How women money is different than men’s

By Our Readers Did you catch that recent New York Times article? It’s one of the most acclaimed stories I’ve ever read, written by Melissa Dahl about how women’s money isn’t the way it…

How women money is different than men's

By Our Readers

Did you catch that recent New York Times article?

It’s one of the most acclaimed stories I’ve ever read, written by Melissa Dahl about how women’s money isn’t the way it used to be and how women are finally emerging as viable investors.

It actually started out as a rather humdrum article. Dahl asked three finance professors to talk about why their gender plays a different role in financial decisions than their male counterparts. I was actually writing about a similar study back when it was published in the Journal of Consumer Research. That study’s findings were quite striking; in fact, I call them the stock-broker paradox.

The researchers looked at the decisions men and women made with stockbrokers when they were making an initial purchase of stock. Surprisingly, they found that the men did it differently from women. What went down was:

Men shopped with their colleagues; women shopped with strangers. Men tended to form an investment group with someone they felt comfortable working with, whereas women often looked for someone “anyone else” who was helping them make their investment decisions. Men were especially attracted to men-only groups. Women were less inclined to hang out with others they had little ties to.

There was more to it. The men were likely to weigh a lot of different factors before making a buy or sell decision, while women were more likely to focus just on how the brokerage actually treated them, or just how much cash was in their account. And importantly, women weren’t necessarily any less intelligent or intuitive investors, either.

This phenomenon is what makes the female writer’s story so fascinating, in my view. Instead of seeing this study as a surprise or some quirky exception to conventional wisdom, let’s take it as a simple sociological observation: women are more likely to buy and own stocks with their friends because they trust each other and they know what to expect in terms of service, salesmanship, and honest opinion. Plus, they’re less likely to choose a salesman who doesn’t treat them with respect and treats their money like the possession it is.

I remember when we bought our first apartment. Yes, yes, it’s taken over our lives. But every year since the move, we’ve added money to our (certified liquid cashless) funds with H&R Block. Why? Because our broker has treated us so well, and is so attentive to the advice and instructions we give him, that he has been a crucial part of our financial futures. This story resonates with me because I’ve not only worked with a few women brokers. I’ve also worked with a few men, and they rarely have treated me as respectfully and professionally as the ones who work with our clients.

You don’t have to guess how much I love investing. They are the best.

I just wish we had better data to compare outcomes, but I’ve built a few surveys of women and men around that; what I have so far shows that women really do score higher than men when it comes to investing, when they’re younger.

The bigger picture here is that women still have to fight that preconceived notion of men as superior investors. But with more and more data available on their advantages, it may be time to stop trying to save for the future in decades and realize that investing for the future may already be happening for us in our memories and in the things we keep tucked in our houses: savings, home equity, rainy day funds.

Our sons and daughters are right under our noses. Let’s capitalize on the advantages we already have and not worry about them in ways that have nothing to do with us and everything to do with our children.

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