Men, Women, and Money
June 2nd, 2007Before I get started about talking about money, just want to get two things straight:
1) Health is more important than money. If your health is bad, it doesn’t matter how much money you have. I’d trade money for health any day.
2) Money has nothing whatsoever to do with whether you’re a good or bad person.
There. Now that that’s out of the way, I have to do this rant because I hear it all the time. Men have all the money. Women have glass ceilings. Blah blah blah blah blah blah blah.
First off, pick up a copy of The Millionaire Next Door. That book does a great job showing that just about every stereotype about millionaires is wrong. Wealth for one thing is measured by family, NOT by men vs. women. That said, men and women have completely different attitudes about wealth, and attitude is everything. That book found that it’s usually the women’s accounting skills and spending habits, not how much the couple makes, that determines how wealthy the family will be.
Another thing, millionaires don’t necessarily make gobs of money. The median income of a millionaire family is only $70,000, which for a two-income household is actually quite low for where a lot of you all live. So it’s not necessarily how much money you make, it’s what you do with it.
Men and women do different things with money. I was at Barnes and Noodle earlier today looking in the Investment section, and it was 100% male. Not ONE woman grabbed a book from that section the two hours we were there. Two young ladies did walk by it and one said to the other “buy that millionaire woman book” to which the other one replied “if I don’t spend money, I won’t have money problems.” That’s about the dumbest thing she could have possibly said. $100 says she’ll be broke 10 years from now.
Gender and small talk
Of most of my acquaintances, with guys, I talk sports, music, or investing when it comes to small talk. With women, I talk about family, movies, or t.v. shows. Women generally don’t want to talk about investing until they reach 40. Men start talking about it in their early 30s or even earlier. So there you go, a decade of potential investing wasted. That amounts to a lot of money they could have had. Of course, men when they reach 30 wish they started investing right after college instead of spending it on stupid crap.
I’ve bought stocks before after small talk with strange guys at bars. And I’ve given tips to strangers too. Each time, it’s a male.
Aggressiveness
The other drawback to women and investing is aggressiveness, or lack thereof. Several of my co-workers are close enough to show each other our 401k’s. I know that’s about as personal as showing each other your genitals to most folks, but we do it.
Men tend to invest more aggressively. One of the women I helped out had 100% (I’m not kidding) of her 401k in a savings mutual fund. That’s about as stupid as you can get when it comes to investing. Savings is a horrible thing to invest in, because even if you’re getting 4.5%, inflation is currently at 3.9%, so you’re barely beating inflation.
Stocks on the other hand over the past 100 years have averaged over 10%. Sure they go up and down and it can drive you mad if you watch the market every day, but my advice to those who worry is to relax. It’s all about the long-term.
Big salaries
I’ve worked with many women who made more money than I did. One literally used to make double of what I made, and my wife didn’t work at the time. Unfortunately for her, she never cut the umbilical chord, and to this day is still taking care of her 30+ alcoholic son. So, so much for investing. I would have kicked his ass out a decade earlier. She simply won’t be able to retire at 65, which is coming up a heck of a lot sooner than she’d like to believe.
Another used to make about $40-50k more than I did. She has a gorgeous collection of shoes and clothing, and is great to look at. However, she owns no home and only recently paid off her credit debt. And she wondered how with a wife and kid who don’t work, and a much lower salary, I was able to buy a house in California.
Now, those are two extreme examples, but you get my point.
That said, I do not pretend to be a Financial Consultant. I am not. I’m just a private investor, and I still have a day job. So don’t be thinking I’m Warren Buffet’s son or something. I’m just repeating what I see, for what it’s worth.
It’s changing for the better
The good thing about gender and money is it’s changing. Writers like Suzy Orman and David Bach are getting more and more women to think about money. That’s a good thing. When women start taking money more seriously at an earlier age, you’ll see a heck of a lot more female millionaires.
Now, I’m not at all justifying the disparity between the genders, I’m just trying to make sense of it. If women were as aggressive and thought about money as much as men, I guarantee you that you’ll see just as many women millionaires as men. It doesn’t take a big brain to get rich. It just takes patience, discipline, and hard work. And a little bit of aggressiveness.
This post is a perfect example of why I love to read your writing, and why I admire you as a person at all. It’s been a while since I came by to visit, but I still do from time to time.. I still do.
I agree with you on so many points. It’s so good to see you still putting those good words out there.
Interesting observations! I never noticed this trend, as those roles are reversed in our household.
In our 20s and 30s ALL our money went into our kids, and keeping a roof over our heads. In our 40s, we finally had some spare money to invest in our future. NOW, our state-run health plan won’t let us have any assets. The only thing we could do was invest our savings in a garage. At least that upped the value of our property.
honestly, i think i can manage money much more effectively than my husband. and i’ll tell it the differences comes from me watching my mom scrape her way out of a shitty facotry job although she managed to keep us fed and clothed during those years, miraculously. when she managed to get into an office job, and she is just a glorified secretary mind you, she has managed what she earns so carefully that she even was able to know that she’d survive financially (not loose their house and not have to work to age 75) after learning my stepfather had gambled away HIS retirement in casinos. (they keep their finances largely separate).
Clothosfate - Good to see you back. Please do keep coming back.
Tshsmom and Lime - The book The Millionaire Next Door says that among millionaire households interviewed, a higher percentage has the woman as the money accountant and control of the pocketbook. Women actually are better at managing money. When a woman is bad at managing money, it doesn’t matter how much money a couple makes, they’ll never be rich. When a woman is good at managing money, they’ll be rich eventually.
Men though are generally better investors. Like I said, this is changing with authors like Suzy Orman and David Bach who write explicitly for women investors. I’d love to see more women millionaire investors. I think that’s a good thing.
Now in our household, I’m the money nazi. I control our finances, and give Mrs. Z a weekly spending allowance. I control all investments as well. I think it works best when whomever is better at something takes the role.
But then again, she has some roles that are more important than money. I’d be completely lost without Mrs. Z. I could do at least a dozen posts on stupid things I would have done if Mrs. Z wasn’t around.
It sounds like you and J would get alone perfectly. LOL.. I let him do the money thing all the time. I am not a spender actually. I love to walk into a store and look but I dont like spending every red cent we have either. I get money when we have extra but I dont herd it every payday. I think that might have been the wrong wording. Sorry. I am very tired yet. But anyway J has his 401K plan and we took some money out to buy our house but he has just recently back in March been able to put more money in it again and when we got his last statement he was shocked to know how much more was in it than what he thought. Its was a amazing really.
I wrote a very long response and clicked submit and then got reprimanded for not answering the question and punished by deleting what I wrote.
That sucks.
Just imagine that I wrote something very witty.
Mybrid: I feel your pain. That’s happened to me many times.
Zombie: I know you’re not justifying the trend (you said as much). I agree with much of what you say, and it has a very detrimental effect on women. Divorced women, on average, experience a decline of income by up to 30%, while men’s increases by as much. Many times it’s because not only are women burdened with childcare after a divorce, but they’ve often got fewer options in the job market.
However, I must point out that much of this is socialization. Women are deterred from a very early age from taking an active interest in math. It’s been shown time and again that consciously or unconsciously, girls are called upon less than boys in math and science classes. Girls are also socialized to be less assertive, and therefore do not speak up as readily. Many girls are also raised within traditional norms that teach them to be dependent on others rather than independent. This has an obvious tie to what you’re talking about.
So how do we change this?
Encourage your kids NOT to embrace traditional gender roles. This goes for boys as well. Teach girls it’s NOT unladylike to assert yourself. Teach boys to respect girls opinions and to welcome them into their boys clubs for math and finance. (As a side, teach boys that it’s not UNmasculine to want to pursue traditionally feminine careers either - it goes both ways).
It’s not something “natural” that we simply have to live with… it can be changed - slowly - if we try…
ZS, that’s EXACTLY the kind of partnership L and I have in our marriage. Whoever is good at something does that chore.
Sooo many people, including my mother, have chastised me for rototilling…..that’s a “man’s job”. I’m sorry, but L doesn’t have the feel for the soil that I do, so I do the tilling.
Tweety - You are doing it exactly right. You buy a house, then work on your 401k investments. Even Donald Trump says that your house is your most important asset.
It’s good you have your spending under control. Even if a family has employment and health, bad spending habits can be devastating.
Mybrid - Too funny. Oh well. I’ll imagine I would have been a better person today if I had read it. Bummer.
Laura - I think you hit the nail on the head when it comes to assertiveness. You need to be assertive to be noticed. You need to be assertive to make the money you deserve to make, and get that raise you earned.
I was reading Suze Orman and she was saying that women aren’t assertive enough when it comes to asking for a raise. They’ll assume their manager sees them working hard. It doesn’t work like that. Then she said that men will walk in and demand a raise. That’s what needs to be done.
Is it socialization? Sure. An assertive woman is a “bitch,” which I think is just plain wrong. I find a woman who knows what she wants to goes after it sexy. But I don’t mean to dog on your gender, but I’ve noticed it’s more other women who hold back women than men. Yes, there are those cavemen attitudes in men, but nowadays, it’s almost always other women calling a woman with ambition a “bitch.” Or maybe that’s just my limited experience.
Tshsmom - Whoever is good at something does that chore.
That’s my belief 100%. Do what you’re good at.
My wife mows the lawn. she enjoys it. I hate doing it. She also builds the furniture. We buy those boxes of furniture you have to put together and she’ll build it. I don’t have the patience.
She also fixes Junior’s bike. She’s much more handy than I am, except when it comes to cars. I’ll do all the car work, but even that, she wants to learn how to do.
Thanks Zombie it makes me feel better some one is out there thinking we are doing the right thing. Hubby thinks we jumped in to quickly and I think we are doing ok. Well anyway you are right about those raises. I mean J walked into the bosses office about two months ago now and demanded a 2 dollar raise but we wont know anything until late next month. They do raises once a year and this sucks. From what I am hearing they are going to give all the truck drivers a good raise.