3 Things ‘Not-So-Smart’ Women Do With Their Money

Barbara Stewart on how to stop being clueless about money.

Living

Barbara Stewart
November 1, 2013

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  • Last month I had the honour of speaking to 500 women at the Helsinki stock exchange. It was an historic event because in 101 years they have never had so many women inside the building. It was exhilarating to share my research on how accomplished women are investing and spending their resources in 2013. After my presentation I did an on-stage interview with a journalist from the largest business newspaper in Finland.  She observed that I write about ‘smart’ women and report on their collective wisdom. But she was curious as to what ‘not-so-smart’ women do with their money? 1:  ‘Not-so-smart’ women say they should learn more about investing. But they do nothing about it. Why not own up to the fact that you are either not interested or you just don’t want to put in the time to learn? Lose the self-deprecating talk. From there - take a step forward, feel good about making your decision, and either start investing or hire a professional advisor that you can trust. 2:   ‘Not-so-smart’ women defer their authority to others. And they think everyone else (brother, friend, taxi driver) knows more than they do about money. These people you meet that brag about how great their stocks are doing? Ask to see their audited five year returns…most won’t even know what that means, and are only focusing on their winning picks, conveniently ignoring the ones that didn’t work out. Know that you are just as capable (or more so!) of deciding where to put your own money if you sit down and think about it. 3:   They act like a cliché. If you refuse to take responsibility for your own money, you are fair game for those who promise the world. The investment industry has some great people in it, but also a few former vacuum cleaner sales types (not that there is anything wrong with that!) who decided to up their game and take a three week course on how to sell mutual funds. Just last year, two high net worth women I know fell under the spell of different young and handsome insurance guys. The women gave the insurance brokers millions to manage in an annuity, which meant they missed the 20% move in equity markets since then, and are now locked in to a lifetime of 2% returns! Why? The young men spent lots of time having tea with them.  The best defense against being ‘not-so-smart’ with your money is investing time to answer the following questions: a)     Are you really interested in managing your own money or should you outsource to a professional? b)     Reflect on your values and be personally responsible for them. What really matters to you?  Align your investments with your values.  Don’t be vulnerable. c)     Women tend to be perfectionists. We think we have to be fully knowledgeable before we invest. This attitude paralyses us, doesn’t help us build wealth, so it is better to get started even with a small amount of money. Practice investing. This practice will build knowledge and confidence. Even if you are ‘not-so-smart’ once in a while, all will be forgiven.  So whether it's do-it-yourself or hiring someone you trust -  just get started! And always remember :  you know more than you think you do. Our woman in Helsinki - well done, Barbara Stewart! Barbara