Sex or Money: Which Would You Choose?

By Candace Bahr, CEA, CDFA and Ginita Wall, CPA, CFP,

An excerpt from the seminar "Investing in the Future: What Every Woman Needs to Know" by Gail Buckner, Senior Vice President of Putnam Mutual Funds.

Men think more about sex than money. Women think more about money than sex.

Those were the surprising results found in a Money Magazine survey.

Why do men think more about sex than money? They can afford to. Women can't.

They worry that they won't be financially independent. Because they worry about risk, women tend to invest too much in highly conservative investments such as certificates of deposit, savings accounts and bonds. They instinctively favor those investments over riskier stock investments because they know how they work, and they are afraid to take risks that may cost them money.

But risk isn't their biggest problem - inflation is. If it takes $50,000 a year to live today, it will take $70,000 in ten years, and $100,000 in twenty- five years. Women live longer than men do, so they'll experience even higher living expenses as the years roll on. People age 85 and over are the fastest growing sector of the economy, and women make up the majority of those in that age group.

Because they live longer, women will need far greater retirement income than men, yet on average they receive 30% less in social security benefits. Their lower wages and time off from work to raise kids reduce their benefits. With lower earnings, they have less disposable income, and so they start saving for retirement later. And often they work at jobs that don't provide large retirement benefits, or they don't take advantage of retirement plans offered to them.

The best way to become financially independent is to save at least 10% of what you make for your future. Pay down debt, then begin investing money in a retirement plan, allocating the investment to stocks, not guaranteed income investments. Periodically, sit down and take stock of your progress. As your investments grow, so will your self-confidence and satisfaction with your financial well-being.

How can you avoid making mistakes when you are investing? Read more...

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