Women & Investing

How can women take greater control of their financial destiny? At some point, according to A Woman’s Guide to Financial Planning (2011), 90% of women will have sole responsibility for their finances. Where men once dominated financial affairs, the growing presence of women in the workplace and as heads of household is introducing a paradigm shift. Women are rapidly becoming a force to be reckoned with as they take increasing responsibility for their long term goals and financial help.

Women investors face special challenges that make financial literacy and advance planning especially important. Women are more likely to outlive their husbands or be disproportionately affected by a divorce, making long term financial strategies especially difficult. According to a recent report from H.S.B.C., 65% of men make all or most of the household financial decisions without input from wives or other family members; 4 in 10 men claim sole decision-making responsibility in retirement planning compared to 25% of women.

Lack of involvement in financial affairs can put women in a highly vulnerable position should anything happen to their husbands. My tip today is get involved in your financial planning. Husbands and wives need to work together on decisions. Usually, one spouse is going to be more adept at a certain skill set than the other, whether that’s the male or the female, but both should be involved. If you’re someone that is a free spirit and you really just don’t like this “stuff”, you still need to understand where things are located. You should have an inventory or a checklist, of where things are. You should know how all this stuff fits together because as I said earlier, 90% of all women are expected to at some point have sole responsibility of finances in their lives.

Research suggests that women are more reluctant to accept risk in their investment portfolios. Risk is an important issue. More conservative investment behavior among women may stem from a lower confidence about investment knowledge. In a 2011 survey of high net worth investors, 70% of men feel confident in their basic understanding of the stock market; only 45% of women. Getting confidence can help with appetite for risk, but there’s certainly nothing wrong with taking a conservative approach to investing. We are very conservative in many ways when it comes to managing our clients’ monies in retirement, but being overly conservative can inhibit the ability of your portfolio to keep pace with inflation while meeting your income needs. Finding the right balance of risk and reward is an important factor for successful investing.

How can you be more informed and educated on financial matters? A good way to start would be for spouses to involve each other in financial decisions. It’s important that we are working together on these issues. Another great way to start is to attend one of my classes at the University of Tennessee or Pellissippi State. I also have a special report that I have published on Women & Investing.

On the right hand column of this blog you can click on the Women & Investing logo and sign up for your free copy of this report. It is a free 8 page report that I’m happy to provide to you that I’ve written about this topic, the problem, and what you can do to take control of your financial destiny.