How Financial Life Planning is Different for Women, Part II: The Behavioral Differences
1. Women are Better Investors
Luckily, women are statistically better investors, which can help to overcome some of the challenges discussed above. Women tend to be less inclined to jump in and out of the market based on “hot tips” or media headlines. As investors, they are typically better at sticking to their devised financial plans and staying the course through market fluctuations. As a result, a study performed by Fidelity in 2016 of more than 8 million clients found that women generated investment returns that were higher by 40 basis points, or about 0.4%.
Does this surprise you? It surprises many, especially since women tend to be stereotyped as less financially savvy than men. But, the numbers don’t lie. Once women take control of their own finances, they find their probability of success is indeed higher than they expected.
2. Women Have Different Values
Women think about money and wealth differently than men. Women focus more on family and charity, citing examples such as “spending more time with family,” “helping family,” or “making a difference” as top priorities on their list of personal values. Security and freedom are also 15 to 20 times more important to women than status and respect, which are two of the biggest motivators for men. Because what really matters to women about life in general is different, so too will the way they align their spending to those values.
- Women are Eager to Learn
Women value education and are eager to learn. Not only are women more inclined to learn and study, but also to ask questions and admit they don’t have all the answers. This is what also makes them such great investors. Their investment decisions are not ruled by ego or the desire to outperform, but rather to secure financial security for themselves and their family.
As a result, women also tend to be very coachable and advisable. They understand that there are experts in the field who can guide them as they learn to manage their finances and invest over the course of their lifetime.
Putting Life and Money in Alignment
Overall, we hope you can see that there are several factors that make women’s financial life planning unique. Women should consider that they will likely need to save for more years of retirement income than men and may have to make special considerations to do so given any caretaking roles, the wage gap, and the potential to end up on their own later in life.
As advisors who specialize in working with women—and specifically women in transition—we understand how best to approach these financial and behavioral differences to position a woman to achieve more. It is our goal to help a woman live a rewarding life and feel good about the way she spends her limited time, money, energy, relationships, and talents.
If you’re interested in learning more about our exclusive wealth management services for women, please take a moment to browse our site and read some of our latest articles. We would also love to interact with you on social media should you wish to connect on any of our platforms. Financial life planning for women is our passion and we love to share that passion with the right individuals.