|
By: Tony Wanless
Smart Money
The Province, October 10, 2000
A long time ago, in the plays far far away --
almost beyond hope -- I interviewed a couple who
illustrated classic gender differences regarding
money.
She was conservative, cautious, almost obsequious.
But, underneath, much the shrewder and clearheaded
of the two. He was full of knowledge, ideas and
plans on much too emotional and egotistical about
money.
Theirs was not an uncommon situation. However,
there are many forces in society that would like
us to believe men and women are the same.
The forces are wrong. Men and women are not the
same, especially when it comes to money. But large
segments of the money world still think money
advice should be generic. It isn't, and therefore
generic usually means middle-aged men.
But, as Vancouver fee-only money manager Adrian
Mastracci of KCM Wealth Management
points out, there's a big difference between men
and women regarding money needs.
Simply, women need more money than men, and not
because they like nice clothes and overstuffed
furniture more. Here are the reasons I believe
exist:
Longevity
Saving and investing is all about amassing enough
money to last year through the final years of
your life. And women live longer than men, an
average of about five or six years. Therefore
it's logical that they need more money to last
them through those extra years.
A 47-year-old woman who wants to retire at 60
with an annual income of $75,000 in today's dollars
needs to accumulate about 2.2 million; a man with
the same wish needs about $200,000 less.
Different Money Uses
Women and men have different expectations of the
money. A man may want a certain amount to do a,
be, or c -- for example, buy a big fancy truck.
A woman is more likely to want it to do x, y,
or z -- for example, travel someplace exotic.
This isn't a judgment on the goal, just a reminder
that each requires a different saving and spending
mindset.
Different Obligations
Women, more than men, are affected financially
by life events such as marriage, children, workplace
earnings and divorce. They have shorter working
careers and therefore less opportunity to earn
and save money. Women also are more likely to
be the ones taking care of children and aging
parents, in the process taking on additional financial
burdens.
Differing Saving Styles
Women tend to be more conservative investors,
investing less in higher-risk, higher-return equities
than men do. This means they don't score as big
and make as much money, thereby introducing additional
constraints on building the big stash they need
to fund and longer life. However, it also means
they have less chance of blowing their brains
out on some stupid, ego investment.
|
