Statistically, women are less likely to invest their money. Those who do tend to wait until they are older to start. However, financial experts see that trend shifting in another direction. Today, working-age women boast a collective net worth of $3.4 trillion, which represents 46 per cent of the Canadian total. In fact, women earn 42 per cent of the total Canadian household income, up from 25 per cent in 1976. Those income gains, says RBC Investment and Wealth Advisor Mimi Ramadan, mean Canadian women collectively control $240 billion more each year than if their income share hadn’t increased. When it comes to retirement planning, she says growth in women’s retirement savings prevented more than one million senior women from falling into poverty.
Mimi points out that women today are more confident and financially savvy than in the past. “Women’s economic clout,” she says, “helps drive the consumer economy. Women make the majority of household purchases including food, necessities and health care. More surprisingly, single working women now boast larger private pension assets than their male counterparts, reflecting their strong presence in sectors where defined-benefit pensions are more prevalent. Women also are a growing force in the housing market and charitable giving.”
Want to start investing but don’t know where to begin?
Mimi encourages all women to start by educating themselves. “The more women read about investment, the more they’ll understand what they can invest in and how it will affect their overall financial picture.” She adds that investment research and understanding the role retirement planning can have on one’s financial plan is crucial. “Once women begin to take control of their financial future, they are statistically better investors than men because they tend to take a longer-term view versus the shorter-term, aggressive style of many men.”
Mimi also points out that investment savvy women have a powerful impact on family wealth and ultimately the transfer of wealth to the next generation. “It’s been confirmed that women play a critical decision-making role in family financial management and are instrumental in deciding how to educate the next generation on money matters.” She adds that women are capable, collaborative, results-oriented and well-informed. “Most of their financial learning has been self-directed and that’s an educational approach that women plan to improve upon for the next generation.”
Those contemplating investment must understand that choosing the right investment is critical. The following are just a few key questions to consider:
- Should you invest for safety or growth?
- How do you balance risk and return?
- What will it cost to invest?
Though it’s important to look for ways to grow your savings with a level of risk you can tolerate Mimi cautions, “If you invest only in very safe options, your savings may not last as long as you will need them.”
More women today are aware of the need to plan ahead and think about their financial future. With a longer average life expectancy than men, women are concerned about having enough to fund retirement. Interestingly, 57 per cent of women surveyed intend to pass on their wealth only upon death or illness. Of those, more than one-quarter, or 27 per cent, say the reason is that they don’t feel they have enough to give away gradually while living and 31 per cent feel they need their wealth to fund their lifestyle.
Overall, says Mimi, women want to feel understood, especially when talking about money. “As an advisor, I recommend individuals take the time to understand why they feel the way they do about saving, investing and money in general. In short, women want "someone who gets them." And I do.”
For a complimentary and confidential assessment of your current investment portfolio, please contact RBC Dominion Securities, Financial Planner, Investment and Wealth Advisor, Mimi Ramadan at 519-822-1910.