Time’s Take On Women As The Richer Sex
The March 26, 2012 Time Magazine cover depicts a figure in a skirt aside the feature article entitled The Richer Sex; Women are overtaking men as America’s breadwinners. I found myself staring at the figure, not realizing immediately why it appeared so dissonant with me until it hit me; double barreled.
First of all, the head of the woman is pictured with a Susan B. Anthony dollar coin, whereas the article stated that even today a significant “wage gap persists: women working full time earn a median wage that is 81% of what men make.” So, while the women’s wages have indeed risen from 59% to 81% of what men make for the same exact job with the same exact qualifications, the question remains, how much juggling is really required for women breadwinners to indeed support their families in the lifestyle in which they are accustomed when they’re only earning a fraction of what men are earning for those very same jobs? I’m thinking a LOT!
The second incongruity was that the $1.00 dollar bills are folded into the shape of a woman wearing a skirt. How yesteryear is that? I mean women have fought long and hard to get to the 81% level of males’ wages, and for the most part, they didn’t do it in a skirt; they did it in construction, engineering, as well as teaching and executive management, yet they were not hindered by the confines of a skirt. Was that depiction of a skirt, to intentionally avert the comparison that more “women now wear the pants” in families? Hmmmm.
Regardless of the cover picture, the article brings to light a remarkable sea change, insomuch as the fact that we’ve not seen this kind of seismic shift—whereby if the trends continue by the next generation, more families will be supported by women than by men–since women entered the workforce en masse after World War II, led by none other than Rosie the Riveter.
The US Bureau of Labor’s 2009 study shows that nearly 4 in 10 working wives outearn their husbands; an increase of more than 50% from 20 years hence.¹
¹ Mundy, Liza. “The Richer Sex.” Time Magazine 26 March 2012:30.
The old “deal” of women being subordinate to their husbands providing domestic services and sexual fidelity is officially off. Simone de Beauvoir, the famous French philosopher stated that women were poorer in every sense for ever accepting that “deal”, yet:
1) I don’t think there was ever a choice since society pegged the salaries of women significantly lower and gender-restricted several lucrative industries, and
2) I think that society at large was poorer in forcing individuals into gender-restricted roles that in most cases, didn’t work well, or at all. One wonders how much of this contributed/contributes to the over 51% of first marriage divorces today?
Interesting to me, as a Certified Financial Planner who advocates that couples routinely discuss their money, and major spending decisions, a Pew Research Center study found that when men were the dominant breadwinner, the major decisions were made jointly. Conversely where the woman was the dominant breadwinner, she made twice as many major buying decisions.²
While buying decisions are said to include financial services, it has been my experience over the past 33 years, that women still lag woefully behind in making the investment decisions. And when they do invest, they do so without proper education or training about how to create and monitor a portfolio, but rather with a mantra and investment discipline that matches, of “I don’t want to lose ANY money”. This results in women, even higher earning (and major breadwinner) women still invest more heavily in Interest Only and Bond investments, rather than stock investments. Why does this make a difference you ask? Well, first of all, historically speaking, no other asset class other than stocks has kept pace with the ravages of inflation; no other asset class has produced a return that would not only survive one’s tax bracket bite, yet also outperform whatever the CPI (measurement of inflation) rate was that year in order to buy the goods and services in that and future years. So, why have women eschewed stocks? They have succumbed to their own fear-filled emotions in pulling out of
² Mundy, Liza. “The Richer Sex.” Time Magazine 26 March 2012:31.
the stock market when it ebbs–as the stock market inevitably does in the normal cycle of investing—and then staying on the sidelines for fear of losing more.
Women need to think differently about money, and about investing. And when that happens, women will at least have a fighting chance to build retirement nest eggs, all the while supporting themselves, and perhaps a family as well. Until then, women’s financial needs will largely go unmet, and they will inevitably face a much longer working life than would otherwise be necessary.
The article speaks about men having “no map for the wilderness” of suddenly forsaking everything they’ve been conditioned and socialized to believe about their role in their families and in the larger society. Well while that is a concern, it is certainly LESS of a concern than my concern for women, who will NEED to invest wisely, as they generally take multiple year respites from the work force to have and/or raise children, and whose very retirement plans will need to provide many more years, to match their extended longevity—that is, unless their health declines as has been the case with men dealing with breadwinner stress, which will ultimately shorten women’s lives as well.
Let’s hope we women can use the men’s experience as a warning, and seek medical check- ups on a routine basis, so that we can nip any medical ailment in the bud, and continue to pursue our dreams—whether that’s as a stay-at-home mom, a mom in a breadwinning career, or a single woman in either or both capacities—as I also learned that 41% of babies are born to single women.³
The statistics of the last year have increasingly drawn our awareness to the sea change of women’s roles, and responsibilities; one of which is to attend to their/our finances—even if it is to delegate the core responsibility to a fee-only (objective) financial planner, as if our lives depended upon it, because they do.
We Can Do It Women!
³ Mundy, Liza. “The Richer Sex.” Time Magazine 26 March 2012:34.
“Put A Spoon In Your Underwear”
Ok, admittedly this is the ultimate tease; a headline grabber. Yet this is the advice given a young British girl, who’d overheard her parents discussing putting her on a plane to Pakistan for a forced marriage. Yes, in THIS day and age! The girl’s confidant told her to put a spoon in her underwear so that when she went through airport security, the alarm would sound, and she would be able to tell her story to the guard who would pat her down. WOW! These are truly words of wisdom, that are clearly strategic for this woman’s safety and hopefully, freedom from tyranny.
Imagine living in a society where choice is not an option. Choice about whom to marry seems so automatic to us United States’ citizens, it’s a real eye opener to read of those whom lack such basic choices.
So, the Women in the World conference this past weekend in New York, highlighted our need to support such women with our finances and time, to liberate themselves and their families and villages.
I’m quoting from this link, http://www.thedailybeast.com/women-in-the-world.html
Newsweek and The Daily Beast editor-in-chief Tina Brown, who organized the event, said,
‘What’s exciting about this event is that these women come here and get energized by the freedoms that we have here. I think that by showing these women that we care about them, that we support them, either financially or with time, it fortifies them in their struggle.’
So, this calls us into further responsibility to Master our Money now. We’ve no more time to waste on our excuses that “money is complicated”, or that we’re “not inclined to care about our money”. That last quote kills me when I hear US Boomer women say that. Well, I AM inclined to think about our money, as that will be our ‘ticket’ to greater freedoms and ultimately choices of how we mature, how we age, where we will live, how much we can travel, and, of course, how much we can loan or give women with far less than our (privileged) selves.
Join me to learn the basics of money and investing, and then strategies to Master your Money; it’s doable, and easier with an experienced money coach, so let’s get started, shall we?
A Clarion Call For Planning, Not Trading!
Today, as you most likely already heard, the DOW Jones Industrial Average closed up over 13,000, at 13,005.12 to be exact; the first time we’ve reached that level since May, 2008.
The logical question is, if this milestone made the news, how does that information impact my portfolio, and what action should I take, if any?
Well, to answer the first question, to the extent of your US Large stock holdings, your account value has gone up marginally from yesterday to today’s close, and would now be valued at slightly higher than it was in early 2008.
To answer the second question, no trading should be precipitated because of this news. As a matter of fact, market prices go up and market prices go down; they generally follow cycles that ebb and flow. Some pundits are stating that the market prices will surely pull back from here; suggesting taking measures to “lock” in their gains, however meager, right now. Yet if their gains have shown up mostly since the first of 2012, investors would be selling their holdings prior to having held the stocks or stock mutual funds for a year and a day, and thus be subject to short-term capital gains rates, which mirror your individual income tax bracket, whereas gains on assets that have been held for at least a year and a day are still taxed at a maximum federal 15% bracket—a real steal!
We must resist the press’ encouragement and urging to “act” based upon today’s (or any) day’s news, just as we would restrain ourselves from taking drastic action if our child brought home either an A or a D on a daily quiz. We may well ask the child what happened that resulted in either grade, yet we would most likely frame that single grade amidst several other quiz grades, and form an opinion as to whether the goal (in this case, our child’s education) is progressing in a satisfactory manner, or not.
Investing, like learning, is a task for several weeks, months and years. A day’s price does not an investment make! So, fair warning: just about the time our emotions get heightened the next time we hear, or read about stock market activity, I urge us to separate our emotions from our intellect. We will allow our emotions to question and react, and then we will harken back to our overall financial plan, which most likely entails purchasing investments—either with lump sums of money, or spread out over successive months; through a process called Dollar Cost Averaging.
Dollar Cost Averaging it the fancy term for splitting one’s lump sum into equal monthly installments that will be invested, perhaps at the end of each upcoming month, over a period of 6-12 months, generally. So, if we have 24,000 to invest, we might spread that investment over, let’s say, 6 months. Here’s how that math works: we divide 24,000 by 6, and the answer is $4,000. We would invest $4,000 at the end of February—tomorrow, and then invest another $4,000 at the end of March, and then another $4,000 at the end of April, and then May, June and finally July. Yet, because we do not have a crystal ball, we cannot tell if the price of these investments will be higher or lower than today’s value, so one strategy to mitigate that price risk, involves making systematic monthly purchases through Dollar Cost Averaging, that overall, have proven to be more effective than attempting to select one particular day in which to invest our lump sum.
This process has worked very well for investors, and it is the exact model that most 401(k) retirement plans, and most 403(b) pension plans utilize by allowing the employee to select an amount that they want to invest, such that the employer simply takes that amount right off the top of each month’s—or pay period’s check—and invests that money directly into the retirement plan sub-accounts. This automatic investing often compounds into a respectable sum in even a few years.
Actually, we really want the price of our investments to drop while we are investing, as when that happens, we are able to purchase more units of the investment. Here’s an example of us investing $200 per month, each and every month. Let’s keep the math simple now, by make believing we’ll be investing only into one sub-account, whose price today was $5.00 per share. So, we divide $200 by $5.00 and we get 40 units for our investment today. If the market price of that sub-account goes up to let’s say even 5.50 per share next month, we’ll only be able to purchase $200 divided by $5.50, which is 36.3636 units. “Yes, but the units are worth less than yesterday, you retort!” My reply is that your focus needs to be on accumulating as many UNITS as possible, rather than concerning yourself with the actual price of that particular sub-account. Upon your retirement, or whenever you choose to begin withdrawing sums of money, we’ll decide which particular units we wish to cash in first, as by then, you will have amassed probably 4 -8 different subaccounts.
Summarizing then, IF you do not have a strategy for investing now, IF you do not know whether you should be in the market or not, then the first step is to review your short term and medium term goals against the monies you have stashed wherever, and determine if you are poised to meet your goals. If not, may I suggest that you begin to invest, systematically into the markets, and especially the stock markets for any amounts that you are expecting to grow at a rate that would (as least historically speaking) perform at a higher rate than the cost of living (inflation).
Let’s develop or hone our plans for investing and be diligent about sticking to our plan, rather than being “whipped by the wind” of individual days’ price swings. I suspect we are in for yet MORE price volatility, so make your plan, work your plan, and once a year review your plan, preferably with a fee-only Certified Financial Planner, who can ensure you are effectively diversified, in order to meet your goals.
As Margaret Thatcher’s advisors admonished her in the movie, Iron Lady, “if you want to change ….. lead! God Speed to you, as you lead your investing with a well-thought out plan, and then you follow that very plan, period.
It’s Not Too Late To Learn About Money!
No matter how old you are, it’s never too late to learn a new thing or two. Money and investing are no different. You may have lost some upswings, but you will also have missed the downward plunges. It’s never too late! Our happiness is far too precious NOT to make the time for this educational and profitable money tour. Today, I wanted to share some folks who came into their own greatness later in life, by way of inspiration.
- Mary Somerville: Scottish scientist and feminist, who published her last book published at age 89
- Evangeline Booth: first female International Salvation Army Chief at 69
- Margaret Mead: was still working and publishing in her 70′s
- Julia Flikke: first female US Army Colonel at 64
- Vaira Vike-Freiberga: Latvia’s first woman president at 61
- Marlene Baldwin: former prostitute and brothel madam who later ran a successful direct-mail advertising company from home, at 64 named CA’s Businessman of the Year (2004) by the National Republican Congressional Committee.
- Muriel Siebert – First woman to hold a seat on NY Stock Exchange. (I was privileged to chat with Muriel and was awed by her tenacity.)
And that’s just the first 7 that come to mind!
Small steps, taken one at a time, a journey makes. We can master the money mindset. Then, we can move on to how money works and lastly, how money can work for you. It’s not impossible, it’s just a question of breaking things down into manageable steps. Just like recovering from major surgery, losing weight and, frankly if you’ve had the misfortune to live this, grappling with grief.
We can do it, Women! Rosie Riveter wasn’t alone, and you aren’t either!
Excerpt from the upcoming book, “Financial Fitness For Women”, due out this summer.
Managing Risk – Part 1
How you’re managing risk determines the success of your investing strategy overall. It’s a complicated topic, but not a scary one. As is evidenced, by the straightforward path we took on with this week’s podcast.
We posted some deeper descriptions on benchmarks in a recent blog post.
