Happy Financial Freedom: Women Invest In Independence On Their Career Paths
As we celebrate Independence Day, we see that fireworks can last one night—or a long weekend– but financial independence can last a lifetime. For millions of women, financial independence is hard-won and deserves its own celebration. And a sigh of relief.
Many financial and investment services companies and institutions now recognize the necessity for “gender lens investing.”
No longer are marketing campaigns, investment strategies, approaches or best practices effective if aimed at men only. Women control trillions—yes, with a “t”—of assets in this country and are commanding attention and customized treatment.
“This is something I have been nurturing in my practice and teaching the new generation of financial advisors,” says Sonia McCloskey, a financial advisor with Edward Jones in Arvada, Colorado, an area included in metro Denver.
Edward Jones, an investment firm that deals exclusively with individual investors for financial services, serves 7 million clients in 13,000 offices across the country. As an advisor there since 2010, McCloskey says for women investors, financial freedom means peace of mind.
“The major thing for women is, ‘Am I going to be OK?’ Female investors are planting a seed and they want to know, ‘How do I nurture the seed so I have a tree 10 years from now,” says McCloskey.
Women on every phase of their career path want to know the money is going to be there, McCloskey says. They ask, “How do I get on track? How do I stay on track?”
Growing up in Spain, McCloskey says she remembers her grandmother literally had money saved and stored underneath her mattress. Even today, Millennial women in this country are savers, she says, contrary to the myths about their money habits. Women of all ages and career levels are concerned with their financial health and their financial futures, not relying on husbands, partners or others to take control of their assets.
Women want to create investment plans so they have money available in the future if their children get sick, or if they need to pay for their own medicine, repair the water heater, take a trip once a year, or be philanthropic, says McCloskey.
On the other hand, McCloskey says, typically a male investor will want to know, “What is the latest stock to make me millions?”
Because of these different approaches, McCloskey says, the unisex approach is becoming obsolete. Others in finance agree men and women are different investors.
“Responding to studies confirming that women and men often differ on investing preferences, risk appetite and defining success, some newly minted companies founded by women offer portfolios designed for female investors. In the United States, women control more than $11.2 trillion of investable assets and up to 80 percent of all consumer purchases,” according to Bank of America-sponsored content in the Washington Post.
And women are good at investing.
A new study by Fidelity Investments “found that women earn higher returns on their investments than their male counterparts by about 0.4 percent. This number may seem small at first glance, but can have a significant impact over time,” Kelly Burch writes in The Daily Worth.
“It’s also time to change the narrative around women and money. Alarmingly, Fidelity found that only 25 percent of women say that they are a primary decision maker (which includes being a decision maker alongside your partner) in their households,” Burch writes.
The Women of Wealth Study 2015 from Family Wealth Advisors Council reports, “The wealth management industry has paid a significant amount of attention to the tremendous growth in the women’s market and justifiably so. Women are increasingly controlling more of the nation’s wealth, and the rise of the breadwinner woman is causing seismic shifts in our families, our communities and our marketplace.”
The study continues, “The evidence of the switch in financial power from male to female is undeniable. In four of 10 American families, the woman is the breadwinner. Nearly 95 percent of women will be their family’s primary financial decision maker at some point in their lives. Women account for more than 40 percent of all Americans with gross investable assets of more than $600,000 and 48 percent of the country’s millionaires. An estimated $25 trillion will accrue to women through 2030 via generational and spousal transfers. By then, at least two-thirds of the nation’s wealth will be in women’s hands.”
So women literally hold the country’s purse strings. With that comes economic power.
The power to invest and obtain financial freedom adheres to Take The Lead Co-founder and President Gloria Feldt’s 9 Leadership Power Tools. The tools advocate the “power to” accomplish a goal, not see it as power “over” something or someone.
Women don’t get caught up in knee-jerk reactions to the market, McCloskey says, and as a result “are better investors.” She also says it is not so much about a confidence gap as some others claim, but about women asking questions and engaging actively in the investment process.
The trend over the last few years with women investors is they want to deal with female advisors, says McCloskey, who recruits and hires female advisors for Edward Jones in her region. A client wants her advisor “to talk to her, not at her.”
Edward Jones was ranked No. 31 in the U.S. out of 100 Best Workplaces for Women in 2015 and No. 6 out of 100 in Fortune’s overall 100 Best Companies To Work For that same year.
“The increasing number of single women in America contributes to women’s growing share of wealth. Women now are more likely to be single than they were a generation ago, whether due to being widowed, deciding not to marry, to marry later, or divorce. Whether single by choice or by circumstance, women are accruing greater wealth and playing a greater role in their financial decision making,” according to the Women of Wealth study.
McCloskey has specific advice for all women to achieve financial independence whether at the start of their careers, or if they are planning to check on financial health at every stage of the career path.
“Don’t be afraid to work with a professional and have a plan. We have an established, proven process and we partner with you for a lifetime. This is not a transactional process,” says McCloskey.
“Don’t be afraid to ask for help when you have too much debt, are thinking about buying a home and are making a budget,” she advises.
“Use Quicken or Mint to analyze how much you are spending and decide what could happen if you take 20 percent of what you are spending and invest it,” says McCloskey.
As a teen, McCloskey says she was a member of the gymnastics team for Spain competing in the 1988 Seoul Olympics. She says she moved to the U.S when she was 18 and married when she was 21. Now married for more than 20 years, McCloskey says she remembers a moment in her 30s when she realized that even as she was happily married, she was also financially independent.
“I realized if something happened, I am going to be OK, no matter what the circumstances are. I made a plan, and I followed the plan,” McCloskey says.
“That was freedom. I realized I don’t need anybody to take care of me. And that’s what a lot of women are realizing.”
As the nation celebrates Independence Day, it may be time to plan for your own financial freedom.