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Bernice Ross
According to Housing.com, 95 percent of the time, women are the key decision makers when it comes to buying a home or renting an apartment. As the Baby Boomer men die off during the next five to eight years, women will have sole control over an astounding $32 trillion dollars of the country’s wealth. Sadly, many women are totally unprepared to handle what’s ahead.
I recently interviewed Dr. Patricia Ross, the founder of Girl Power Finance. According to Ross, the primary challenge women face today is that the options for managing our money are so shortsighted and unpredictable, that many of us don’t know what to do or where to turn. Even though women will have this monetary clout, few know how to wield it effectively.
Ross, an English professor by training, started her business writing books on finance, money management, and retirement.
“I had the big guys basically pat me on the head and say, ‘Don’t worry your pretty little head about modern portfolio theory or how money works,’” she said. “Getting patted on the head really drove me a little nuts. Nobody gets to do that. Nobody likes being patted on the head, marginalized, and put in a corner…[And that’s why] women are saying, ‘You’re fired, baby!’”
To support her point, Ross shared a rather stunning statistic: Once women lose their spouses, 70 percent of them fire their former financial advisors.
The Dirty Little Secret
According to Ross, if women (or men) really were educated about how the fees in their stock portfolios or 401Ks work, they would never have agreed to their terms. When investment managers play the stock market on your behalf, they make money even if you are experiencing massive losses. They don’t want you to understand that they put your money at risk to make steady income for themselves by doing trades on your behalf.
“If you’re in the stock market, you’re gambling. It’s like going to the tables in Las Vegas and saying, ‘I’m going to win a lot or I’m going to lose a lot,’” she said.
Ross recommends that her clients take a balanced approach to money management that includes a portfolio with some degree of risk. The choice really comes down to how much safety you want vs. how much risk you’re willing to tolerate. The less risk you are willing to tolerate, the more conservative your investment strategies should be.
Overcoming ‘Financial Menopause’
Ross shared a story about one of her clients who is a very successful businesswoman with a massive real estate portfolio. Despite her substantial wealth, she was still worried about having enough money for retirement.
Ross describes the “budgetary hot flashes,” “monetary mood swings” and “nightmarish night sweats” of financial uncertainty, as symptoms of what she calls “financial menopause,” the fear of not having enough money, especially as you approach retirement.
This is exactly what her client was experiencing.
“When we start worrying about if we’re going to have enough or not, we go down this path, and it’s not a good path, that gives us wrinkles,” she said. “When I discuss this, everyone laughs, but it’s because it’s true. It’s like we have enough gray hair and wrinkles, we don’t want to see our bank accounts get shriveled up as well.”
Ross recommends that you start by focusing on your talents, your current portfolio and your financial goals. Begin our investment journey by working with what you know, like, and trust. Assess your degree of risk and adjust your investment strategies appropriately.
Your ultimate goal is for your passive income stream to become your primary source of income as quickly as possible.
“We are the money masters of the universe, but we just don’t know it yet. No matter where you are in your financial journey, take what you know and build on that,” she said. “Knowledge is power, so get educated. Evaluate the pluses and minuses. That’s what makes us powerful. That’s what gives us strength.”
Bernice Ross is a nationally syndicated columnist, author, trainer and speaker on real estate topics. She can be reached at bernice@realestatecoach.com.
