The Well-Kept Secret of Women’s Wealth
– by Charlotte Geletka, CFP, CRPC
“Whoever said money cannot buy happiness does not know where to go shopping.”
– Coco Chanel
I have been a practicing financial advisor for 15 years and I regularly hear women say, “I don’t do investments.” I am talking about smart, educated, change-the-world type of women.
But here is the BIG secret nobody talks about. Women do it better. True story.
According to a recent Fidelity study1, when women do get into the stock market, they consistently earn higher returns than men. Fidelity’s study revealed that women save 0.4% more and earn 0.4% per year better returns than their male counterparts. In an analysis of 60,000 Openfolio app users in recent years, women earned as much 1.3% year more in down markets than men.
Women seem surprised to learn this, so where is the disconnect? I suspect it is a confidence issue. Financial confidence, that is. There is a disconnect because women think that they need to reach expert level before they can excel at wealth management. Investing will humble even the most qualified of experts. But the issue of confidence seems to be unique to females. A Wells Fargo study3 recently reported that Women are significantly less likely to rate themselves as knowledgeable investors. Investing is only one part of successful money management, but it seems to dominate a woman’s financial confidence.
The good news is that you can increase your financial confidence. For starters, flip the script and change your mindset. Meditation gurus propose phases to repeat to yourself in order to find your inner calm. Before you begin to tackle a financial task or talk to your advisor, repeat to yourself, “I am good at money, I am good at money, I AM good at money.” If mediation is not your thing, take a look at these facts stated above and know that there is evidence to support your financial confidence journey.
Next, face your fear. If you are deeply in debt but afraid to talk about it, get help, or even take the time to acknowledge your debt, then now is the time to face it head on. Knowledge is power and it is empowering to stop the cycle of denial. On the opposite end of the spectrum women often leave too many assets sitting idle in the bank rather than dipping into the market. Do not let stock market intimidation keep you from making money on your money.
Seek help. Financial Advisors often state education as one of their main objectives when engaging in a client relationship. They can serve in a coaching capacity and give you a roadmap to navigate your path to financial confidence. The best client/planner relationships are based on a mutual engagement with the goal of working alongside you as you steer your financial ship. There is a big difference between hiring an investment advisor and getting good financial advice.
Financial confidence is your key to moving forward. Change your money mindset, face your fear, and get good advice.
Money is not a dirty word, nor is investing an exclusive men’s-only club. Investing is a woman’s place and believing in yourself may just be the key to successfully managing your portfolio.
Charlotte is the founder and managing partner at Silver Penny Financial Planning and a Chartered Retirement Planning Counselor designee. As an experienced investment advisor representative, Charlotte acts as a financial coach, committed to helping her clients get to a point where they can stop worrying about their financial future.