Fear of commitment - to investing
Although more are confident in handling their money, women remain challenged in making it grow.
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Other women learn on their own. Determined to be informed, Diane Hurns began reading business publications, including The Wall Street Journal and Business Week. She also talked to a friend and a co-worker, both financially savvy women. Gradually, she started investing. Over time, her money grew.Skip to next paragraph
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"I was able to cash in my investment earnings for my down payment on my first home in Washington," Ms. Hurns writes in an e-mail. "Now my husband leaves the investment options to me."
For others, investing remains an elusive goal. "I do budget, but I pretty much go through my whole paycheck every month," says Diane Dobry, communications director of Teachers College at Columbia University in New York. "I'm procrastinating. I'll figure it out sometime when I have a little extra money."
Although Ms. Dobry has a retirement account, she is concerned that it will not be enough, especially now that most of today's pension plans require workers to be more knowledgeable about investment options. "I don't really know the stock market. I sometimes think of it as gambling. I hesitate to put my money somewhere where I could possibly lose money," she says.
The key to overcoming fears like these is education, Professor Cunningham says. "We need to do much more in the way of educating people, both men and women, especially if we think about privatizing Social Security."
Investment clubs, increasingly popular among women, offer one way to learn. Members form a partnership, registered with the state. They pool their money and make group decisions on how to invest.
"Usually one or two people have some expertise," says Professor Pantalone. "That helps the others. Or you bring in the broker you use. It's a way of self-educating in a very nonthreatening environment."
When women join an investment club, she says, they can ask questions such as "What's the difference between interest and dividends?" without feeling inept. Calling her club "great fun," Pantalone says, "I've learned from it, and the others have clearly learned too." She notes that the National Association of Investment Clubs explains how to set up partnership agreements. It also holds forums and educational events.
Other forms of learning include adult education classes, seminars on mutual funds, and books such as "Investing for Dummies." Pantalone encourages women to take classes or join a group. "It's hard to stay motivated if you're just doing it by yourself," she says. "You really have to go someplace, and then you have to stick with it. Just sitting through one course is not enough. You have to start using it. That takes time and work."
Working with a financial adviser can help, too. "I am amazed at the number of women who do not use an adviser," says Diane Danielson, CEO of downtownwomensclub.com, a women's networking organization. "There seems to be a fear of fees. There's also the fear that they don't have enough money to invest."
She credits the advice she has received over the years for her current financial stability. Without that guidance, she would have left her money in a bank.
To reduce the ranks of what one adviser calls "mattress investors," Ms. Sweetser offers three principles of financial management.
First, invest. "There's still a risk if you're holding a dollar in your hand or putting it under the mattress. It's an inflation risk. A dollar today is buying less than a dollar did a year ago. Look at gas prices."
Second, invest on a regular basis to build a nest egg.
Third, diversify your portfolio. She buys individual stocks as well as stock and bond funds. She also buys both domestically and internationally.
As Klein and those in her group lead the vanguard of student investors at Scripps College, financial advisers see a larger challenge. "We have to help women understand at a very early age the importance of saving systematically for their retirement," says Rose. "They need to think about it today."