Women and Wealth Part 1
Unsplash- Jaclyn Moy
Ladies, have you ever looked at your significant other and thought, “what even goes on in there?” Men, I’m sure you’ve done the same a time or two. And men and women don’t just think differently, we approach the world differently. I know current culture wants us to believe that gender stereotypes put people in a box and it’s really all fluid and blah blah blah, but I’ve watched the little girl down the street sit with a pile of books for twenty minutes while my sons rip through the backyard chasing balls, dogs, bugs, whatever it may be. We’re different. As a young woman working in a male dominated industry, I see every day just how different we are. Times are certainly changing and we are starting to see more women take a leading role in their families’ finances, but in my experience, while a lot of my clients are couples, the majority of the time it’s the husband who makes the decisions. Now, there’s nothing wrong with that. I know full well that I am in the minority when it comes to women’s overall interest in finance. And to a lot of men’s credit, I hear on a very regular basis things like “I just never want to worry her with things like this.” It really is sweet and well intentioned. Unfortunately, here are the facts. 80% of women will be single at the time of their death. The average age a wife becomes a widow is 59 (Protective Life). In 2017 there were 13.6 million widows in the United States with over 700,000 added each year (2017, Willison, creators.com). Widows outpace widowers 4 to 1 and women are far less likely to remarry after losing a spouse (Protective Life). So where does that leave us? With a lot of newly single women forced to make financial decisions for the first time in their lives.
I’m going to go out on a limb and suggest one of the reasons so few women take interest in finance is because of the way we’ve always talked about it. There are hundreds and hundreds of books about finance. Do you know what analogies are used in nearly every one of them? Sports, building houses, the parts of a car, tools in a toolbelt, climbing mountains, you get the point. Not that women aren’t ever interested in those things, but we tend to always talk about money in terms that men are very comfortable with. My Women & Wealth series is going to change all that. We are going to talk about important financial topics in terms that women both understand AND find interesting!
Today, let’s talk about one of the most basic but arguably one of the most important pieces of investing: knowing what you own and why. If you have a retirement plan or other nonqualified investment account, you likely have a collection of different investments inside. This is called diversification. Each investment inside your portfolio should serve a specific purpose and it’s important that you know what that purpose is. Think about it in terms of your closet. You likely have a pair of tennis shoes for being active. There are probably a couple pairs of sandals for warm days and dress shoes for going out, boots for the cold and snow and likely a few other pairs for work or special occasions. If all you owned were winter boots, come July you’d be pretty uncomfortable. It’s the same way with your investments. There are many many different investment vehicles and each serves a different purpose inside a portfolio. It doesn’t mean you’ll own one of everything. You are very unlikely to ever catch me hiking in the mountains, so I don’t own hiking boots. But given that each asset class performs a little differently depending on where we are in the market and economic cycles, it’s valuable to have your money spread out amongst a series of different investments.
My absolute favorite client appointment is our recommendation appointment. With new clients this tends to be appointment three or four in our onboarding process and with current clients it’s an ongoing conversation we have with them. By this time, we are done gathering information from the client. We’ve used it all to help paint a very detailed picture of our client’s goals and dreams. And now we are at what most people would consider the “sales” appointment. This is the appointment where we pitch them with the investments we would recommend for their portfolio. The reason this is my favorite part is because I get to watch their faces light up as I use the detailed picture that we already painted to explain why we are recommending the portfolio that we are. Seeing the whole plan come together and seeing them understand why we are making our recommendations is SO MUCH FUN! Sorry, the nerd in me is coming out; I get goose bumps just typing it. It is watching someone become empowered right in front of your eyes. Now, we don’t bog people down with every single number and detail related to their investments, that’s a very quick way to lose people. Our goal is to give our clients enough information to understand and defend what they own AND to formulate their own questions. Being able to explain to a client that X-investment is designed to generate income when their paychecks stop and Y-investment is put in the portfolio as a growth play for wealth accumulation and Z-investment is a there purely as a hedge against the stock market or for capital preservation gives them comfort and power in making their decisions.
So, let’s say your reading this and thinking to yourself, that’s me! I don’t know why I own what I own; heck I don’t even know what I own. Call you financial advisor! They are there to help and if they are like the majority of us, they want to help you understand. Financial advisors tend to be natural educators, it’s part of what draws us to this industry. If you don’t have an accessible financial advisor or aren’t comfortable talking to them for one reason or another, I can help you. I offer consulting services for this exact situation. There are a lot of people that I advise and assist but never actually manage assets for because they are tied up in a current company retirement plan. I’m sure there are other advisors that do the same.
I am so excited about this series and I hope you are too. If you’re not a woman, don’t think this isn’t at all for you. We all have women in our lives that we love. Pass this on. I want to help women feel empowered when it comes to their finances. This doesn’t mean the tables turn and now every woman is forced to make all the money decisions on her own; that is definitely not my goal. My goal is for women to want and have the ability to be part of the financial conversation. I want her to be part of the team so if she one day has to be the coach, she knows what she’s doing. Dang sports analogies!
If you have questions or topics you’d like me to cover, please let me know! I want this to be as helpful as possible, so feedback is always appreciated. Email me at molly.vanbinsbergen@raymondjames.com
Any opinions are those of Molly VanBinsbergen and not necessarily those of RJFS or Raymond James. The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the forgoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making investment decisions and does not constitute a recommendation.
