionally, older homeowners with equity have more choices and can even turn a home into a steady income stream with a reverse mortgage, if desired.

5. Get life insurance.

Many people think that life insurance is only for young couples with children at home. They purchase term insurance that expires before they will need it, just like a warranty that expires before it is used. Others use life insurance just for “final expenses.” But you can also strategically use permanent whole life insurance to insure that a spouse or partner’s income is replaced—no matter what age they pass.

Even if you are not married, a life insurance policy for yourself with a long-term care benefit rider may be an excellent strategy to help you grow cash over time while obtaining protection against unknowns. If you have heirs or charities you want to support, it is also an excellent way to leave a legacy that is much more tax-efficient than a retirement account. (Contact Partners for Prosperity for more information or a quote/illustration.)

6.  Re-think retirement.

Women live longer, but they do not tend to work longer. Many women retire too early to be economically independent in their later years. We need to revise our expectations about retirement and remain productive as long as possible. When full time work becomes no longer possible or desirable, consider part-time work or an enjoyable freelance occupation.

7.  Prioritize your health.

Even with Medicare, healthcare and medical costs can swallow enormous sums of money. Take care to exercise regularly, eat healthy wholesome food, drink lots of water, and maintain a positive outlook. Even if you are not in perfect health, focus on what you can do—and practice gratitude. (It’s good for your health!)

Do those seven things… and you will glide into your later years with confidence, knowing that you have taken care of your money—and your money will take care of you!

For more from Kate Phillips, download her 22-page guide, “Breakthrough to Abundance: 4 Reasons Why You’re Stressing About Money (and how to break the cycle forever!)” at TotalWealthCoaching.com. You can also follow Kate on Facebook where she does live videos twice a week.