The Self Invested Women Project

Perhaps you have had a long and successful career, but as retirement looms, you’re worried about what the Great Recession did to the size of your nest egg.

Maybe you’re one of the lucky long-term employed, who is advancing in your industry, but wondering if you’ll always be spending a majority of your precious time in high-powered work – and little else.

Or perhaps you are a full-time homemaker hoping that your old age will be comfortable in the face of looming cuts to Social Security and Medicare.

Then the good news is that you have lived during a time when women have attained more choices about how we live our lives than any other time in history.  By beginning to define your goals, you have begun the process of investing in yourself.

By building on that process of self-investment, you will also

1. Give yourself time to understand where you are now and where you want to be; e.g., when you’re no longer working, or dependent on anyone else
2. Understand the reality that you’re likely to live longer and earn less than men do
3. Realize that you have many smart investing skills now, and learn to apply those skills to other forms of investment via the capital (stock and bonds) markets
4. Accept responsibility for achieving your personal financial liberation
5. Learn where to look for help in determining your financial next steps.

Ideally, this process would begin when a woman is in her 20’s.  Realistically, however, that is rarely the case.  It is nearly always when a woman reaches 40+ that the realization that her financial future is fast approaching begins to dawn on her.  It is then that we have both the realization and the resources to begin to take action.

Now, as we emerge from the financial crisis, the importance of our financial security has risen to the forefront of our lives.  Now, we see countless examples of

• Dwindling retirement accounts
• Tumbling home prices
• Unemployment
• Rising health care costs

This can result in our feeling of expendability and contribute to the pervasive ‘bag lady’ fear many of us share.  Our challenges accentuate the importance of knowing and applying time-tested financial strategies.   We can use this crisis as motivation to invest in ourselves.

Yet, some of us feel confused and uncomfortable when we try to learn about finance.  Everyone else seems to be an expert.  The jargon is unfamiliar and there is conflicting advice from financial professionals, making the process sound unnecessarily complicated, when in fact, managing money is relatively straightforward and easy to understand – when it’s presented in plain English.   It is most certainly something you have the intelligence to do for yourself.

Why is it important that you learn the skills to manage your financial life?

• We earn about 20% less than men.
• The average US woman spends eleven years (about 25% of her total career) outside the workforce as an unpaid caregiver for a family member.
• Full time homemakers are financially vulnerable to divorce, as well as their spouse’s illness, unemployment or death.
• We live longer than men.

We need to be better at money management than men, or risk living in poverty as we age.

As we age, our financial vulnerability becomes more evident.  As of 2007, the US Census Bureau shows that twice as many of us live our old age in poverty as men:

• At age 65 – 74, 6.5% of men, and 10.8% of women live below poverty
• At age 74 – 84, 6.3% of men and 12.3% of women live below poverty
• At age 85+, 6.6% of men and 12% of women live below poverty

A 2006 poll conducted by Allianz, a Minnesota insurance firm, revealed that 90% of women say they feel financially insecure, and 46% of all women –almost half of whom earn more than $100,000 annually – have a “tremendous fear of becoming a bag lady.”   That same year, MSN Money columnist Jay McDonald noted that “Lily Tomlin, Gloria Steinem, Shirley MacLaine and Katie Couric all admit to having a bag lady in their anxiety closet.”  And, I readily admit that I share this fear.

It’s critically important that we do not abdicate the responsibility for our financial future to others, as we have seen from the results of investors with Madoff, Stanford, WorldCom, Enron and a host of others.

No one will do a better job for us than we will do for ourselves.

Fortunately, women are some of the best investors.  We know a deal when we see it, whether it’s at Target or at a vintage clothing store.  Women are as “naturals” at investing.  And, when I taught “Financial Planning for Women” at UCLA, we showed women that transitioning those skills was quite simple.  By investing time in ourselves learning to manage our financial lives wisely, we gain the knowledge we need to apply these skills to our financial life.  After all, fully half of all stock market investors are women.  The only mistake we should fear is knowing we have financial challenges, and failing to invest the time in ourselves to learn how to face them.

We don’t need to know every excruciating detail of the process to manage our financial lives.   All we need to know is enough to control and manage our course.    I am interested in talking about how to become financially competent women, taking charge of our financial lives, just as we’ve taken charge of our life’s work.

Let’s get the conversation started.  What are your greatest financial concerns?