This week’s theme is smart women retire rich. It’s a week devoted to some important information that women need to know about managing money and finances.
So many women go through life with little to no involvement with the household finances, especially your investments. But, at some point, either because of divorce (which is now skyrocketing for couples later in life) or widowhood, there is a high probability that you will be thrust into managing your household finances.
This can be scary, so I’m giving you a few principles and some action steps you can take today to prepare yourself for this very real and likely possibility.
Today’s tip might offend some of you male listeners, but that’s ok because I’m just preaching the truth.
Women are actually naturally wired to be better at investing than men. Here’s what I mean by that. When it comes to investing, women tend to be more patient, long-term oriented, and more risk-averse. Several studies back up the gender differences between men and women, finding that men tend to trade more frequently, be more short-term in their thinking and expectations and are willing to roll the dice more.
And sorry guys, but these differences in traits leads to a significant outperformance by women over men in the stock market. In fact, a study done by Fidelity Investments found that women outperform men by about .4% per year. This may not sound like a lot, but when you attach real dollars to this over a lifetime, Jane is kicking your butt by several hundred thousand dollars.
Of course, there are plenty of men who are amazingly talented investors. And men are more well-known for investing, not because they are better at it - the studies point to the opposite - but simply because men are more likely to just be investors in the first place.
But I think women underestimate their natural abilities and qualities when it comes to managing their money, and it’s time that that changed. So if you are a woman who lacks confidence in your financial and investing prowess, take heart. We naturally possess many important qualities that set us up to be successful investors.
That’s it for today. Before you go, please take a minute to leave a review for the One Minute Retirement Tip in Amazon or iTunes. If you find these tips valuable, or if you have feedback for me or topic suggestions, it’s a great way to share the love and share your ideas with me! And thanks to you if you have already left a review.
Thanks for listening. My name is Ashley Micciche and this is the One Minute Retirement Tip.
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