Ladies- Why Do We Need To Invest?

It is vitally important in this current day and age for all of us to begin taking control of our financial situation and start planning for our future, and the futures of our children. 

We can no longer rely on the government to hand out an aged pension once we retire. We cannot take for granted that at the end of our working life we will be taken care of financially. 

The world population is ageing, due to the baby boomer generation, and within 30 years there will be so many retired people, compared to the number of working age people, that it will be economically impossible for the government to afford to provide any reasonable source of monetary assistance for the elderly. 

The Australian government realised this, that is why they introduced the compulsory employer paid superannuation scheme and are even now beginning to give financial incentives to Self-Funded retirees. 

(For non Australians, the Superannuation scheme (also known as 'super'), is a way of saving money while you are working, so that you will have money when you retire. Whist working, your employer is required to allocate a percentage of your salary each pay, to make sure you have money to live on in the future. The U.S. equivalent to a Superannuation plan would be defined benefit or defined contribution plans).

Most of us have never sat down and even considered the ramifications of why the compulsory super was introduced and for many of us it is a matter of too little too late. Even for the young women in our society - who have a full working life ahead of them, they still cannot rest assured of a comfortable retirement. 

Why is this? It is because that unfortunately even with contributions at the current level of less than 10%, someone on an average wage who works continually for 30 years, is still going to find themselves trying to survive on an income equivalent to less than $20,000,00 per annum in today's dollars. 

You will notice that I said continually working for 30 years. This is another reason why women are particularly disadvantaged. Firstly because they often have to take up to ten years leave from the workforce to raise children, secondly because women in general earn less than their male counterparts and thirdly because an enormous proportion of the women in Australia, for example, will never have received any superannuation contributions, prior to the compulsory superannuation being introduced, and will therefore not have had contributions made over their entire working life so far, giving them even less to fall back on by the time they retire. 

Many women may previously not have thought of lack of superannuation contributions as being a problem, as their husbands may have been contributing to super since they first began work. Unfortunately though with the high number of divorces in this country, it is unwise to rely on the fact that your partner's superannuation will be there for you in your retirement years and even if a large proportion is awarded in a settlement - that it will be sufficient to sustain a comfortable retirement for any length of time. 

All of these factors are why women now more than ever, need to begin taking action to build up a source of ongoing income, that will grow to such an extent, as to be able to provide a secure and happy future for themselves and their children. 

It needs to be a source of income that is unrelated to physical work...that is an income that is generated from income producing assets - and not from our personal efforts. 

One of the best sources of creating this ongoing income stream is to begin building an investment property portfolio, also aptly paraphrased as bricks and mortar. 

We need to start investing in income producing assets now, so that they will have time to grow and develop so that we will be financially independent for our retirement years. 

The most important concept to grasp in relation to building wealth for retirement and for creating finances that can be directed toward charities, or helping out your family is that of Compound interest.

 In mathematical terms 72 divided by Compound Interest Rate of Return = Years for Money to Double in Value. 

Therefore if you have $1,000.00 invested at 10% interest, then the number of years that it will take for your money to double to $2,000.00 is 7.2. It will quadruple in 14.4 years and be worth 8 times as much in just over 21 years. 

If your money is invested at 7% interest, then it will take approximately ten years to double in value. If it is invested at 5% it will double in just over fourteen years. 

The two most important aspects of compounding are one: rate and two: time. The higher the rate and the longer the time something is left to compound, the greater the final result will be. 

This is why the sooner we start investing, the better. 

Article Source: https://EzineArticles.com/expert/Debra_Lohrere/27054

Debt and Money Management - Differences Between Men and Women

In today's tough economy, it seems pretty normal to have debt. Most people today, regardless of their financial status, are into debt. In the majority of cases, financial decisions are based on emotion rather than logic. The question now is, who have more debts, men or women? What factors are behind this interesting phenomenon? 

Statistics on Debt and Money Management Between Men and Women 

• According to research, there is a significant difference between how men and women generate economic decisions. Their economic choices are actually influenced by behavioural psychology, neurobiology and brain chemistry. It was further found out that there is a substantial difference on how men and women manage money, spend resources and handle debt

• Research shows that women are more prone to impulsive buying compared to men. While 4.5% of men's population claim that they have difficulty in resisting sale, 23.7% of the women's population actually buy unplanned things which they don't necessarily need

• Most women spend for fashion accessories, dress, bags and shoes. Meanwhile, men spend most of their money on electronics, gadgets, cars, alcohol, watches, eating out and sports tickets. It is believed that women tend to overspend due to societal influence and pressure to stay in fashion while most men spend excessively to impress women. 

Men and Women in Debt Management 

• Through the years, there has been a significance rise in the number of men and women who seek for financial advice. However, women remain the #1 client of financial advisors. But this doesn't imply that women have more debts than men. Rather, women have more positive outlook that debt can be resolved and they have recognised that problems on debt really exist. Men are less likely to seek for financial advice mainly because of their ego. 

• Why is this possible? Blame it on HORMONES. 

• What Roles Do Hormones Play in Debt and Money Management The surge of testosterone hormones in the body stimulates the "winner effect" which increases their ability to take risks. While it can be beneficial at times, the "winner effect" can also drive men to produce non-feasible financial decision. 

• With each win, the level of testosterone in a man's body tends to increase. In the long, it can impair men from making rational and effective decisions. One study concluded that testosterone hormones create quick wins for men but they are more likely to be followed by losses. On the other hand, women will tend to outperform men with their steady and slow wins. 

Changes in Organisation Culture 

• Through the years, there has been a significant change in the culture of many organisations. Women are now more able to participate in decision making and of course, they are given higher positions in companies. 

• Women are believed to be better money managers, hedge funds managers and profitable investors compared to men. Men are thought to be more optimistic than women. Their intense optimism drives them to become more aggressive in making decisions. But of course, this only applies to younger males as they experience a great surge in testosterone level regularly. 

• Levels of testosterone in the body incur diverse effects to the decisions of women. Low level of testosterone makes women less productive while high levels result to the generation of selfish decisions. 

Men and Women in Making Investments 

• Since most men are risk takers, they are more likely to invest in certain business endeavours compared to women. Most women are insecure about their knowledge in financial issues which repels them from making investments. 

Men and Women in Saving 

• There have been diverse claims about the saving behavior of women. While there are researches revealing that men are great savers while women are extravagant spenders because of their spendthrift shopping activities, some researchers claim that women are indeed better savers, spenders and investors.

• Women are less likely to make investments but they are more inclined to engage in long term financial planning. While many women are less risky in making investments, studies show that they can be as productive and successful as men when they engage in certain endeavours. 

• Despite the fact that most women earn less than what men earn, women tend to save more because of their huge interest to save. In many western countries, women are claimed to be better spenders and they manage to build larger savings compared to men. 

Article Source: https://EzineArticles.com/expert/Rebecca_Sophia_Meade/1393611

Advice by Women For Women On How to Save - Retirement Planning

Here are some tips about retirement investing for women: 

First, we must understand that Investing is emotional. It is tied to our mindset and sometimes we don't plan far enough ahead for very personal reasons that can often be self-defeating. If you can relate, seek out advice from other women who have made the retirement decision to plan ahead.

Tie your savings and retirement goals to your personal goals. Examine what you believe your health may (or may not) be and whether or not the swimming or golfing or running a marathon goals are realistic and achievable in your retirement.

The 40-60 age group is deciding if they want to change careers, change their life goals, or stay in what they are doing right now. They are at that midway place in their lives where they are planning for their long-term goals. 

Women need 20% more than men to retire because we are living approx. five years longer than men 

Women tend to invest more conservatively than men because we fear losing our money.

• Instead of fearing losing our money, we REALLY NEED TO focus on whether we will run out of money
• If you are too conservative with your investing then your savings won't keep up with inflation
•  Your living costs for retirement will depend on your lifestyle, check out the 4% rule as a starting point
• A diversified portfolio is the best and sticking with that is important! 
• Can you afford to count on living on your retirement pot?
• Be actively involved in setting aside money. We recommend at least 10% of your monthly income to be allocated to your investing journey.

In terms of contributing to your retirement pot:

• Make use of your employer matching program if available to you (Country and Employer specific)
• Check the tax rules for self employment for your home country
• Many countries offer tax relief if you personally contribute, look out for SIPP, ISA, IRA's or applicable for your specific geographic location
• Countries such as Australia have a government agreement with employers. You employer is required to allocate a certain percentage of your income to a unique fund which you can access at aged 55

If you have a windfall of money you may or may not be subject to tax on it, so be smart with your goals and what your plans are for that money so that it lasts for you. Seek advice to ascertain your most appropriate option

• Be smart about what you get because most people go through a windfall in two years 
• Control your destiny with your good choices

Don't try to time the markets and wait it out. Buy index funds today and allocate funds monthly to take advantage of compounding and $ cost averaging

We tend to work from three cash strategies: 

1. Long-term: If you have long-term goals, have your money working long-term. 

2 & 3. Short-Term and Cash Flow: Plan your strategy and work your goals and plans around your lifestyle and what you need and want to happen. Plan for that money. 

And when it comes to retirement planning by watching the news.....

TV media hype is slanted, biased and mostly (just plain) ignorant. 

When you plan for your retirement take these tips into consideration. That way the twenty years you hadn't planned for, won't have you looking for a job at your local grocery store. 

You cannot also overlook the opportunity to start your own business. It is an true way to gain tax advantages, increase your savings and plan for your retirement. 

Dervived from Article Source: https://EzineArticles.com/expert/Mischelle_Watkins/343114