The Shortage of Women Billionaires

By Robert Frank, CNBC.com

News that Gina Rinehart may be the richest woman in the world highlights one of the oddities of today's wealth: why aren't there more women billionaires?

The vast majority of women billionaires around the world made their fortune through marriage … According to Forbes, 104 of the world's 1,226 billionaires are women. That's about 8.5 percent, even though women make up half of the total population.

The ranks of self-made rich women are even smaller. The vast majority of women billionaires around the world made their fortune through marriage (and divorce) or inheritance, according to various lists.

In the United States, only about a half-dozen of the richest 400 are self-made women - or slightly more than 1 percent. They include Oprah, Meg Whitman, Lynn Tilton and Sara Blakely, the founder of Spanx. The Gap's Doris Fisher and ABC Supply's Diane Hendricks are also on the list, since they co-founded their companies with their husbands. (Facebook's Sheryl Sandberg may also soon be added to the list.)

The big question is why so few women reach the rarified heights of billionaire-dom. They are climbing the ladder in every other segment of the economy - education, jobs, income. They are even gaining ground among millionaires, accounting for somewhere between 37 and 50 percent of American millionaires.
Yet somehow, they can't break the platinum ceiling to become billionaires. Is the cause to be found in women themselves or in the larger commercial culture?

Some behavioral economists and wealth experts say women are generally (and perhaps biologically) more risk-averse than men. Since becoming a billionaire almost always involves starting a company, and since starting a company often involves taking huge risks, women's alleged risk-aversion may be one factor, they say.

Of course, this risk-aversion in women has, in some studies, proven to be an asset when it comes to investing and trading. A study of brokerage clients in 2001 found that women's risk-adjusted returns beat men by one percent a year.

This caution may not serve women as well when it comes to betting the family farm on a crazy idea or invention built in the garage.

The reason may also be cultural. Maria-Elena Lagomasino has been working the ultra-wealthy for decades, first as head of JP Morgan Private Bank and now as CEO of Genspring Family Offices, the wealth management firm.

She says that creating billionaire-level wealth requires "absolute focus" on a business or idea for many years. Women, she says, also have to consider decisions about building a family. "The people at that level have to live, breathe and sleep their business," she said. "That's difficult when you're also building a family in the early years."

She adds, however, that women may have a tougher time finding capital or investment in their companies or ideas since the financial world is still predominately male.

"I don't think women have the same network in the financial world that men do," she said. "People have to know you trust you and understand you to give you capital. And women don't have that network yet where they can invest in eachother and support eachother. It's getting better. But it's still a work in progress."

Why do you think there are so few women billionaires?


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