Boomer Couple in Front of Their Beach House

Women and Financial Power

Too many women lack the confidence necessary to take control of their financial lives. Women fear making investments, managing their finances, planning and monitoring their spending, managing investments, and increasing their wealth.

Why aren’t women more confident with their finances?

The answer is that women are stopping themselves from being assertive. Many women leave their financial lives to their husbands, boyfriends or parents, and because of this way of thinking, they lack financial power. Financial empowerment must come from within. Women must seize it with fervor, reflecting an unshakable determination to take control of their financial lives. You must tell yourself that you can become empowered, and that you will not let outdated notions of gender hinder your success. Keep “EMPOWER” in your mind as an acronym representing these concepts:

Education is critical
Motivation inspired by your values
Protection against risk
Ownership of your future
Work — claiming what is yours requires effort
Emotions should be kept out of decisions
Responsibility to yourself

Do you use any acronyms to motivate you with your finances? I’d love to learn about yours! Please let us know what you think by posting your comments on our Financially Savvy Women Fanpage.

Gibbons, EmpowHer! Why more women are taking the financial lead

Financially Savvy Women have the wealth they deserve

5 Myths about Women and Wealth

There are several myths about women and wealth that you might not be aware of. Below are the top five myths about women and money:

  1. Women are not good at math: Nature, not nurture, accounts for the gap in math skills. However, there is a growing movement to expose more women to learning and mentoring opportunities in the fields of math, engineering, finance, and science.
  2. Women are impulsive spenders: Money is an equal-opportunity, all purpose mood changer. Just as many men impulsively spend and overshop as women. One major difference is how society labels it. Women overshop; men collect, a term that gives the activity an intellectual cast. However the underlying impulse behavior is the same.
  3. Women are too emotional to invest wisely: Female investors outperform men in the long run. Men try to compete with the market and chase returns, leading to more frequent trading and high transaction costs. Women take a long time to make an initial investment decision; they are committed to the decision in the long run. Women are less reactive to short term changes in the market, trade less frequently than men, and realize better long-term investment performance as a result.
  4. Women would rather let men manage the family finances: Women are the chief financial officers of their households in 66 out of 100 homes (2010 Women and Affluence Study by Women & Co.). Women in the ultra high net worth market reported they play a high to moderate role in the management of the family’s assets. When it comes to retirement, 90 percent of women participate in decisions that affect their household’s retirement and investment accounts.
  5. Women are not interested in wealth management: The gender gap in finance is diminishing as women enter the field. Advising clients lends itself to a woman’s strengths in relationship building and communication, allowing female advisors to have the opportunity to outperform men. Organizations like Directions for Women and The Female Affect offer forums and networking opportunities to facilitate the advancement of women in financial services.

Kingsbury, How to Give Financial Advice to Women

Understanding these myths will help you overcome and fears that you may have had when it comes to managing your finances. Do you know of any other myths about women and their wealth? Please let us know what you think by posting your comments on our Financially Savvy Women Fanpage.

 

Getting Paid What You Deserve

Financially Savvy Women get the money they deserve
Financially Savvy Women make sure they know what they are worth, and get it!

Do you think that you deserve more money than you are earning? Here are 5 tips for developing your self-worth which in turn develops your net worth:

 

  1. Think Big, Then Think Even Bigger: The idea is to think in terms of what you are worth, not just what you assume the market will bear.
  2. Do Your Homework: One of the worst negotiating mistakes women make is picking a number out of the air that’s way too low.
  3. Take the Initiative: Have tangible evidence of what you bring to the table. Every time you accept more responsibility, successfully complete a challenge or create positive changes, document it.
  4. Daily Affirmations: Affirmations are positive statements expressed as if they’ve already happened. When you act as if you’re worth a lot, you’ll eventually convince yourself as well as others.
  5. Challenge yourself in other areas: A stretch in any area of life has a ripple effect in other areas as well. Anything that puts you out of your comfort zone builds confidence and self-worth.

 

By implementing these tips, you’ll begin to notice a shift in how you feel about yourself. Making more money is not something that you should do, but it is something you have to do, because you know you are worth it.

 

(Barbara Stanny, 5 Tips for Getting Paid What You Really Deserve)

Woman facing Divorce

Facing Divorce

 

The independence that comes with divorce can be overwhelming, especially when dealing with your finances. You are in a strong position if you are familiar with all aspects of your family’s finances and have played a strong role in the financial decision making. If you are not familiar with your finances, this is the time to be prepared. Be involved as a partner, not a supporter, when discussing your finances. Take the lead! The advice of a financial professional can also be helpful.

(Morris, A Woman’s Guide to Personal Finance)

Investing Tips and Explanations Continued, Again

Investing and Asset Allocation

Below are tips 7-10 of the investing tips and explanations series.

7. Inflation may be the biggest threat to your long-term investments.

While a stock market crash can knock the stuffing out of your stock investments, so far — knock wood — the market has always bounced back and eventually gone on to new heights.

8. U.S. Treasury bonds are as close to a sure thing as an investor can get.

The interest rate of Treasury’s is considered a risk-free rate, and the yield of every other kind of fixed-income investment is higher in proportion to how much riskier that investment is perceived to be.

9. A diversified portfolio is less risky than a portfolio that is concentrated in one or a few investments.

Diversifying lessens your risk because even if some of your holdings go down, others may go up. However, a diversified portfolio is unlikely to outperform the market by a big margin.

10. Index mutual funds often outperform actively managed funds.

In an index fund, the manager sets up his portfolio to mirror a market index, rather than actively picking which stocks to purchase. Index funds often beat the majority of competitors among actively managed funds.

(CNN Money, Investing Your Money Basics)

Investing Tips and Explanations Continued

Here are the explanations for investing tips 4 – 6.

women investing their money
Women investing their money in a bull market

4. The biggest single determiner of stock prices is earnings.

Over the short term, stock prices waver based on everything from interest rates to investor sentiment. But over the long term, earnings are what matters.

5. A bad year for bonds looks like a day at the beach for stocks.

In 1994, intermediate-term Treasury securities fell just 1.8%, and the following year they bounced back 14.4%. By comparison, in the 1973-74 crash, the Dow Jones industrial average fell 44%. It didn’t return to its old highs for more than three years or push significantly above the old highs for more than 10 years.

6. Rising interest rates are bad for bonds.

When interest rates go up, bond prices fall. Fixed interest on a new bond will pay more because rates in general go up.

(CNN Money, Investing Your Money Basics)

Investing Tips

Woman reading stock quotes from WSJ.
Women have a great ability for Financial planning, some just need more encouragement than others.

Are you new to investing? Here are ten tips that will help you make smarter choices in your finances.

 

1. Over the long-term, stocks have historically outperformed all other investments.

2. Over the short-term, stocks can be hazardous to your financial health.

3. Risky investments generally pay more than safe ones (except when they fail).

4. The biggest single determiner of stock prices is earnings.

5. Rising interest rates are bad for bonds.

6. Inflation may be the biggest threat to your long-term investments.

7. U.S. Treasury bonds are as close to a sure thing as an investor can get.

8. A diversified portfolio is less risky than a portfolio that is concentrated in one or a few investments.

10. Index mutual funds often outperform actively managed funds.

 

(CNN Money, Investing Your Money Basics)

Investing Tips and Explanations

women investing and planing
Investing research

Had trouble with any definitions from the list of investing tips? Here are some explanations!

1. Over the long term, stocks have historically outperformed all other investments.

Stocks have always provided the highest returns of any asset class, close to 10% over the long term. The next best performing asset class is bonds.

2. Over the short term, stocks can be hazardous to your financial health.

On Dec. 12, 1914, stocks experienced the worst one-day drop in stock market history — 24.4% . Oct. 19, 1987, the stock market lost 22.6%. More recently, the shocks have been prolonged and painful: If you had invested in a Nasdaq index fund around the time of the market’s peak in March 2000 you would have lost three-fourths of your money over the next three years. And in 2009, stocks overall lost a whopping 37%.

3. Risky investments generally pay more than safe ones (except when they fail).

Investors demand a higher rate of return for taking greater risks. The longer investors have to wait for their final payoff on the bond, the greater the chance that something will intervene to erode the investment’s value.

(CNN Money, Investing Your Money Basics)

Retired Women Enjoying Her Garden

The Secret to Becoming a Smart & Savvy Woman

Here are 5 Important steps in becoming a Smart & Savvy Woman:

  1. Define your purpose — Work with an Advisor who can help you define your purpose and what you truly want your money to do for you.
  2. Trust your intuition — Trust your intuition. It worked for you in the past, so trust it. If the chemistry is not there, keep searching.
  3. Rely on your strengths — Rely on your strengths as a woman when selecting your Advisor and making financial decisions.
  4. Have a process — Work with an Advisor who has a process that works for you as a woman.
  5. Don’t settle for less — Don’t settle for less than you deserve.

Remember, your money is a tool to live by and use to create a purposeful life that gives you tremendous satisfaction and adds value to the world.