Ten Years of Our Women’s Wealth Counsel: Empowering Women to Craft a Unique Financial Path
This year marks the 30th anniversary of Truepoint Wealth Counsel’s founding, as well as another important milestone—the 10th anniversary of our Women’s Wealth Counsel (WWC). We started the WWC out of an acknowledgment that women had been underserved by the financial planning community and that they had specific interests, goals, and perspectives that required a different approach. Over the past ten years, we’ve organized a series of programs and events that bring together our female clients, community leaders, and team members. We were looking forward to celebrating our notable anniversary with some exciting in-person events, but alas the year had other plans.
Despite these obstacles, we managed to find a few silver linings. In October, we had the good fortune of hosting Jean Chatzky, the celebrated personal finance columnist and editor of NBC Today for the past 25 years.
Over the course of the webinar, Jean shared numerous insights from her research, as well as actionable advice, with our audience. In particular, she focused on what drives women’s financial decisions and the steps they can take to better control their destiny.
Jean encouraged our audience to:
Understand that women tend to be motivated by safety, security, stability, and savings
Compared to men, they are more likely to worry that they will outlive their savings. In fact, a significant number of women fear this possibility more than they fear death itself! As a result, women often approach financial decisions with different values and different goals than men. At the same time, women are amassing more wealth, more quickly, than at any point in history, and they are more likely to be making critical financial decisions for themselves than they were a few decades ago. For these reasons, it’s important for women to seek financial counsel, but they also need to recognize that “conventional” wisdom was not crafted with them in mind.
Articulate your “money story”
To understand what values you bring to financial decisions, Jean suggests that you identify your “money stories” by considering the following questions:
- How did your parents approach money?
- What feelings emerged when your parents discussed the family budget or important financial decisions?
- Reflect also on how you understand the purpose of money. Is it an end of itself, a source of security, or simply the tool to achieve the life you desire?
- Do some sources of money belong exclusively to you, or do you—like many women—view your wealth as a shared resource that should benefit a larger group, like your partner, your children, or your community?
Prioritize what you can control
Creating a purposeful financial life doesn’t have to be overwhelming. Focus especially on your savings, asset allocation, and risk. Set up an automated investing plan and maintain a diversified portfolio. Be willing to take on risk and approach investing as a regular habit, not an afterthought. Don’t let your desire for security get in the way of investing. On average, women hold 71% of their wealth in cash. Keeping that much cash carries a hidden cost—missing out on decades of investment returns, which add up over time. On a positive note, women tend to be more disciplined and patient investors. Men trade 35% more frequently than women do. It’s good that you’re not approaching markets like a day trader, but don’t be so averse to investing that you’re stuffing your wealth into your mattress. Maximize your savings and take advantage of the substantial benefits of disciplined, long-term investing.
Chart your own path and focus on your goals
There are time-tested, data-driven strategies for saving and investing your money. But when it comes to spending, there’s no one “right way.” Jean pointed out that women often view their spending habits from a moral perspective—praising themselves when they’re “good” or criticizing themselves for that indulgent impulse purchase. Rather than getting stuck in cycles of spending and shaming, take a more mindful, purpose-driven approach. Jean encourages women to get specific about how they want to use their money—and then let go of the guilt. Go back to your “money stories” to gain clarity about your core beliefs about saving, investing, and spending. Be on the lookout for misperceptions, like the notion that buying nice things simply because you enjoy them is “bad” or that you’re not good at numbers so you can’t make investment decisions. Spend your money so that it serves your specific purposes and makes you happy and fulfilled. Your relationship with money should empower you and support you.
What does 2021 bring for the Women’s Wealth Counsel? Well, as of this writing, we aren’t sure when we’ll be able to host in-person events again, but we will continue holding virtual events. On a personal note, I am excited to step into the role of Chair of the WWC, officially taking the baton from Chris Carleton who has led our group for the past three years. Chris, in turn, assumed leadership from our founder, Liz Niehaus. I’m pleased to say that both of these colleagues, whom I consider dear friends, continue to guide the efforts of the WWC.
One of Jean’s final messages emphasized the need for women to lift each other up. I’m confident that with our WWC, we can continue to do this for all the women we work with as we have for the past ten years.