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Should Women Invest Differently Than Men?

Finance

Women, on average, live five years longer than men. They make, on average, 21 percent less than their male counterparts, they take more “career breaks" than men do, and their salaries peak much earlier — at age 40 versus 55.


When you take these factors, and others, into consideration, a woman will retire with substantially less than her male equivalent even though she's more likely to live longer. It's a no brainer — the short answer to “should women invest differently than men?" is a resounding, “Yes!"

The Status Quo

“We often read about the gender pay gap that affects women; much less well-known is the gender investing gap," said Sallie Krawcheck, the co-founder and CEO for Ellevest, an investing firm that caters specifically to females. “Investing less than men can cost some women just as much as the pay gap over their lives. While most big investing firms have 'women and investing' programs, most of them have missed the mark. In my opinion, it's because they all tried to market to women, not to serve women."

Currently, 86 percent of investment advisors are men, which translates into a clear lack of the female perspective in a field that affects the sexes equally. Krawcheck founded Ellevest to fill a clear need in the investing market, and the firm has gone back to the very basics to carefully examine, question, and alter the status quo. Along the way, they've discovered that women don't care about outperforming the market, which is the traditional investing goal. Instead, they care very deeply about planning for their goals and investing to reach them.

Susan Conrad, the chief client experience officer and an advisor at Plancorp, has worked in the investment space for 25 years and is particularly knowledgeable about goals-based, purpose-built investing. She agrees with Krawcheck regarding a woman's investment goals versus a man's.

“Women want to feel secure, to know that they are not going to outlive their money. We often set family related goals, such as paying for children's college or assisting with a down payment for their first home and leaving a legacy for the next generation. Men, in contrast, are often focused on investment performance and trying to hit a number that they think reflects success," she said.

Neither is an inherently wrong approach, but Conrad added that “as advisors, we should address the information needed by our clients. I think it's imperative for an investment strategy to be based upon a financial plan that includes the personalized goals and dreams of each client."

Sallie Krawcheck. Photo courtesy of Girlboss

Changing the Investing Tide

A woman outliving her retirement fund because an investment manager assumed a man's lifespan, or didn't account for other female-driven variables, can be catastrophic. And the fact that women are investing less than men, on average, is a sign that the industry hasn't been doing a great job serving the female market. Clearly, real change in the investment world is needed, and we're on the cusp of a tidal shift thanks to female-driven companies like Ellevest, and advisors like Conrad.

In addition to taking into account obvious changes (such as longer life spans, pay disparity, and salary peaks), subtle findings are being accounted for.

“[For example], women won't invest in what they don't understand, while men will. Women are not more risk averse — as so many believe — but are more 'risk aware.' That means they want to understand the risks they are taking, and once they do, we have found that they are willing to take them," said Krawcheck.

“We built a proprietary investing algorithm that helps women choose their goals, make trade-offs among their goals, and put together an investing plan to reach their goals. If the client falls off track, we provide her with personalized tips for getting back on track."

Conrad added, “Over the next decade the largest wealth transfer in American finance history will occur. It will affect women, their children and millennials more profoundly than any other demographic.

Add to that the fact that 70 percent of buying decisions are made by women, and you can see why it's so important for advisors to understand women and address their concerns."

3 Min Read
Health

7 Must-have Tips to Keep You Healthy and Fit for the Unpredictable COVID Future

With a lack of certainty surrounding the future, being and feeling healthy may help bring the security that you need during these unpredictable times.

When it comes to your health, there is a direct relationship between nutrition and physical activity that play an enormous part in physical, mental, and social well-being. As COVID-19 continues to impact almost every aspect of our lives, the uncertainty of the future may seem looming. Sometimes improvisation is necessary, and understanding how to stay healthy and fit can significantly help you manage your well-being during these times.

Tip 1: Communicate with your current wellness providers and set a plan

Gyms, group fitness studios, trainers, and professionals can help you to lay out a plan that will either keep you on track through all of the changes and restrictions or help you to get back on the ball so that all of your health objectives are met.

Most facilities and providers are setting plans to provide for their clients and customers to accommodate the unpredictable future. The key to remaining consistent is to have solid plans in place. This means setting a plan A, plan B, and perhaps even a plan C. An enormous amount is on the table for this coming fall and winter; if your gym closes again, what is your plan? If outdoor exercising is not an option due to the weather, what is your plan? Leaving things to chance will significantly increase your chances of falling off of your regimen and will make consistency a big problem.

The key to remaining consistent is to have solid plans in place. This means setting a plan A, plan B, and perhaps even a plan C.

Tip 2: Stay active for both mental and physical health benefits

The rise of stress and anxiety as a result of the uncertainty around COVID-19 has affected everyone in some way. Staying active by exercising helps alleviate stress by releasing chemicals like serotonin and endorphins in your brain. In turn, these released chemicals can help improve your mood and even reduce risk of depression and cognitive decline. Additionally, physical activity can help boost your immune system and provide long term health benefits.

With the new work-from-home norm, it can be easy to bypass how much time you are spending sedentary. Be aware of your sitting time and balance it with activity. Struggling to find ways to stay active? Start simple with activities like going for a walk outside, doing a few reps in exchange for extra Netflix time, or even setting an alarm to move during your workday.

Tip 3: Start slow and strong

If you, like many others during the pandemic shift, have taken some time off of your normal fitness routine, don't push yourself to dive in head first, as this may lead to burnout, injury, and soreness. Plan to start at 50 percent of the volume and intensity of prior workouts when you return to the gym. Inactivity eats away at muscle mass, so rather than focusing on cardio, head to the weights or resistance bands and work on rebuilding your strength.

Be aware of your sitting time and balance it with activity.

Tip 4: If your gym is open, prepare to sanitize

In a study published earlier this year, researchers found drug-resistant bacteria, the flu virus, and other pathogens on about 25 percent of the surfaces they tested in multiple athletic training facilities. Even with heightened gym cleaning procedures in place for many facilities, if you are returning to the gym, ensuring that you disinfect any surfaces before and after using them is key.

When spraying disinfectant, wait a few minutes to kill the germs before wiping down the equipment. Also, don't forget to wash your hands frequently. In an enclosed space where many people are breathing heavier than usual, this can allow for a possible increase in virus droplets, so make sure to wear a mask and practice social distancing. Staying in the know and preparing for new gym policies will make it easy to return to these types of facilities as protocols and mutual respect can be agreed upon.

Tip 5: Have a good routine that extends outside of just your fitness

From work to working out, many routines have faltered during the COVID pandemic. If getting back into the routine seems daunting, investing in a new exercise machine, trainer, or small gadget can help to motivate you. Whether it's a larger investment such as a Peloton, a smaller device such as a Fitbit, or simply a great trainer, something new and fresh is always a great stimulus and motivator.

Make sure that when you do wake up well-rested, you are getting out of your pajamas and starting your day with a morning routine.

Just because you are working from home with a computer available 24/7 doesn't mean you have to sacrifice your entire day to work. Setting work hours, just as you would in the office, can help you to stay focused and productive.

A good night's sleep is also integral to obtaining and maintaining a healthy and effective routine. Adults need seven or more hours of sleep per night for their best health and wellbeing, so prioritizing your sleep schedule can drastically improve your day and is an important factor to staying healthy. Make sure that when you do wake up well-rested, you are getting out of your pajamas and starting your day with a morning routine. This can help the rest of your day feel normal while the uncertainty of working from home continues.

Tip 6: Focus on food and nutrition

In addition to having a well-rounded daily routine, eating at scheduled times throughout the day can help decrease poor food choices and unhealthy cravings. Understanding the nutrients that your body needs to stay healthy can help you stay more alert, but they do vary from person to person. If you are unsure of your suggested nutritional intake, check out a nutrition calculator.

If you are someone that prefers smaller meals and more snacks throughout the day, make sure you have plenty of healthy options, like fruits, vegetables and lean proteins available (an apple a day keeps the hospital away). While you may spend most of your time from home, meal prepping and planning can make your day flow easier without having to take a break to make an entire meal in the middle of your work day. Most importantly, stay hydrated by drinking plenty of water.

Tip 7: Don't forget about your mental health

While focusing on daily habits and routines to improve your physical health is important, it is also a great time to turn inward and check in with yourself. Perhaps your anxiety has increased and it's impacting your work or day-to-day life. Determining the cause and taking proactive steps toward mitigating these occurrences are important.

For example, with the increase in handwashing, this can also be a great time to practice mini meditation sessions by focusing on taking deep breaths. This can reduce anxiety and even lower your blood pressure. Keeping a journal and writing out your daily thoughts or worries can also help manage stress during unpredictable times, too.

While the future of COVI9-19 and our lives may be unpredictable, you can manage your personal uncertainties by focusing on improving the lifestyle factors you can control—from staying active to having a routine and focusing on your mental health—to make sure that you emerge from this pandemic as your same old self or maybe even better.