Women's Investing: Vive La Difference

Women tend to build up inadequate nest eggs--and that's why they need advice tailored to their needs

I had tossed out a half-dozen press releases, deleted as many e-mail messages, and ignored several books that were sent to me before I took notice. The subject of women and money seemed to me to be a marketing ploy by brokerage firms and mutual funds, a superfluous segmentation of the investing market. Aren't investing goals and strategies--determining your financial goals, identifying your risk tolerance, and creating an asset allocation plan--the same regardless of gender?

The answer is emphatically "no." Women have different investing and financial attitudes and needs (table). For the most part, they abdicate investing responsibilities to their husbands and take less financial risk than men when they do invest. Their needs also differ. A woman earns less than a man for the same job, takes more time off work to raise a family, and lives seven years longer, on average.

These critical differences mean that women tend to build inadequate nest eggs. And that is why I am doing this new column. In it, I will cover strategies women need so that they can address their unique situation now and plan for retirement. My goal, in part, is to promote financial independence for women. It's necessary. Some 90% of all women, either through divorce, widowhood, or because they have never married, will be in charge of their own finances at some point in their lives.

WAKE-UP CALL. The movement to bring greater financial independence to women has been building for some time, and Oppenheimer Funds CEO Bridget Macaskill is one of its guiding lights. Back in 1992, she commissioned a survey on the topic and found, among other things, that women's investment knowledge lagged men's. The study helped to galvanize others on Wall Street, and their efforts finally got my attention. That, however, is just the beginning. It's not enough to be aware of the differences. What's needed is action. Says Macaskill: "Let's give women the positive reinforcement that they can invest and they can do it well."

In the broadest sense, professional and nonprofessional women from their teens through their 80s need to learn about financial strategies that apply to their age group. This will be a frequent topic in future columns. For example, how does a recent widow make sure she gets all of her late husband's retirement and insurance benefits? Aside from age-related strategies, I will deal with issues posed by lifestyles, demographics, and careers. How can women entrepreneurs tap into venture-capital funds, a domain typically dominated by men? Then there's the fact that the number of women heading households now nearly equals the number of men. That raises questions about women's strategies for property, life, and disability insurance.

As increasing numbers of women gain investing experience, they can teach others how they achieved their success. To help women tap into this intelligence, I plan to run chat sessions with savvy female investors on Business Week Online. That will be only one of the online components of this column. We will also feature video, interviews, and expanded stories.

But this column cannot succeed without your input. I want and need to hear from you. E-mail your comments, criticisms, and suggestions to hers@businessweek.com.

One last important note. Although this column is about women and money, it is not for women only. It is also for men who wish to help women achieve financial independence. Male readers should pass the column along to their wives, mothers, sisters, girlfriends, or daughters. They, like me, may initially ignore the call to arms. Sooner or later, however, they will have to pay attention.

Questions? Comments? E-mail hers@businessweek.com or fax (212) 512-2538

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