Women and Money

woman-and-calculatorWe hear so much about a ‘gender gap’ in incomes between women and men. Patricia Arquette received a standing ovation during her Academy Award acceptance speech for her rallying cry for wage equality. But when it comes to women and money, it seems what we really have here is a ‘confidence gap.’ We are all perhaps influenced by the many stereotypes about a female’s approach to money. Women are sometimes characterized conversely as bargain-shoppers or shopping addicts. Maybe this comes from the idea that men are the hunters and women the gatherers, a “Men are from Mars and Women Are from Venus” explanation for different behaviors by the sexes in regards to personal finance. In a Real Simple article by Geraldine Sealey, one quoted survey found that “90% of women identify themselves as the chief bill-payer and shopper for the household”, yet 60% think their investing and financial planning skills are below average. This might be where we need to boost equality!

Many women are identified as anxious and conservative about investing and more concerned with frugality and saving. In a DailyWorth.com survey, 83% of men are interested in investing while 79 % of women are more interested in saving. Consumer spending is arguably driven by the chief household purchaser. So, in that context, a woman is highly influential in budgeting for the real costs of the goods and services needed for her family – she may be the gatherer, researching purchase decisions carefully and bargain-hunting. Women are the caretakers, generally, and achieving their financial goals may be tailored to consider the needs of others – like children or parents. The other side of that coin is the aggressive and confident hunter. Men tend to be more interested in achieving goals through investing or entrepreneurship, and so focus on macro goals of higher salaries, retirement planning and investment portfolio growth. Again, these are perhaps outdated stereotypes and certainly many women are savvy investors and confident entrepreneurs and many men are care-takers and thorough purchasers. However, as financial planners, we do see some of these issues played out with our clients. Men tend to be more confident that they understand the issues of different investment vehicles, stocks and bonds and retirement planning. Women are sometimes intimidated by Wall Street jargon and tend to be overly risk-averse and cautious with investing.

Women face some unique challenges as well. 80% of American women will find themselves as the sole keepers of their personal financial situation at some point in their lives. However, most women feel that they are financially insecure, in spite of the fact that they have more education, control more wealth, and are more involved in making financial decisions than ever before. Women’s careers are often interrupted by family needs, both for childcare and eldercare. This can limit their potential for income growth and prevent them from saving adequately for retirement. In fact, many women who leave the family finances up to their husbands may become widows who are in need of financial guidance and someone who they can trust to advise them. For these reasons, it is important for women to take charge of their own financial future.

So how do we close this gap and give women the same confidence in their personal financial situations as men? One very important way is education. At DWM, one of our most critical tasks when working with clients is to help them understand all aspects of their financial plan. Our weekly educational blog last week focused on financial literacy for our kids. Education on successful financial management is a good goal for all of us, adults and kids! There are many great resources to help with this such as seminars, books, and many internet sites. One example is the Women’s Institute for a Secure Retirement (WISER) that specifically addresses women’s issues. We also recommend the National Association of Personal Financial Advisors (NAPFA), to which we belong. NAPFA offers many informative webinars on their website on all financial basics, like Money 101, Investments: The Basics and Women and Money. Let’s close the gap!

Continuing Education: My Time at Schwab Impact

BernankeLearning is so very important. Just because one has undergone extensive training through classroom work, hands-on experience, or has obtained a prestigious designation like the Certified Financial Planner practitioner or the Chartered Financial Analyst charterholder, doesn’t mean the education stops there. At DWM, we actively participate in ongoing education to keep us up-to-date with the latest and greatest in an industry that is constantly evolving and changing by the second.

In this blog, I’ll provide a little insight about what I think is the “mack daddy” educational event in our industry: Schwab’s annual IMPACT convention, held this year in beautiful Denver, Colorado. For a Registered Investment Advisor Representative like me, I think it’s the best convention available in terms of blending thought-provoking speakers, networking opportunities, and collaborative learning that can be customized to an advisor’s personal taste.

For example, the educational sessions that I chose included ones such as health care reform, social marketing, and investor behavior. I also attended many investment-oriented sessions including, but not limited to, emerging markets, liquid alternatives, fixed income, and smart beta. It was also great fun to hear different ideas and research some of the newest products from over 300 exhibitors in the 500,000+ square foot Exhibit Hall. One can also see CNBC broadcasting within the Hall, where, as they say, “the heartbeat of the industry beats”, represented by the networking of around 2000 of the country’s finest advisors (including yours truly).

There are always a number of good speakers at this event. Charles Best, who leads DonorsChoose.org, a nonprofit organization that provides a simple way to address education inequity, spoke of how the same technology behind “crowdfunding” can help students in schools with needs. Dr. Dambisa Moyo, economist and author, gave us macroeconomic views on global affairs and where this world may be heading if we don’t take action now. But the most thrilling presenters were this year’s keynotes: Dr. Ben Bernanke, our former Fed Chairman and President George W. Bush. Bernanke talked about the crazy times during the Great Recession and how he and his team led us out of the turmoil and brought this country back on its feet. George W. talked about his new passion and talent for painting and how anyone can reinvent themselves however old or young they are. He also had everyone rolling when he told us the story about how Putin made it a point to show him how Putin’s dog was bigger, stronger, and better than Bush’s dog, Barney.

These events are great in that we get to hear past and future leaders and gather our own ideas which ultimately make us better leaders. We leave an event like this with new ideas, strategies, and knowledge to propel us individually forward, our firms forward, and our clients forward.

Brett at BroncosMy four day agenda was jam-packed. The days were long amongst all the sessions and networking, but there were still a little time for fun which for me included a stop at fabulous Mile High Stadium and culminated with the final night event featuring the band Train (“Hey Soul Sister”).

In an effort to continue to learn and gain knowledge, Les and I attend many educational events and workshops like this throughout the year. They equip us to be stronger advocates for our clients and for our industry. Never stop learning. Knowledge is power!