In the world of investing, how to invest— how to buy a rental property, how to choose a stock or how to get a good return on your investment—is the same for women as it is for men. Stocks, bonds or real estate, investments don’t care if it’s a man or a woman doing the buying, selling, holding, remodeling or renting. So why is there a need for a book on investing just for women?
The answer is because when it comes to money, men and women are different— historically, psychologically, mentally and emotionally.
These differences are at the heart of the reason why so many women today are in the dark when it comes to money and investing. These differences are what separate the sexes and why my book, Rich Woman: A Book on Investing for Women—Because I Hate Being Told What to Do, is dedicated to women.
I Hate Being Told What to Do
The subtitle for the book comes straight from my heart. My husband, Robert, and some friends of ours were having lunch one afternoon, and the subject of this book came up. Rich Woman was clearly the title. We hadn’t yet decided upon the subtitle. We threw some ideas around the table.
Then Robert turned to me and asked, “Tell me, Why are you so driven to be financially independent? This is not something new for you; you’ve always had this in you. This comes from your core. What is your reason? What is at the heart of this issue for you that you must, come Hell or high water, be able to make it on your own? Tell us what drives you.”
My girlfriend Suzi was sitting next to me. She and I are extremely like-minded. So much so that we looked at one another and almost simultaneously declared, “I just hate being told what to do!” The two of us immediately got on our soapboxes about how much we can’t stand it and went into example after example of times people told us what to do, how we reacted and why we’ll never let someone else dictate our lives.
We women do some ridiculously stupid things in our lives and many of those stupid things revolve around money. I think it’s time we simply get smarter on the subject. Am I saying women are stupid? Absolutely not. Nothing could be further from the truth. I am saying that we do some incredibly foolish things. And most of these silly things are directly related to money.
The bottom line is that many of us sell our souls in the name of money. The real crime is the toll it takes on our self-esteem, our confidence and our self-worth. Yes, my book Rich Woman is about women and investing, but it’s actually about much more than that. It’s about women taking control of their lives. It’s about dignity. It’s about self-respect.
Why Women Must Become Investors
A young journalist approached me recently and said passionately, “We have to make women aware that they have to take charge of their money. They cannot depend on someone else to do that for them!” After talking with her more, I discovered where her passion was coming from. It turns out her 50-year-old mother recently divorced. She was left with basically nothing and had moved in with her daughter. Her daughter was now supporting herself and her mother. This situation alone was a wake-up call for the young journalist, and it shook her up. In looking ahead, she realized that if her steady paycheck stopped, she had a total of about $7,000 to fall back on. She was suddenly propelled into action.
The reasons for becoming investors are very different between the sexes. We know that we lead very different lives than our mothers did, but you may be surprised at just how different. Here are five sound reasons why women need to get into this game called investing.
1. The Statistics
The statistics about women and money are startling. These are U.S. statistics, yet I find that for other countries around the world these statistics are either similar or are trending in the same direction.
In the United States:
• 47 percent of women over the age of 50 are single. (This means they are financially responsible for themselves.)
• Women’s retirement income is less than that of men’s. This is because a woman is away from the work force an average of 14.7 years, compared with 1.6 years for men.
• 50 percent of marriages end in divorce. And who typically ends up with the children? The woman. Now she is solely financially responsible for herself—and her children. And what is the No. 1 subject couples fight about? Money.
• In the first year after her divorce, a woman’s standard of living drops an average of 73 percent.
What are these statistics telling us? They tell us that more and more women, especially as they become older, are not educated or prepared to take care of themselves financially. We’ve spent our lives taking care of our families but have no ability to care for ourselves in this vital way. We are depending upon someone else to do it for us—a husband or par tner, a boss, a family member or the government.
2. Avoiding Dependency
You don’t go into a marriage expecting a divorce. You don’t begin a new job expecting to be laid off. But it happens, and today with more frequency. Too often we may not even realize just how dependent we are until we’re faced with our personal wake-up call. Here is my story. Robert and I have been business partners since one month after our first date. We’ve built several businesses over the years.
All my life I pr ided myself on being independent. From the time I got my first job in high school, I knew that I would not be dependent as long as I could make money. And even though I built this company with Robert from the ground up, the truth slapped me in the face. All of a sudden I realized that if Robert and I were to split up, I would not only lose my marriage but I would lose my business! Because Robert was the figurehead of our company, if he left, then the business would collapse. Without even realizing it I had set myself up to be totally dependent on Robert. I could not believe it! That was my wake-up call. And now I wanted to be sure that whatever decisions I made were decisions that were right for me.
Up to that point I had purchased a few rental properties, but I looked at it as a hobby. Now I saw it as my means to freedom. That’s when the passion kicked in and investing was no longer a hobby to me, it was a mission. There was one huge unexpected benefit I received as I turned into an investor. Once I understood investing and I learned how to make money passively, without working, then I realized for the first time that I no longer needed Robert. What was even more enlightening was that I discovered that I wanted to be with Robert, not out of need but out of want. At that point, our relationship took on a new meaning. We were together simply because we both wanted to be together.
3. No Glass Ceiling
One obstacle for many women in the corporate world is the glass ceiling myth. The glass ceiling professes that, because of our gender, women can only move so far up the corporate ladder.
In the world of investing, the markets don’t care if you’re female or male, black or white, a college grad or a high school dropout. The markets only care about how smart you are with your money. The key is education and experience. The smarter you are with your investment choices, the greater your success as an investor. There are no limits, no ceilings, glass or otherwise, for women in the world of investing.
4. No Limits on Income
Because of the glass ceiling, and because of the still-present wage inequality between men and women, a woman is often limited in the amount of income she can make. Studies show that women, with the same education and experience as their male counterparts, earn about 74 cents for every dollar their male peers earn. In investing, the money you can make is unlimited. You are completely responsible for, and in control of, the amount of money you make as an investor. Since I didn’t want anyone telling me how much money I could make, having no limits on my income appealed to me greatly.
5. Increase Self-Esteem
I think this is one of the greatest benefits to women investors. It’s not unusual for a woman’s self-esteem to be linked to her ability to provide for herself. Being dependent on anyone for your financial life can lead to a reduced sense of self-worth. You may do things you otherwise wouldn’t do if money weren’t an issue.
I’ve seen women’s self-esteem soar once they knew how to make it on their own financially. And when a woman’s self-esteem rises, the relationships around her tend to improve. Her life improves overall, because she feels good about herself and she is making choices that are genuinely true to her. With every little victory you accomplish, your confidence increases. Increased confidence leads to higher self-esteem. Higher self-esteem leads to greater success, which ultimately leads to the greatest gift of all—freedom.
These five reasons support why women and investing go hand-in-hand. The statistics prove how much times have changed for women and point out that our need for real-life financial education is no longer a luxury—it’s a necessity. Depending on someone else for your financial future is like rolling the dice in Las Vegas. The reward may be there in the end, but the risk is steep. Glass ceilings and income limits are what so many women have been fighting against for ages. Both disappear in the world of investing. And then two of the greatest gifts of all—a higher sense of self-worth and time to spend exactly as you want—can be yours. Investing is no longer just a good idea for women. It’s a must-have.
This article is adapted from Kim’s new book Rich Woman: A Book on Investing for Women. Copyright ©2006 by Kim Kiyosaki. Published by Rich Press
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