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Women’S Approach To Money
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Women’S Approach To Money

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Women and Money

Women and Money


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  • 1. Peggy Kessinger, Financial Advisor Women’s Approach to Money: Getting to the Heart of the Matter [email_address]
  • 2. History of Women & Money
    • Traditional split
      • Men bring home the bacon
      • Women take care of home and family
    • Industrial Revolution/WW II Era
      • Women needed in the workplace
      • Take roles in non-traditional fields
    • Feminist Movement
      • Women demand equal pay, status in workplace
  • 3. Women’s Relationship with Money TODAY …
    • So much has CHANGED, yet much remains the SAME …
      • Girls are doing better in MATH in school than boys
      • Women make up LARGE percentage of workforce
      • Women have proven themselves competent across the market
      • YET,
      • The Glass Ceiling is Penetrated by FEW WOMEN
      • Pay Scales for Women Continue to LAG
      • Surveys indicate that WOMEN still largely take care of HOME & FAMILY
  • 4. Special thanks to Jane Field for preparing this graph http://lehd.did.census.gov/led/datatools/qwiapp.html  
  • 5. Special thanks to Jane Field for preparing this graph http://lehd.did.census.gov/led/datatools/qwiapp.html  
  • 6. Nature – Female Brain Wiring
    • Differences in mathematical capacity in early teen years between boys and girl’s brains are virtually nonexistent.
    • But, at puberty when estrogen feeds the female brain, females start to focus intensely on their emotions and communication.
    • As testosterone takes over the male brain, boys become obsessed about scoring – in games and otherwise.
    • Women value things that build living relationships while men gravitate toward mastering the non-human world.
  • 7. The Female’s Unique Aptitudes
    • Outstanding Verbal Agility
    • Ability to Connect Deeply in Friendships
    • Near Psychic Ability to Read Faces & Tone of Voice for Emotions & States of Mind
    • Ability to Defuse Conflict
    • “ ALL of THIS is HARDWIRED into the BRAINS of WOMEN.”
    • The Femail Brain, by Louann Brizendine, MD
  • 8. Show me the MONEY …
    • When it comes to money, investing and personal financial responsibility in families:
    • Women tend to manage the Day to Day Household Cash Flow
    • Men tend more to the “Big Picture” of Investing
    • Suze Orman even found:
    • Successful Career Women tend to shy away from Managing their Money
    • Sometimes to the point of complete AVOIDANCE
    “ 60% of Women say they prefer to spend as little time as possible managing their investments.”
  • 9. Life Stage Roles & Priorities Life Stage Priority Money Concerns Teen Friends Spending Money Young Adult Relationships, Career Wage Earnings Mommy Children, Family Day to Day Cash Flow Mature Adult Family, Legacy Bag Lady Fears Retiree Family, Friends Cash Flow Longevity
  • 10. Fear-Based Resistance
    • What you Don’t KNOW is FEARFUL
    • Where is the payoff for Women in Engaging with Money Management?
    • Women engage in RELATIONSHIPS, they enjoy talking about emotions and connections – Investments have LOTS of JARGON and DETAILS with DOWNSIDE RISK …
      • CONFLICT!!!!
  • 11. Psychology of Money w/Spouses
    • 84% of Husbands and Wives admit MONEY is a source of TENSION in their marriage.
    • Men Like to TALK about Money, Women Not so MUCH.
    • Who’s in Charge?
    Source: Money Magazine, April 2006 MEN WOMEN Investment Decisions 73% 22% Retirement Planning 66% 25% Buying Insurance 60% 34% Paying Bills 42% 57% Budgeting 33% 59% Day to day Spending 22% 64%
  • 12. Getting to the Heart of the Matter
    • Women have the Capability, but the Incentive is MURKY
    • TIME for INSPIRATION:
    • Best Care for Family is Care for Self … including Personal Financial Health - Control YOUR own Destiny!!
    • Children Learn from Parent’s Role Modeling – Teaching Children Fiscal Responsibility SHORT & LONG Term starts at HOME
    • Money begets Money … Well, Money Management is a LEARNED Skill that CAN BE PASSED ON!!
  • 13. Making the Transition
    • Must FACE the FEAR of the UNKOWN
    • Have Confidence in Step by Step Approaches
      • Suze Orman’s Women & Money Has “Save Yourself Plan” in 5 months
    • Include Others, Join an Investment Club like AAII
    • Ask for HELP, find an Investment Advisor that Suits your NEEDS
  • 14. Money Management 101
    • Pay Yourself FIRST, Spending LESS than Paycheck is a LEARNED Behavior – it takes PRACTICE. Open Savings Account & Save
      • 6-9 months worth of Monthly Cash Flow Requirements in Emergency Fund
    • Get OUT of Debt
      • Pay off Credit Card Debt – only hold 1 Credit Card, Cut up the REST.
    • Save for Children’s Education – the sooner, the better
    • Retirement Investing
      • Participate in employer’s retirement plan.
      • Contribute to MAXIMUM level of Employer Match.
      • ROTH IRA’s are an unbeatable retirement account
    • Estate Planning - MUST HAVE Documents!
    • Insurance – Protect your Family & your Home
  • 15. Women’s Investment Strengths
    • “ When it comes to investing, to err is human, but women are less likely than men to do so.”
    • According to Merrill Lynch survey, women make fewer investment mistakes than men and make them less often.
    • Women are far less likely than men to hold a losing investment too long or wait too long to sell a winning investment.
    • Women are less likely to make the repeat the same investment mistake twice.
    • Women turn to pros. A woman’s planning oriented-approach and propensity to seek professional advice contribute to her long term success.
    Source: “The Gender Gap: Men and Women make Investment Decisions Differently”, Fairfield County Business Journal, May 30, 2005
  • 16. Women’s Natural Process
    • Women tend to think more Holistically
      • Women rely on their instincts and can integrate a wide range of variables.
    • Women are more experiential
      • Thought processes are spiral relying on both left and right brain, rather than linear
    • Women are inclusive
    • Women’s reality is dictated by communication, connection,
    • emotional sensitivity and responsiveness
      • Downside is that may trust someone who talks and looks good, but is not acting in best interest.
      • Make sure to understand the basics and to ask questions
  • 17. Investment Resources
    • The Four Pillars of Investing:Lessons for Building a Winning Portfolio , by William Bernstein
    • A Random Walk down Wall Street: The Time Tested Strategy for Investing , by Burton Malkeil
    • The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns (Little Book, Big Profits , by John Bogle
    • www.fool.com - The Motley Fool site
    • www.retireearly.org – Search engine for retirement info
    • http://finance/yahoo.com - Yahoo’s Finance Button
  • 18. Women and Financial Advisors
    • Women want to be Recognized for their Individuality
      • Women are not one big homogenous group
      • Each woman has different needs, wants and fears
    • Women want Choices and Options
      • Beware of the “Safety”, “Guarantee” and “Protection” slick marketing pitches
    • Women want Advisors who are Honest and Forthright
    • Women want to understand the Investment Strategies
    • Women are in it for the Long Term
    • Women have Unique Situations
      • Hidden attitudes about money, living single, managing a blended family, etc.
      • Understand the obstacles facing the women to help solve those issues
    Source: “6+Insights for Working with Women Clients”, by Jeri Sedlar and Rick Miners, http:/www.hoursesmouth.com/80954, Feb. 6, 2008
  • 19. Avoiding the Bag Lady Syndrome
    • Start Retirement Saving NOW – the EARLIER THE BETTER
    • Enemy number one: Inflation
      • Inflation erodes a portfolio’s ability to protect a standard of living
      • Must invest in assets such as stocks and bonds that historically exceed rate of inflation
    • Find YOUR Sleep Number
      • How much short term fluctuation in investment return can you handle without losing sleep at night?
    • DIVERSIFICATION is your Friend
      • Avoid the Enron fiasco of having all your eggs in ONE basket
    • How Much Do I NEED?
      • Need a predictable cash flow, focus on withdrawal rate as a percentage of overall portfolio
      • Typically, if your withdrawal rate is 4-5% of overall portfolio, your retirement
        • savings is sustainable.
  • 20. Bottom Line
    • Women are BUSY
    • MONEY can mean CONFLICT & FEAR
    • Avoidance can seem Prudent, until it Doesn’t
    • TIME to Own our Destiny & Be Role Models
    • Redefine our Relationship with Money utilizing our Natural Take a Holistic, Long-Term Approach to Saving & Investing
    • YOU & YOUR FAMILY WINS