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Women and Money
Overcoming the Financial Gender Gap

Ninety percent of all women become totally responsible for their own financial welfare at some point in their lives, yet women have lagged far behind men when it comes to financial planning and investing. The attitude of many women that someone will take care of their financial needs keeps them from becoming involved in their own financial future, often until death, divorce, job loss, illness or other events thrust them into financial disaster.

Women who do invest tend to be more cautious than men. While conservative investments have their place in a portfolio, investing too conservatively can endanger financial security by not providing adequate resources.

A "Financial Gender Gap" study conducted by Prudential Securities revealed significant differences in how men and women invest. The study places investors in one of the following three zones:

ACTION: Active and accomplished investors.

COMFORT: Complacent individuals who realize the importance of taking responsibility for their financial futures, but don't change their strategies as life situations change.

CAUTION: Those too occupied with the ups and downs of everyday life to develop financial plans.

More men than women were in the Action zone, while more women were in the Comfort and Caution zones, indicating gender differences in risk tolerance, perspective on change and on the future, control issues, attitudes about money, and investment knowledge.

90% of women become wholly responsible for their own financial welfare sometime during their lifetime.

50% of working women do not have a pension.

The average age of widowhood in the U.S. is 56.

Women's pay averages only 76% of men's pay.

90% of retired women are not eligible for pension benefits.

From FYI Online, by Waddell and Reed

The "Investor Zone Update" study, and studies conducted by other organizations, have found that in recent years women have become more inclined to take risk and are less likely to let lack of investing knowledge keep them from investing.

While these studies indicate that women are becoming more empowered financially, there are still fewer women than men in the Action zone, and women are still significantly less likely than men to take investment risks. It's important for women to educate themselves about investing and to become more risk tolerant in order to adequately secure their financial futures.

Which zone do you think you fall into: Action, Comfort, or Caution? Take the Prudential Investment Personality Quiz and find out. The results will include suggestions on what you can do to improve your investment strategy.


  • Start Now--You don't have to have large amounts of money. Starting early is the best strategy. The authors of The Millionaire next Door and Getting Rich in America believe that becoming rich is now a matter of personal responsibility and choice open to almost all Americans, if they start investing at least 10% of their income when they're young.

  • Set Goals--The most common financial goals include paying off debt, putting kids through college, and saving for retirement. Change your strategy as your situation changes.

  • Shake off the old myths--Myths and misconceptions sometimes prevent women from taking charge of their financial security.

  • Just Do It--Don't limit yourself to conservative investments such as money market accounts and CDs. Use asset allocation to diversify your portfolio.

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