Dispelling the myth that someday our prince will come is the most important financial decision we will ever make – Barbara Stanny
Unfortunately, this is a decision that countless women have yet to reach. In a survey of 23,000 women, the majority grew up with the expectation that someone else, usually a man, would do the financial planning in their lives. However, when women discover they like taking charge, they feel more secure and self-confident when they understand what is going on behind the scenes and know enough to make informed financial decisions.
Below are several other myths about women and wealth that you might not be aware of.
Myth 1: Women are not good at math
Nature, not nurture, accounts for the gap in math skills. However, there is a growing movement to expose more women to learning and mentoring opportunities in the fields of math, engineering, finance, and science.
Myth 2: Women are impulsive spenders
Money is an equal-opportunity, all-purpose mood changer. Just as many men impulsively spend and over shop as women. One major difference is how society labels it. Women over shop; men collect, a term that gives the activity an intellectual cast. However, the underlying impulse behavior is the same.
Myth 3: Women are too emotional to invest wisely
Female investors outperform men in the long run. Men try to compete with the market and chase returns, leading to more frequent trading and high transaction costs. Women take a long time to make an initial investment decision; they are committed to the decision in the long run. Women are less reactive to short-term changes in the market, trade less frequently than men, and realize better long-term investment performance as a result.
Myth 4: Women would rather let men manage the family finances
Women are the chief financial officers of their households in 66 out of 100 homes (2010 Women and Affluence Study by Women & Co.). Women in the ultra high net worth market reported they play a high to moderate role in the management of the family’s assets. When it comes to retirement, 90 percent of women participate in decisions that affect their household’s retirement and investment accounts.
Myth 5: Women are not interested in wealth management
The gender gap in finance is diminishing as women enter the field. Advising clients lends itself to a woman’s strengths in relationship building and communication, allowing female advisors to have the opportunity to outperform men. Organizations like Directions for Women and The Female Affect offer forums and networking opportunities to facilitate the advancement of women in financial services.
Understanding these myths will help you overcome any fears that you may have had when it comes to managing your finances. Do you know of any other myths about women and their wealth?