We receive hidden messages all the time. It’s as if society has a rule book that is so pervasive that no-one needs to read it. Most everyone knows the rules. You only have to slightly step out of line at a social event for alarmed or disapproving faces to let you know that you’ve broken with convention or overstepped a mark.
I don’t think these social rules just serve to help us behave ‘correctly’ in high society. Decades, centuries even, of tradition and expectations shape how we think about ourselves and each other. It’s a changing world, however, and some of those traditions need to change with it. Some rules need to be rewritten.
That’s why this series of blog posts has focused on the myths involving women and their money. I’ve taken several of the most persistent and powerful myths and broken them down, one by one.
This is now the last post in this series; however, it’s probably the most important as it highlights just how damaging some conventional thoughts about women can be. As a professional woman who chose a career in the male dominated field of finance, I enjoy helping women realize that they are every bit, and sometimes, more, savvy with money as men.
Research Says Women Don’t Understand Money So It Must Be True…?
Unfortunately, data suggests that women don’t understand money. But, let’s dig deeper.
Annamaria Lusardi is an Italian economist working in the field of financial literacy. For twenty years, she conducted research by asking subjects all over the world about their understanding of three financial concepts. She asked just three questions about three topics: inflation, diversification and compound interest. Approximately four out of every ten men understood the concepts, double the amount of women who did.
So, we can assume then that women just don’t understand money, right? Wrong! The answers don’t tell the whole story.
The researchers realized that women were choosing ‘don’t know’ as an option far more often than men. When the ‘don’t know’ option was removed, there was a significant increase in the correct answers from women. So it’s not that women didn’t know as much as men; they believed that they didn’t know. Take away that option, they dig deep and find the answers.
Do Women Lack Confidence In Their Own Abilities?
We’ve seen in a previous post that women aren’t generally perceived as being as confident as men. So is that what we are seeing here? Are we seeing a lack of self-belief and women underestimating themselves and their capabilities? Possibly. And it may well be that women’s confidence just looks different than a man’s.
Women are often seen, especially in the financial world, of being afraid of taking bold decisions and acting quickly. This is amplified in the investment world, where women make fewer trading transactions and are perceived to take fewer risks. But actually, with investments especially, women seek to fully inform themselves before making any big decisions (and it pays off). With their knowledge comes their confidence.
So maybe in these studies women are doing as they tend to do elsewhere; seeking the bigger picture, not already assuming they are right, scanning the horizons for all the information they need. And that’s exactly what I see when a woman comes to see me as a financial advisor.
Does a Woman Need More Help Than a Man?
So along with the idea that women don’t understand money is the complicit agreement that women need more help to understand their finances. Wrong again. They don’t need more help at all, but they invite it.
Science suggests that women prefer to work collaboratively, gaining more from teamwork and knowing they will benefit from others’ advice. Men, on the other hand, prefer to work individually, and competitively. Women are not scared to admit that they may have gaps in their knowledge, and are eager to learn and gain more confidence.
And I see this all the time in my work. I see incredibly capable women who know they need guidance. They want to learn and to benefit from understanding why we are doing what we are doing.
However, they do not want to be patronized or treated as if their thoughts and feelings about money don’t matter. They reach out to me so that they will feel understood while at the same time making smart financial decisions that bring them peace of mind and a less stressful life.
Traditionally, women did not have the same access to finance and financial services as men.
However, women are much more independent now and control the majority of wealth in this country. Women are proving that the idea that they don’t understand money is just another myth to be discarded.
Take Control of YOUR Financial World
Women make fantastic investors. Women, generally speaking, make excellent financial decisions. And they seek out the answers before they act on incomplete information.
Most of my clients come to me later in their life, after they’ve gone through a big life change – maybe a divorce, a death of a spouse, or a significant change in circumstances where they know they want to make the most of their resources.
They may be feeling particularly vulnerable and they are searching for an advisor they can trust to guide them through the next phases of their lives–someone who can advocate for them and help them make sense of their new situation.
It is humbling to me to be that expert, and it is rewarding to help my women grow and become more confident in their ability to move forward and to make the right decisions for themselves.
If you need more guidance to make sure that you can make the financial decisions and choices that are right for you, please do get in touch and schedule an appointment. We may be a great fit for each other!