Women and Financial Wellness: A Look At The Current Landscape: Having worked in the financial industry for over 27 years, I still see that women are not being served well by the financial industry. They also aren’t confident about investing and their retirement.
UBS, a global financial services company, completed a global survey in 2019 on how women feel about their financial security, and whether women are confident in making financial decisions. The results were rather disheartening.
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According to the survey, more than 50% of women leave financial and investing decisions to their spouse, even while they perform the daily budgeting and spending responsibilities! Only 23% of women globally take charge of their financial planning decisions, and 74% of divorced and widowed women have discovered that their financial situation was worse off than they assumed.
Another recent study from Morningstar shows that 84% of women expect to work past 65 years old due to money constraints. Another 90% of women will have to be in charge of their own finances at some point during their lifetime. This information isn’t taught in our high schools in the US, and not even in college unless you’re a finance major. This means that women shouldn’t be critical of themselves for not knowing this, and we all need to invest in ourselves by learning these topics.
The reality is that most women are going to be in charge of their own money decisions at some point in their life. So, the sooner a woman achieves financial wellness and learns the concepts of managing money and investing for the future, the better off she will be.
Creating a plan and thinking long-term when investing provides a very successful outcome for people versus picking stocks and short term trading. If more women were involved with their household investments, it could be very beneficial for the entire family. Ally Bank sponsored a study in the U.S. where 44% of couples under the age of 55 years old stated that money was a top cause of stress in the relationship. If you have children, these attitudes and stressors around money get passed along and observed whether parents realize it or not. Talking to your kids about money and helping them create positive habits at a young age can set them up for a lifetime of success.
I know that there is so much jargon within the financial industry that makes it intimidating. Technology has changed investing and financial planning by making it easier and less expensive for everyone to get started in a way that meets their situation and needs.
I think part of the challenge for women and financial wellness is that approximately 80% of all financial advisors in the US are men, and I am going to guess it isn’t that much different around the world. It can be hard to understand all the different resources available with financial services. There are different titles of financial coach, financial planner, and financial advisor — and they all are a little different and charge fees differently.
It can be hard to make a good decision if you don’t know what all of your choices are, and what might be a good fit for you and your situation. How can you know who to trust if you don’t know how fees are charged or what questions to ask? All of these challenges can prevent women from taking action and being in charge of their financial future. I think women want other women to talk with about their money, but don’t see many choices or ways to go about doing that. This is why I created and structured my business the way I did.
Another challenge for women and financial wellness is that the internet has created a misconception that trading and long-term investing are the same thing, and that the only way to invest is to learn to pick stocks. That really isn’t accurate. Through mutual funds and exchange traded funds in the U.S., investors have a way to own shares of a basket of stocks or bonds so it’s more convenient and easy to implement.
Trading is very short-term in nature which can be high risk, stressful, and require a lot of time and attention during the day. Long-term investing is about creating the right mix of investments based on your money goals and risk appetite to help smooth out the volatility.
Many articles on social media talk about how you would be a millionaire if you had invested in Amazon or Google 20 years ago. It’s easy to see things in hindsight, but when you are living through new inventions in technology and large market swings, it can be hard to predict which company will be the winner over the next 10 or 20 years. That is why it is often a good investment to own a basket of stocks and bonds and think long-term so you can let the future play out and still have your money grow for you.
Being a successful investor starts with a financial plan. Then taking the next step to get started with investing is the path to a secure financial future. It’s about learning a little history and combining investments to smooth out the long-term ride in a way that fits your life and situation.
Want to learn more about women and financial wellness? There is a free guide you can download off my website DebraOhstrom.com that is all about Decoding the Financial Advice industry. If you have any questions or need any help please contact me at Debra@debraohstrom.com
Bye for now,
Debra
DEBRA OHSTROM
Debra Ohstrom, CFA is a financial educator and coach focused on empowering women to be confident and in control of their financial wellbeing. Debra has worked in the financial industry for over 25 years and has an MBA in Finance and the Chartered Financial Analyst designation. She has built an on line course and coaching program to educate women to understand money and investing with ease so they can achieve the life they desire.
Debra has spent a majority of her career working at large firms such as Merrill Lynch, Morgan Stanley and Citi Private Bank in New York City and traveling the country working with clients. She grew up on Long island, NY and now lives in Charleston SC with her husband.
Being raised by a single mom, Debra watched her mother struggle with money and saw how that impacted other parts of her mother’s life whether it was her health or her relationships. This motivated
Debra to become a financial expert and Debra is on a mission to demystify money and long-term investing so that all women have the knowledge they need to make good decisions for their financial
health and achieve a secure financial future.
