Moving From The Moment To The Future
Shifting the focus from the short term to the long term.
Provided by Kim Gaxiola
How many short-term financial decisions do you make each week?
You probably make more than a few. They may feel routine. They may demand your attention, day in and day out. Yet in managing these day-to-day issues, you may be drawn away from making the long-term money decisions that could prove vital to your financial well-being.
How many long-term financial decisions have you made for yourself?
How steadily have you saved and planned for retirement? Have you looked into ideas that may help to lower your taxes or preserve more of the money you have accumulated?
As Nielsen notes, women are the financial decision-makers in their households – they not only make the lion’s share of the nation’s consumer purchasing choices, they also influence or handle many buying decisions on durable goods such as cars and houses. Fleishman-Hillard Inc. forecasts that women will control 2/3 of consumer wealth between now and 2023, and will be predisposed to inherit the bulk of the biggest generational transfer of wealth the U.S. has ever known in the coming decades.1
While many women feel adept at making money decisions for today, some are less confident about making financial decisions for tomorrow. That anxiety may be unwarranted, however.
University of California professor Terry Odean has spent more than 20 years breaking down stock market investing behavior by gender, and believes women are better investors. He has numbers to back this up: as the Washington Post noted, he studied male and female investors over seven years and found that women got 1.4% better overall returns than men did. Across the length of the study, the investment returns achieved by single women exceeded those of single men by 2.3%. Investment groups populated by women got a 4.6% better return versus investment groups made up of men.2
Odean feels that men suffer from overconfidence in investing, while women invest more pragmatically, turning away from opportunistic day trading and taking more of a buy-and-hold approach. A bit controversial, this assertion? Perhaps. The statistics certainly get your attention. The bottom line is that women may be more adept at investing than they think.2
Even if you feel you need more financial or stock market literacy, you may fundamentally have the temperament to be a good long-term investor.
Where do you stand financially?
Start by taking an inventory of your investments and savings accounts: their balances, their purposes. Then, take an inventory of income sources: yours, and those of your spouse or family if applicable. Consider also your probable or possible income sources after you retire: Social Security and others.
This is a way to start seeing where you are financially in terms of your progress toward a financially stable retirement and your retirement income. It may also illuminate potential new directions for you:
*The need to save or invest more (especially since parenting or caregiving may interrupt your career and affect your earnings)
*The need for greater income (negotiate for a raise!) or additional income sources down the road
*Risks to income and savings (and the need to plan greater degrees of insulation from them)
Devoting even just an hour of attention to these matters may give you a clear look at your financial potential for tomorrow. Proceed from this step to the next: follow with another hour devoted to a chat with an experienced financial professional.
Tech Girl Financial is a part of Gaxiola Financial Group. Registered representative, securities offered through Cambridge Investment Research, Inc., Broker-dealer, member FINRA/SIPC. Investment advisor representative, Cambridge Investment Research, Inc., a registered investment advisor. Cambridge and Gaxiola Financial Group are not affiliated.
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This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.
1 – nielsen.com/us/en/insights/news/2013/u-s–women-control-the-purse-strings.html [4/2/13]
2 – tinyurl.com/p4wqt8e [10/11/13]