Most women are not frightened easily, except when it comes to personal finance. Women put up barriers when it comes to financial matters.
Women invest much too conservatively because they do not understand investments such as stocks and mutual funds. They delay saving for retirement because they aren’t sure about how much they should contribute to their 401k plan. They don’t buy any life insurance because they don’t know what kind of life insurance to buy or how much coverage they need.
And women feel isolated in their investment journey. They feel as if they are the only ones who find investments scary. They feel they are the only ones who have a hard time managing financial matters. There are a lot of women who also feel the same way.
The feeling of isolation is financially unhealthy for women and only hurts them in the long run. Maybe if women understand why they lack the confidence they can break down their financial barriers.
Understanding Women & Investing
Poor Financial Education
- Women are not taught about finances and investments like men are.
- Women leave the workforce more often than men do in order to care for the children.
- Because of the gap in their working years, women do not learn as much about investments, retirement plans, annuities, 401k plans and IRAs.
Poor Investment Knowledge
- Unfamiliar to many women is the basic understanding of investments, stocks, bonds and mutual funds.
- Many women do not understand the concepts of dollar cost averaging, inflation, asset allocation, rebalancing a portfolio and diversification methods.
- Many women feel they cannot connect with a financial planner.
- They feel misunderstood by financial planners.
- Many women feel financial planners talk over their heads.
- The feel like planners can be condescending.
- The financial planner isn’t snubbing them on purpose, a lot of times it’s because they don’t understand what women want or need in a planner.
Women Avoid Risk
- Women are naturally more cautious.
- Women are more indecisive about investing.
- Women generally want to understand something before taking action.
- Women find investing to be scary.
- Women lack confidence when it comes to investments.
What Women Want
- To feel safe about their money.
- Feeling safe translates into “will they have enough”.
- Women do not want to feel rushed.
- They do not want to feel pushed into making a decision.
- Women want to learn about finances and investing, at a slow pace.
- Women approach financial matters more slowly than men, due to their more cautious nature.
- They want to know what the financial goal is.
- They want help in creating the goal.
- They need to be shown the process for reaching the goal.
- They need to someone to help them understand what the approach will be to reach their financial goals.
- They want the financial planner to understand their financial goals and objectives.
- Women like to work with time lines.
- Women use time lines as a score card; are they on target, are they doing it right.
What Women Need To Do
- Take charge of their investments and personal financial planning.
- Don’t be afraid of investing; it’s not scary.
- Knowledge is king.
- If you aren’t sure how to pick an investment, take an investment class.
- Seek advice.
- If you are worried about finding a financial planner, shop around and interview a few.
- Find a financial planner that you trust; ask your friends who they use.
- Do not invest so conservatively due to being intimidated by investments and the market in general.
- Be proactive about financial matters.
- Do not wait to approach financial matters after the death of a spouse or a divorce or some other financial emergency.
Your financial health is up to you. You need to take charge of your investments and personal finances, no one cares about that more than you do.
You may not know too much about financial matters right now, and that’s okay. It is never too late to learn about investing. It is never to late to open a retirement account or an annuity; you just have to know who to go to if you need help.
Start asking questions. Start asking your friends and others within your personal network who they use as a financial adviser or life insurance agent. Then take the time to interview that financial professional before doing business with them.