Hey Finance Warrior!
Did you know that by 2030, women will manage $2 out of every $3 of investable assets?
That is FINANCIAL POWER.
The question is: Are we, as women, READY?
Ken Fisher, the CEO of $100 billion Fisher Investments, made offensive comments about women during a financial services conference last week.
His behavior shows us how the financial services industry MAY NOT BE READY for us either.
The Boston Globe Magazine is publishing a Women & Power Issue in early November. I shared my views with the Boston Globe journalist on key trends I see with Women & Investing.
Here is a sneak preview of my comments.
1. Why is Investing Different for Women?
On my website, I have three key points about why women have unique needs as investors.
- Women live eight years longer than men and need their money to last longer.
- Women earn $0.80 on the dollar with the gender pay gap. It is worse for women of color and minority groups. As women, we need to invest to make up for this difference.
- Women often take time off to take care of children and elderly parents. These decisions, often left to women, may have a significant impact on their earnings trajectory and how much they invest over the course of their lifetime.
These are three reasons why it is critical for women to learn to invest and make their money work for them, using the power of compounding with investing in financial markets.
2. Is there a Gender Investing Gap?
Absolutely. We as women only have 1-2 generations of working women as examples of managing our very own dollars.
During World War II, women worked to support the war effort. During the 1950s, however, women were encouraged to return to their celebrated role as homemakers.
Many women are the first generation in their families to earn money. Today, there is also the opportunity and a need to invest for retirement.
I like to use the example of my mother Maryann who was a working mother and a BUDGET QUEEN.
She knew the value of a dollar and how to stretch a household budget to support four children. Since she had a pension, she didn't need to learn how to invest. Her pension would serve as her retirement.
Today, most people under the age of 50 are responsible for their own retirement. Your retirement is your responsibility.
Unfortunately, though, we don't receive personal finance training in high school or college. How will we learn how to invest our hard-earned dollars?
This is the reason I stepped forward to create online personal finance courses.
I chose to focus on women, as women often do not talk about money and we only have 1-2 generations of working women. I wanted to provide an independent source of education on financial markets and investing.
In my years of doing this work, I've seen that when women learn the basics of personal finance, they feel more confident investing and making important financial decisions.
3. What is the key problem facing women with Investing?
Based on my audience and experiences with thousands of women, I have found that fear is the key problem. Let’s break down fear into layers.
- The first layer is fear of the unknown. Women may not know how financial markets work or what investments they need.
- The second layer is the fear of losing money and making a mistake. Women may see financial markets like gambling since markets go up and down. Sometimes, they don't understand how financial markets work. Women may fear that if they lose money on an investment, they are irresponsible, or bad investors, and will at some point lose all of their hard-earned money.
- The third layer is the fear of taking responsibility for their money. Many women simply do not want the responsibility of managing their money. They are not ready. Through generations, we have seen and internalized men in our family taking control of the money, whether it be a father, uncle, brother or spouse.
It is now time for women to take control of our finances, of our investments, to become money managers in our home.
Thanks to the graduates of my online courses and my audience of women from whom I have learned the various type of behaviors around money.
4. Do we need a separate financial services company dedicated to women?
Yes. Though I would like to say we do not, this generation of women – age 30-50 – does have unique needs. Historically, the financial services industry has ignored women. I have worked in the industry for more than 20 years. On the retail side, we have some bright stars like Fidelity and Capital Group (parent of American Funds) who show women in their advertising and highlight women's unique needs in their marketing. That's at least a start!
Overall, however, the industry has ignored women. This includes the use of jargon, limited resources dedicated to women's unique needs and limited marketing to a female audience.
In my conversations with dozens of companies over the last six months, I do not YET see many firms embracing the trend that women will manage 2/3 of investable assets by 2030.
Let’s see what happens over the next five years. I want to be part of that change.
5. What is your favorite book about money?
It sounds like it may be time to write one based on my experience working with women primarily between the age of 30-50 and running Personal Finance Warrior.
Thank you to my audience for sharing your valuable experiences with me. I'm going to need your help to write this book!
Ladies – We are just a few short months away from 2020!
NOW is the time to get organized with your money so you can step into your FINANCIAL POWER as the new year approaches.
I'd love to hear from you! Please reach out to me with any questions or comments.
P.S. Are you a member of my vibrant community, Wealthy Warrior Women? I share valuable articles and resources to help you on your financial journey. Click here to join.