This week on the Retire With More show we had a very special returning guest, our very own Sally Brandon. Sally joined us as we took a closer look at the differences between how men and women invest for retirement. You may be surprised to learn that when it comes to who can be a better retirement investor — who can take their money, their nest egg, their savings and compound it on a long-term basis and end up with a better result — it’s women.
While women have the potential to be a better investor for retirement, they are much more fearful. In this week’s episode, we broke down the top five biggest fears that women face when it comes to investing and how they can overcome these fears and actually outperform the men in their lives.
Fear #1 — Not having saved enough money to maintain your lifestyle
Women’s biggest fear is whether or not they have saved enough money. While “enough” for most means not having enough to maintain their current lifestyle, some women go so far as to fear that they will not have enough money to take them through the rest of their life and even believe that they are going to end up on the street.
“I urge all women to really take control of the controllables and to add to that by creating a financial plan. Plan for the worst so that you can feel in control and hope for the best. Look at your spending habits and look at what you are saving. If you are not where you need to be, then set goals to put money aside at a steady pace to eventually get there.” — Sally Brandon
Fear #2 — Not being smart enough or confident enough to know what to do and how to do it
Women’s second biggest fear when it comes to financial matters is that they do not feel smart enough. They don’t feel like they know what they are doing or how to do it and because of that they do not feel like they can make good decisions. At Rebalance we believe that women should no longer take the back seat.
“Women need to learn about investing and get up there in the front seat with their husbands. There are so many financial blogs out there that they can read to familiarize themselves and get comfortable with the terminology in the financial world. Learn more about what your options are and what investment instruments are available to you. If it means seeking out a professional financial planner or an investment advisor, finding someone that you can trust, I think it is really important and it will go a long way in building that confidence.” — Sally Brandon
Fear #3 — Losing money
Women in general are afraid of losing money. They are afraid of losing money in the market and they worry about not having money on hand for emergencies. As a result, instead of putting money into the market where it can grow, they are holding on to it in cash or in really low-interest accounts.
“In order to grow your wealth, money that is earmarked for down the road, it is important to move out of cash, and if it is invested wisely you can benefit from the money compounding over time. If you invest in a smart way by putting your money in investment vehicles like index funds, the fear of losing money is really not a fear that you need to worry about.” — Sally Brandon
Fear #4 — Burdening your children
Women by nature are caretakers. They are always taking care of everybody else, so they are not as comfortable with the thought of somebody else taking care of them. By getting control of their finances and putting together a plan, women are not only doing themselves a favor but they are also setting a good example and will raise financially responsible, independent children.
“Being a mother, I think my instinct is to want to pay for everything for my son for college and maybe put off my own retirement. In reality though, that would be doing myself and, quite honestly, my children a disservice in the future, where they could take a loan out for college and I can’t take a loan out for retirement. Not only that, but then I could potentially be a burden for them later in life.” — Sally Brandon
Fear #5 — Not being able to support yourself if you never get married
Women worry that if they do not get married, then they will never be able to support themselves, which in reality is not true. Some women have this “princess mentality” that it’s better to marry a high-earning man because your husband will determine the standard of living for you and your children. The problem with a princess mentality is that it takes away this internal locus of control, which is the belief that you are responsible for making your own way in the world.
“I think it is important to figure out whether you have a ‘princess mentality’ or not, and if so to get over it. You are in control. We can fend for ourselves. Women are very successful at working and saving. It’s very important that women know that they could do it on their own should they have to.” — Sally Brandon
Be sure to catch up on previous episodes of the Retire With More show.