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In my family, I’m the one who usually manages our budget, bills, and investment accounts. I admit; I’m a bit of a money nerd, but I’m sure you wouldn’t expect anything less from someone who has been a financial writer for almost seven years.
My husband actually loves following the market and discussing our goals, investments, and savings with me. However, because of his intense job as a physician in residency, I find that I’ve had to take the lead when it comes to deciding things like which index funds to invest in, whether or not to pay down debt or invest in our IRAs, and more.
However, when it comes to being a woman making 99% of the financial decisions in my family, I’m definitely in the minority. Not many women are the financial leaders in their households, and many lack the confidence to take charge of investments, even though Fidelity’s recent Money Fit Women study showed that 83% of women want to be more involved in their finances within the next year.
The truth is, the skills and natural abilities that women actually have make them excellent investors, and I fully believe that women are more than capable of learning about investing, understanding the lingo, and making amazing financial decisions for their families.
To give more insight, below are the four main reasons why you should let your wife do the investing from now on:
1. Women Are Caretakers and Nurturers
Many people forget that as investors, we are nurturing our future nest egg. Your investments in your future should not be something that should be handled aggressively or erratically. That’s why women are well suited to being excellent investors.
As Chris Havaris, a CPA and CFP®, explains, “Women are ideally suited to handle the family finance and investing decisions. I don’t think it’s so much that women are better at it, as that the traditionally female qualities of caretaking, nurturing, creativity, and patience lend themselves to it beautifully.”
Havaris is right; patience is important. In fact, according to research by the University of California, Davis, “the average turnover rate of common stocks for men is nearly one and a half times that for women. While both men and women reduce their net returns through trading, men do so by 0.94 percentage points more a year than do women.”
To put it another way, women are more patient with their investments and more likely to let their investments sit and grow. Men are more likely to trade their investments more often, which can lead to lower returns overall.
2. Women Are Risk-Averse
As an entrepreneur, I believe it’s important to take calculated risks with my business from time to time. However, when it comes to long term investments, I tend to be like many millennial women who, according to research by BlackRock, are risk averse when it comes to investing. In fact, only 33% of millennial women are willing to take on higher risks for higher returns compared to 61% of millennial men.
Janet Tyler Johnson, a CFP®, sees this with her own clients as well. She says that women “aren’t as interested as their husbands are in trying to hit home runs with their investments but rather focus on their long term success relative to their goals. Also, they are often willing to give up the potential for higher returns in order to take less risk with their investments.”
One could argue that couples shouldn’t be overly conservative when it comes to investing, especially when they are young. However, what this data shows is that women could provide a nice balance to men when it comes to making investment decisions as a couple. Women’s focus on long term goals and success could be an asset to many families when doing financial planning.
After all, it’s easy to lose sight of goals during market fluctuations or recessions, but having a long term approach makes those moments less stressful.
3. Women Take the Time to Research
Women make great investors because they do not make rash decisions. Instead, they spend considerable time researching different options to ensure they make the right choice for their families.
Research by LPL Financial explained that women “are assuming more powerful roles in personal and family investing and decision making.” LPL’s white paper went on to say that women “see their investments as a way to protect and support their families…They may take a long time to do research before they settle on a course of action, and often consult with a pool of experts.”
This tendency is absolutely an asset to any couple and could help couples make wise decisions when it comes to investing their hard earned money.
4. Women Live Longer Than Men
According to the Centers for Disease Control and Prevention, women now have a life expectancy of 81.2 years whereas men have a life expectancy of 76.4 years.
It seems a bit morbid, but this is a prime reason why you should let your wife do the investing. It’s important for women to understand investing and investing decisions so they feel comfortable making them for themselves should something happen to their husbands.
Of course, I’m not arguing that you should hand over the investing reigns to your wife and never look at a net worth spreadsheet ever again. However, I am advocating for women because many marriages don’t have a true partnership when it comes to making investing decisions.
Both partners in a marriage should be decision makers, but if your wife is not as involved as she could be, perhaps some of the tips above will convince you that women’s natural tendencies towards research, patience, and being nurturing can make them an asset when it comes to financial planning.
So, if talking about money and retirement isn’t something you normally do with your wife, give it a shot. You might be surprised at how the process can bring the two of you closer together.
Who makes most of the investing decisions in your marriage?
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