Girls must plan if they want to have to have
funds - that could have been the title of this book. Its New
Zealand author is on a mission to encourage women to take more
control of their finances in order to achieve their goals. These
might include a comfortable retirement, saving for a house deposit
or taking debt firmly in hand. The first part of the book is
designed to persuade women that they need actively to consider
their attitudes to money, saving and spending. The second moves
from the why into the how of personal financial management.
While a quick trawl of
Amazon suggests that neither the title nor the concept for this
2005 book is original, it is Sutherland's explicit, and localised, focus on
women that made this introduction to investing enjoyable for me.
Her wry tone didn't hurt, either. (On divorce: "nothing helps
wounds like that green poultice, money"). Unlike its American
equivalent, it is aimed at women of all ages who want to - need to
- know more about this topic, and at no time does it take a girly
tone.
Women's Life Patterns
I rate myself as moderately knowledgeable about finance. As
such, I didn't learn a lot new on the technical side from this
book, but I did particularly enjoy the statistics Sutherland
marshals to show how challenging women's life patterns are to the
aim of achieving financial independence. Her call to action
includes such sobering observations as:
- Divorce leaves women's income down 24%. Men's falls, too, but
only by 6%.
- On average, women take ten years out of the workforce to care
for dependents while men take only one.
- Women still earn less. (See our feature article
Slip-Slidin' Away for the recent, and still depressing,
statistics on pay inequity for New Zealand's women professionals,
including those in the most senior positions).
Low Involvement
These, and other life patterns, indicate that women should be
planning ahead in order to make the most of the income they do
generate. Yet, in Sutherland's 25 years of experience as a
financial advisor, they often don't. The trigger for changing from
this passive behaviour tends to be a traumatic event such as the
death of a husband.
Why are women typically less involved in financial planning than
men? After all, many women take lead responsibility for balancing
the family cheque book, paying bills and so on. The author suggests
innate traits as well as socially-conditioned responses to money
can hold women back from learning more about how to bridge the
financial gaps between today's reality and tomorrow's desires.
Nice Girls Don't!
For example, nice girls don't worry about money because one day,
they are implicitly promised, their prince will come. Apparently,
parents are much slower, on average, to encourage daughters to
save. Sons get the message around 13, but daughters not for about
another five years.
Sutherland acknowledges the emotional and societal barriers but
systematically addresses them, pointing out how some are myths
(yoo-hoo, Sir Galahad, over here…) while others, like the fear of
making a mistake, can be managed with straightforward education on
the basics of investing, debt management and more.
Test Yourself
The author provides a number of quizzes, exercises and
worksheets for readers to complete as she takes them along the path
of financial planning. Her years of coaxing information out of
clients about their risk tolerance, time frames and money-handling
styles no doubt helped her craft many of these. I confess I only
filled in the multiple choice 'quickies' - but was happy to see
that the broad direction indicated by my answers on asset
allocation pretty well matched the investment profile that my
husband and I have.
Financial Advice
Women who complete even some of the exercises may well find they
gain new insight into their personal financial situations. This may
make for more meaningful discussions with a financial advisor, if
they choose this route. The book provides a checklist of questions
for shopping around for such advice and also outlines typical fee
structures and services offered. Sutherland is at pains to point
out that an advisor isn't mandatory. For readers with time,
confidence and especially (author's emphasis) self-motivation, she
says a DIY path is feasible. Having read her chapters on asset
classes and the myriad options available within them, however, my
sense was that greenhorns would pale at the prospect of going it
alone. So would those with limited time.
Can You Afford Not To?
Although no investment return can be guaranteed, and although
the past is no accurate guide to the future, the author is
unequivocal that having independent financial goals and a plan to
reach them is in every woman's interest. A clear and consistent
message throughout is that women who think they haven't enough
money to save and to invest are those who most need to. Short case
studies bring these points to life, using vignettes of women
spanning a wide range of ages and life situations. These, together
with the statistics she quotes on the reality of retirement for
many women in New Zealand, would have brought me out in a cold
sweat if I didn't already have some plans running!
I'll end with one of a number of delightful quotations about
money that Sutherland has scattered through the book. This Yiddish
proverb made me laugh, so it must contain a large grain of
truth…
With money in your pocket, you are wise,
And you are handsome, and you sing well, too.
Comments and Recommendations
If you've read this book, what were your thoughts? Do you have
recommendations for other books on personal financial advice that
you can pass on? Please let us know via feedback@professionelle.co.nz.
The book is available via Longacre.
Sheryl Sutherland's website is at mailto:feedback@professionelle.co.nz
© Professionelle Ltd 2007