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Kathy Healy
So I’m here today, with some people from my team.
Eric Murray, financial advisor by day and help as needed. Yana Lunger is my, Office manager. And my daughter Meg introduced herself. I’m glad that she’s here for- She’s my stylist.
As women in finance, we’re really part of a long continuum of women who have faced the adversity. Not being able to open your own bank account, not being able to borrow money without a man or your husband cosigning for you. And this sounds like ancient history, but it’s not.
It was 1974 when women could finally borrow money on their own without a man cosigning, and they’ve been barred in the past from managing their own money, denied access to credit, barred from signing contracts. And this is all in the 20th century.
So now we’re in the 21st century. The laws are here in place to protect us, but the culture is just now kind of catching up. I think 64% of professional women have felt disrespected by people in the financial industry. So we’ve got to do better.
Part of the problem. There is that. A lot of women aren’t going into the financial and accounting industries at still less. A Lesser percentage for my particular career. I’m a CFP. There are less than 30% of financial advisors that are CFP. If you’re a CFA, which is more on the portfolio side, it’s less than 25% of women getting that designation.
Some of the things that come to mind for me that are pitfalls. For women in particular, are sort of checking out of the investment process, especially if they’re married.
A lot of times I’ll see husbands come in and they’ll want to take the lead on the finance side, especially investments. I really want couples to come in together. I think that’s very important. But it’s so important for women not to check out on that part of their life.
Another thing might be that you just don’t get life insurance. Are you? You know, there’s small things that you might forgo, but a big one is your referral link.
So, If you are working for a big company that has a 401K plan. A lot fewer women are engaging in participating in their 401K plan than men. Another big problem there.
And it starts at the beginning. And this is– it’s just the ripple effect is going to carry on through my whole presentation.
And so women are still about 2.5% behind men in the same profession. But that little 2.5% difference has a cascading effect. It’s going to follow you wherever you go.
So if you and a corresponding male employee have the same job and you have, you know, this little discrepancy, one thing that happens is that you don’t have as much disposable income, and so you don’t have as much money to save. So more of your money is going to your necessities, and you have less money to save.
And then here’s the big kicker. If your company is offering you a match on your 401K and so you’re like, well, okay, they’ll give they’ll match up to 6%, 50% for up to 6%. So I’m going to put 6% in my 401K. So I’ll get that match. Great. Well if you’re making a little bit less than the man. That started when you do, and he’s doing 6% and you’re giving 6%, you’re putting less money in your 401K and you’re getting less of a match from your company.
So this is if you just keep thinking about the ripple effect. I hope that this will inspire you to pay attention to little things that can make a big difference. Little now, then a big difference later.
I love it when I get people in that are from professions where, well, I’ll just give it, a little anecdote about an attorney.
So there’s a lot of paperwork when you’re opening accounts, when you’re opening investment accounts. And there are a lot of disclosures, and there are lots of pages that you have to sign and date. And so the first time I had an attorney client come in, we’re signing paperwork. And I’m like, don’t you want to read this? Because I thought that, you know, attorneys would read everything.
And he’s like, “no, are you going to change the– you can change the form.” Like, well, no. And he signed by and signed.
But the people that will want to read this is just like an aside.
Nurses are very detail-oriented in general. They are going to want to read everything. In the contract. And Amy, I don’t know if you’re shaking your head in agreement with this. The other big one is engineers. Not only do they want to read every word in the contract, they also want to do their own spreadsheets and check to see if yours are right.
So, the disclosures are important that they protect the wealth manager more than the client. I mean, it’s supposed to. Inform you, but you should know what you’re signing.
I guess I’ll say that caveat, but most people just sign, sign, sign.
In 1920 Women got the right to vote. 1963 The Equal Pay Act. In 1974 is the Equal Credit Opportunity Act. And that’s the one Melissa talked about.
And that’s the one where you can go in and open your own bank account. You can borrow money without having a man cosign.
And then 1988 Women Business Ownership Act expanded. Opportunities for women entrepreneurs and business leaders and women’s earning power is growing. So millennial women are almost twice as likely as women in the Baby boomer generation to earn the same as their partners.
To me, these are really interesting. You may have heard heard these before, but I just find them fascinating.
While married men still on average, sit at the top of the earnings ladder, more than a third of wives in the U.S. earn more money than their husbands. This is up from 18% in the 1980s, and women owned 39% of all businesses in the U.S..
And this is that 64% of women breadwinners say that the financial services industry has been patronizing to women.
Okay, so here’s Jeannette Rankin, the first woman elected to the House of Representatives in 1916. What’s interesting to me about this is this is before women had the right to vote, which was in 1920. I guess the men elected her and she was quoted as saying, I am the first woman elected queen, but I won’t be the last.
And she’s right, but we’re still underserved in that area. But in education. We’re rocking it.
So this is the people in pursuit of higher education. Now, 58% of people earning their bachelor’s degrees are women. 62% of people earning their masters are women. 55% of earning their doctoral degrees are women. This is a big change.
But with all the good news, why do we still have the discrepancies and what are the problems?
So these are the big ones. So women are expected to last– If you look at that as we’re all we’re all you’re expected to last.
The actuaries have figured it all out. And women live about five years longer than men on average. But the other thing that digs into this statistic is that on average men are three years older than their wives. So if you add the five years longer that you’re going to live in, the three years older that your husband is, if you’re married it’s more than likely that the wife is going to be the one that’s left.
And in fact, this statistic is staggering. 80% of men are married when they pass away. 80% of women are alone when they pass away.
So that tells you right now, ladies if you’re if you’re married or not, you really need to be thinking about retirement and and your finances and don’t take a backseat to it. Women are a lot more likely to stay home to take care of children, or to stay home, or take career breaks to take care of sick relatives. That’s just something. It’s not a bad thing. It’s a great thing. You’re serving your family. You’re helping everybody when you do that. But you need to be conscious of yourself and your future too.
And then this one kills me. Less confidence in financial matters and this goes back to Ida Bru. It’s not the lack of ability it’s the lack of opportunity a lot of times. And for women, it’s not their ability or what they know or how well they could do. It’s their confidence level. And so we just need to be cognizant of that.
Actuaries once again, they know all about this. Life insurance companies know all about this based on women having a longer life expectancy and women having shorter one. Women do better in a nursing home or assisted living than men do.
Long Term Care insurance is more expensive for women than it is for men, while life insurance is more expensive for men than it is for women. But for women, I mean, seriously, the health care costs are higher for us. They’re going to be.
And so that’s something else that you need to think about and plan for. This statistic. From nine from 2023. says spending about $150,000 more on health care in retirement than men.
Here’s the gender pay gap. Still $0.82 for every dollar and this could result in a gap of $1.6 Million over your career.
One thing I didn’t mention in the cascading effect, but I talked about how being disadvantaged on the salary side eats into everything else because you don’t have as much disposable income, you’re not contributing as much to your 401K.
I’m not sure if I mentioned the part about Social Security because that is also based on your income. So any– If you’re making less money or you’re taking career breaks, that’s going to hit you on your Social Security income in the future.
I promise there’s some good news coming up.
I try to start with the good news, and now I’m giving some of the bad news. But there there’s some good news, too. Oh, well, the one thing I want to mention was that my client, Sherry, she’s my first client. She’s 70. That has equal Social Security benefit to her husband. She’s worked her whole career, and they’re both going to be getting the max that you can from Social Security. She’s my first one.
But they’re going to be a lot more following women in their 60s and women in their 50s that are going to have that. But most right now of my clients have, you know, the spousal benefit from Social Security. But it’s a great if you can have two Social Security incomes that are equal.
It’s a big help because most people now don’t have a pension. They really are depending on Social. Security plus what they’ve saved for retirement to pay for their living expenses. And retirement.
So here are some of the takeaways. I’ve got tips and takeaways throughout this. So these aren’t going to be the only ones.
But maximize your employer sponsored plan like your 401K and take advantage. Of any catch up contributions that you can make and start as early as possible.
A woman who starts at age 25 could have twice as much as someone who starts at 35 due to compounding. And shoot for 15% of your income toward saving toward retirement.
Funding early can help you if you do have the career breaks even if you stop and start. Just make sure that you’re taking advantage of your 401K.
So we are the ones. We’re the caregivers. We are the ones that the baby wants when they have a fever. We’re the ones that are doing that more not. To minimize what men do. I’m sure they helped in their own way.
Just for the issue, I know, I know. It’s nothing personal, I know, but you’ve already proved that you’re more than an I.T. guy.
Financial literacy and education. This is super interesting to me.
Women are more likely to invest conservatively than men. And that goes back to the confidence thing.
And 43% of women report holding more than half of their portfolios in cash, so that could be a real detriment to you if you’re, you know, there’s two ends of the spectrum. You could be too risky. You could be not taking enough risk to keep up with inflation and to grow your retirement to the point that it needs to be.
That’s all the theoretical and the statistics and stuff. Now that’s the real stuff.
What should you be doing?
So one thing people want to know is how do I how do I know how risky or how conservatively I should be invested in my 401K or any of my investments? And so we look at it as a scale. From a level 1 to 5. Level one would be in CDs in the bank or maybe Treasury Bills, something that you’re not going to lose money and five is aggressive growth is as far as we go is 100% stocks There are other more risky. Things you can do. We don’t do that. But everybody’s somewhere on the spectrum.
And a lot of times you’ll hear people say, well, it depends on how old you are. Well, it could you know, it depends on how much money you have. It could it depends on how much income you have. It really is all of these things.
Plus I would say also the sleep at night factor, you need to think about where you are on the spectrum. I really liked it when I would take the kids to Children’s Hospital. I loved it when I had to take the kids to the hospital now but you know, you go in the emergency room. This is the first place I saw it where they had like a little smiley face to a frowny face. It’s like, how are you feeling? Because kids don’t know how they’re feeling. But if you show them the graph, you know they can pinpoint where they are.
And so sometimes I like to show clients a graph. And if I’ve got 1 to 5, they’ll show they’ll point right between 3 and 4 I’m like, no, do I need I need to have a 100 point scale for people to like zero in. But this is a hard thing for people to know how they want to be invested and how much risk they should take.
You also need to build your own financial team, so not everybody has expertise in every area.
So if you think about your big financial life, they’re really six areas. One is cash flow. That’s your money coming in and out, your budget. Retirement planning, investment management. That’s your portfolio and how risky. Are conservative it. Is tax planning, estate planning, risk management. That’s your insurance. So you need experts in all those areas.
The other day I was at the Chamber of Commerce at an event, and I met somebody new for the first time. I said what I did, and she said, well, I’m 53. What’s your best advice for somebody my age? And I said, well, my best advice for anybody at any age is to know what you’re spending. People have no idea. And do I mean that you need to have a spreadsheet? Well, that’d be awesome but and in fact, this group. Yeah. And it’s like this group probably does. Most people don’t. But you can figure it out, see what’s left over at the end of the month if you’re going into the hole and you’re having to borrow money or you’re having to take money out of savings then you’re spending more than you’re making.
So– but knowing how much you’re spending is so important, and if you can figure out what your living expense number is and then add in other things like, Your mortgage or paying for kids’ College or vacations. I call it a kernel. It’s the kernel of expenses that are going to follow you throughout your life.
So some of these expenses are going to begin to fall away as you get older. One day your kids will be off the parent payroll. One day, they’ll you’ll be through paying for their college. You know, one day you will have paid off your mortgage. So those things are when I’m doing financial planning, I keep those in a separate bucket, because we know. That you are going to have some kind of, consistent living expenses that are going to follow you throughout.
So when you figure out that number, that’s my best advice to anybody know how much you’re spending? I think that all the CPAs Darcy’s nodding the count as well.
This is all everybody in here agrees with me, so that’s good.
I want to tell her. She and her husband were looking for a financial advisor. And she wanted to have an appointment with me. But in the meantime, her husband picked somebody else before, I never even got to meet with them.
But then one day, I got a call from her and she said, oh my– my neighbor really needs your help. I’m like, I can help. The neighbor was probably about 42-43 years old, married, had a teenage daughter who was in private school. They’re living in a big house in North Fulton, two fancy cars in the garage, a BMW and a Range Rover. She woke up one morning and her husband had died during the night. So then she found out that he hadn’t been doing that, filing the tax returns. They had a huge tax debt plus tons of penalties the two great cars were like 100% leveraged. That two mortgages on the house, and the house was worth less than what she owed on it. That’s real bad.
On the plus side, she had a great job. She was able to continue with that. And so what we did just made a list of divided. If you have your notepad, I think about that divide it in today to do and tomorrow.
So we filled in what’s today–today was looking really bad that tomorrow she desperately wanted to keep her kid in private school she didn’t want, with her father dying, she didn’t want her to have that additional disruption. So that was almost her number one. She wanted to stay in the house till her daughter went on to college. Her neighbor, thankfully, the one that called me and she did the hard work. she said, girl, you have got to get rid of those cars and you need to buy a used car that you can afford. And so that was like number one.
But we went through all the to do’s that had to occur for her to be able to turn her situation around. And she did. I mean, she did go to the school and asked for financial aid, kept her kid in it. She also got life insurance proceeds. I forgot to mention that 500,000 to her and 500,000 to her minor child. So don’t do that.
Don’t leave life insurance to the minor kids. That was really all she had on the plus side, and she’s done great.
Her daughter now lives in New York and has done a great job working for a big consulting firm. She’s still in the house. I don’t know what she’s driving, but she’s, you know, you can turn around even a terrible situation. But sometimes you need a little hand-holding, handling finances as a couple.
That was my lead into this. It’s important to talk about money together schedule a regular meeting to talk about it. Recommend that you do something fun afterwards. You know, some one client couple I had, they met every week. Now, that’s a little much for me.
I don’t know about y’all, but I don’t want to talk about my financial situation with my husband once a week, but regularly and no surprises.
Have you heard this term? Financial infidelity? I started hearing a lot about it last year. It can be something like you squirrel away a separate account that you don’t tell your spouse about. Some of the worst cases are where you’ve run up big credit card debt that your spouse knows nothing about. The very worst case was the husband who said that he was going to be, pulling his salary fund to their retirement if she would pay all the living expenses. And they did that.
Well, he never put a dime in retirement. He had a gambling problem. So these are, you know, not to scare anybody away, not have any financial secrets. Talk about your goals and then what do you do if you have different goals? Those are things that you need to be talking about.
So that’s my best advice for handling finances as a couple is to make sure you’re talking about it. And this all goes back to who makes more money. For women their income goes down 41% after divorce where men are hit, it’s like 23%. And that’s mainly because of the unequal pay automate savings and investments. So that’s going in without you having to even do anything or remember it. Have a plan to increase your Annual Contributions to your 401Ks when you get a raise. Have an emergency fund 3 to 6 months of expenses saved in case of emergency.
I mean, you don’t want to be the one that pulls into the Costco with your threadbare tires and not able to buy new tires.
So have a 3 to 6 month cushion, pay off high interest debt. Consider your own need for long term care insurance. Don’t have too much debt. Have proper life and health insurance giving.
So this is an interesting statistic to me. Approximately 70% of adults in the US donate to charities it’s higher among women, so 73% of women donate to charities versus 64% of men.
Freeze your credit if you need to have instructions on how to do that, let me know. I’ll give them to you know you’re spending.
Retitle your assets if you get divorced. Also change your beneficiaries if you get divorced. And you need a new will if you get divorced.
So I’m going to wrap up with those tips. But, here’s Beyonce, one of the wealthiest women in the US.
Together, Beyonce and Taylor Swift have way more than $2 billion and this is her quote.
We need to reshape our perception of how we view ourselves. We have to step up as women and take the lead.
Yeah.