Tag: womenandmoney

The Idea that Women Need “Extra Help” Understanding Their Finances is a Myth

Published in: Resources |

For 20 years, Annamaria Lusardi, an Italian-born economist and researcher, has been testing people all over the world on their financial knowledge. She has become especially well-known for constructing a financial literacy test composed of three basic questions on inflation, diversification, and compound interest. Unfortunately, only about 30 percent of Americans could answer all of them correctly. Even more alarming, however, is a sizeable gender gap: While 38 percent of men provided the correct answer to all three questions, only 22 percent of women did the same.

Research like this has fueled a newfound crusade within the financial services industry to educate women on their finances. While we submit that the gender gap in financial literacy exists, let us be clear: The idea that women need extra help understanding their finances is a myth.

A key reason why women performed worse than men on Lusardi’s financial literacy test? They disproportionately answered the test questions with “do not know.” To determine if this was truly the result of a lack of understanding, Lusardi and her research team decided to remove “do not know” as an answer option. When they did, women’s correct responses increased significantly. In fact, Lusardi estimates that half of the gap was the result of women underestimating their own knowledge!

An Unfair Advantage: The Correlation Between Financial Knowledge and Wealth

While this simple change sheds light on how often women underestimate themselves, it did not eliminate the gender gap entirely — which means that yes, men still do appear to have more financial knowledge than women. But it’s not because women are less capable of understanding financial concepts; it’s because they’re rarely given the opportunity to learn about them in the first place.

Across the world, those with the most financial knowledge are also the most wealthy — and it turns out men are significantly wealthier than women.  As a result, a college-educated man is 45 percent more likely to understand diversification than a low-income woman with less than a high school education.  And because financial literacy is a major predictor of behaviors that accumulate money (like investing in the stock market), this lack of knowledge only exacerbates economic disparities.

Where the Financial Services Industry Gets It Wrong

The financial services industry views this disparity as an opportunity to “swoop in and rescue” women from the unfortunate situation in which they find themselves. Advisors cite less financial education, a longer life span, and lower salaries as evidence that women need help understanding and managing their money, and proudly present themselves as the solution. Large firms, eager to build their clientele, now offer internal workshops on how to deliver “female-friendly” financial advice, complete with patronizing sales pitches. And a new flock of financial gurus have now made a living off of selling books that are unhelpful at best, and sexist at worst.

Women Are Taking Initiative and Fixing the Financial Literacy Gap Themselves

Fortunately, women already know they need to learn more about money and are taking it upon themselves to fix it. Financial wellness programs have seen an encouraging uptick in female participants in recent years. In 2014, Financial Finesse found that women completed two-thirds of their financial evaluations, up from one-half three years before.

Many instructors have also observed that women’s willingness to seek out financial education makes them easy to teach compared to men, who are usually less likely to admit what they don’t understand. And we’re already seeing the gap closing across generations: A recent study found that the financial literacy gap between genders for those under age 35 is much smaller than the general population. Women are taking initiative, proving they do not need to be coddled and cajoled into understanding their finances.

Learn More about Money Myths with The Humphrey Group’s eBook

Of course, because this problem is largely rooted in systemic issues, many argue that education alone won’t make the financial literacy gap disappear.

This is certainly true — rather, large-scale economic change would make a huge difference in helping women become more educated about money.

But for now, we can move the needle by focusing on what we can control and take financial literacy into our hands. If you’d like to learn more about common money myths and how we can dispel them, download our free eBook Rewriting the Rules: Telling Truths About Women and Money.

Why You Should Frequently Revisit Your Estate Plan 

Published in: Resources |

We’ve written on the blog before about the importance of estate planning, especially for women.

Estate planning is a woman’s issue: Women often live longer than their partners — meaning that they might find themselves having to determine their partner’s financial destiny and decide how their finances will be allocated to family members, taxes, and charities.

Also, women today lead dynamic and complex work lives, building fulfilling careers but also having to step out of the paid workforce for periods of time to raise their children or take care of their parents. Such variances in employment can potentially impact a woman’s financial well-being. Therefore, estate planning plays an important role in ensuring every woman’s long-term economic security. 

Today, we’ll be taking the topic of estate planning a step further and discuss why you should frequently revisit your estate plan. 

Estate Planning: Not a “Set It and Forget It” Matter

You should revisit your estate plan every three to five years, and also after major life events, such as birth, marriage, or death. You shouldn’t just revisit your will — you should review everything in your estate plan, including the following:

  • a last will and testament;
  • revocable living trust;
  • a durable power of attorney;
  • a healthcare power of attorney;
  • living will;
  • life insurance beneficiaries;
  • retirement plans’ beneficiaries;
  • and business plans.

There are several reasons why you might want to update your estate plan — from moving to another state, to wanting to incorporate philanthropic giving in your estate plan, to wanting to include your growing family. Updating your estate plan requires serious thought — LegalZoom provides a great list of questions you might want to consider. These include: 

  1. Is there a new marriage? 
  2. Is there a new domestic partnership or a common law marriage? 
  3. Have you changed the guardian you chose for your children? 
  4. Is there a new baby or an adopted child?  
  5. Do you want to disinherit a spouse or a child? 
  6. Do you want to add or change beneficiaries, including a charity?  
  7. Have you divorced since your estate plan was made? 
  8. Do you have a blended family? 
  9. Has one or more of your beneficiaries predeceased you? 
  10. Do any of your beneficiaries have special, or changed, needs that you want your estate plan to address? 
  11. Have you moved to a new state? 
  12. Do you want a new trustee for your trust? 
  13. Have you received an inheritance or additional assets?  
  14. Do you want a new person to have power of attorney? 
  15. Do you have a living will? 
  16. Did you open a business or do you currently own one? 
  17. Are there new tax laws in place?

By answering these questions, you can ensure your wishes are clearly defined and will be carried out in the future.

Estate Planning with The Humphreys Group

In a survey by Wells Fargo, one in six older Americans said their financial documents are out of date. Many said they put off these tasks because of a lack of urgency. Yes, it can feel easier to procrastinate than have to take the time to review your estate plan, especially since it’s such an emotionally charged topic. But by putting it off, it will only create more problems later on.

The Humphreys Group understands the role of emotions in estate planning. We provide wealth management for women that blends empathy with expertise — because we know that both carry an equal amount of weight when it comes to handling money matters. 

If you’d like to discuss updating your estate plan, reach out to our team todayWe look forward to hearing from you.

The Truth About Gender Stereotypes and Mathematics

Published in: Resources |

Back in 2005, Larry Summers — then, the president of Harvard University — was asked to speak about the underrepresentation of women in science and engineering. In his remarks, he suggested that women have difficulty finding success in these fields because of innate gender differences in our mathematical abilities — he called it our “intrinsic aptitude.”

This prompted a massive outcry, in and outside the world of academia. Even after issuing an apology, the comments led to his resignation the following year. Summers likely didn’t know it at the time, but he was echoing one of the oldest gender stereotypes in the book.

And although we have decades of research disproving it time and again, one need look no further than James Damore’s 2017 Google memo — which asserts that “women are biologically less capable of engineering” — to confirm the stereotype is still alive and well.

We are officially adding our voices to the chorus: The idea that women are inherently bad at math — and anything it involves — is a myth!

Looking at the Numbers

Of all the myths we’ve chosen to bust, this is probably the one you’re most familiar with. For generations, women have been told they aren’t as skilled at math as their male peers, and as a result, they’ve been steered toward pursuing careers in the humanities rather than science, technology, engineering and finance.

People who echo Summers’ claim say research is on their side, but since the 1980s, a litany of studies have thoroughly debunked this notion. One well-known meta-analysis found that female students have consistently earned slightly higher grades than their male counterparts in all fields of study since 1914.

Yes, you read that correctly — for more than a century! And when you look at a combined high school grade point average for math and science specifically, girls have been outperforming boys for at least 25 years.

Although the gender differences are generally small, one team of researchers stated the sheer consistency of female achievement suggests their findings “should not be ignored.”

To be clear, although we earn better grades, boys still do receive higher math scores on standardized tests like the SAT, ACT and advanced placement exams. But the gap has grown smaller over time — in the early 1980s, there were 13 boys for every girl who scored above 700 on the SAT math exam. That ratio has now shrunk to about three to one. Clearly, it won’t be long before this gap is closed entirely.

When We Reinforce Gender Stereotypes, Everyone Loses

The bad news is that despite their impressive gains in test scores, girls are still internalizing the message that they aren’t as smart as the boys around them. Researchers at Dartmouth College and Northwestern University found that reminding women of gender stereotypes before an exam not only heightened their anxiety but also caused them to underutilize the regions of the brain associated with mathematical learning.

Even the mere acknowledgement of gender can hamper girls’ achievement — when female students were asked to identify their gender before taking an AP calculus exam, they performed worse than the female students who were asked to identify it after the exam. This little box is estimated to keep nearly 5,000 female students a year from earning advanced calculus credit!

Unfortunately, the consequences of these stereotypes endure long into adulthood. When those female students become adults and start to face questions about personal finance and investing, they often assume those topics require high-level mathematical expertise and doubt their ability to handle it. A 2016 survey found that when tested on financial literacy and diversification, women were much more likely than men to choose the answer “do not know.” But when researchers removed this option as a potential answer, the chances of women choosing the correct response increased significantly.

So, how do we make sure this myth stays in the past, where it belongs?

In Our Experience

Mathematical expertise is not an innate characteristic; it’s a skill set that improves with effort and practice. Even if you still have nightmares about your high school algebra class, you are capable of learning about the fundamentals of investing.

That said, you don’t have to know it all. The financial media is full of superfluous terminology and analysis, which can give a lot of women the false impression that they’re too dimwitted to understand the field. In truth, there are only a few key principles you need to understand to be a good investor.

On a personal note, Diane Bourdo, president of The Humphreys Group, was an English major as an undergrad and refined the art of avoiding math and science during her tenure at the University of Wisconsin. Fast forward to a few years later, and she discovered the absolute joy and certainty of calculus! The precision of math came as a relief after so many years of free-form essay exams.

Want to learn more about money myths? Download our free eBook Rewriting the Rules: Telling Truths About Women and Money and/or reach out to us today.

Rewriting the Rules: Dispelling the Myths Around Women and Investing

Published in: Resources |

When a Washington, D.C-based nonprofit held a series of investment seminars for women nurses at a local hospital, only one or two nurses showed up. But when the nonprofit team changed the names of the seminars, emphasizing the words “financial security” instead of “investing,” suddenly the room filled up with attendees.

This story highlights that women are interested in investing. They just see the concept in a different light or associate it with a different name.

That’s right: The idea that women aren’t interested in investing is a myth.

The Investing Industry Was Created “By Men, For Men”

Sallie Krawcheck, Wall Street veteran and CEO of Ellevest, likes to say that the investing industry was created “by men, for men,” and therefore defaulted to their preferences and characteristics. She points out how the industry places special importance on trading to beat a market index, rather than doing so to accomplish a specific goal, and is overrun by the financial media, which closely resembles sports networks.

Until recently, most firms seemed to focus primarily on male clientele and often relied on financial jargon that men seem to have a higher tolerance for. And then there’s the industry symbol of a bull — a figure that is literally masculine by definition.

Given all this, it makes sense that women haven’t been particularly enthralled with what most investment firms are offering.

Other Industries Have Also Historically Omitted the Female Perspective

The investment world isn’t the only industry that’s designed this way, of course. Design, business, media and technology have also historically omitted the female perspective. Some female entrepreneurs argue that as a result, men move through the world unaware that it’s been designed for their comfort, while women move through the world encountering small, daily points of friction or discomfort. The pain points they encounter in the investment world are especially detrimental, however, because their financial wellbeing impacts their livelihood.

Fortunately, now that women’s economic influence is growing, it appears investing is the next hurdle they are ready to jump. In 2015, Merrill Lynch found that just over 50 percent of women said they wanted to participate in making changes to their investment approach — nearly mirroring the 55 percent of men who said the same.

And when Fidelity asked what women would most like to learn with 60 minutes of professional financial advice, the first choice listed by women in every age group was “learning more about how to invest my money.” It’s clear that women are more ready than ever to carve out their place in the world of investing.

Like the nurses who attended the educational workshops referenced earlier, we’ve also found that women become especially engaged in financial planning when they realize investments can serve as a vehicle to care for their families, reflect their values and give them peace of mind.

Call it what you will — investing, financial security, asset management — but when women make this connection, chances are they’ll enjoy it more than they ever expected.

Keep The Conversation Going About Money Myths

If you’d like to learn more about money myths and how we can rewrite the rules, download our free eBook Rewriting the Rules: Telling Truths About Women and Money. Also consider attending one of our Conversation Circles, where we have authentic discussions about money and everything that comes with it — our fears, our successes, our memories, and the attitudes, behaviors and legacies we’ve adopted over the years.

Easing Tensions Around Family Inheritances 

Published in: Resources |

At The Humphreys Group, we know how much our early personal experiences, family histories, and backgrounds can affect how we view money in adulthood. This is especially true when it comes to handling family inheritances.

Sibling Dynamics and Family Inheritance

Let’s say your grandparents tended to show favoritism toward your older sister. Or your brother got a new car for his sixteenth birthday, and you didn’t. Or your parents always went to your sister’s soccer games, but not yours. This longstanding sibling tension and resentment can play itself out in family inheritance discussions 

As Amy Castoro, a family wealth coach and president and chief executive of the Williams Group, aptly said in the New York Times, “So if one son is designated as the executor of a parent’s estate, the other son or daughter are looking at him saying, ‘That guy cheated at Monopoly our whole life. Why would I trust this guy now?’” 

In a 2019 TD Wealth survey, nearly half of estate planning experts identified family conflict as the biggest threat to estate planning. Designation of beneficiaries was the most common cause of conflict. Other sources of conflict included not communicating the plan with family members and working with blended families. 

How Gender Plays a Role in Family Inheritances

At The Humphreys Group, we also know that family conflicts can arise from issues related to gender, too.

Parents might have gender biases around who manages the inheritance or legacy, thinking their sons are more up to the task. But, as we’ve noted in our eBook Rewriting the Rules: Telling Truths About Women and Money, women are smart and responsible with money, and they have the financial confidence and insight needed to be a trustee. Unfortunately, these gender biases and unfair treatment can start when we’re youngSeveral studies reveal jarring differences in the ways parents talk about money with their sons vs. their daughters.

But it doesn’t just stop at hidden gender biases. Women are also more likely to be their parents’ caregivers, and it can be frustrating when they don’t see their unpaid caregiving work reflected in their parents’ inheritance plans. 

Tips On Navigating Inheritance Tension

So how can family members navigate these challenges? Here are some tips.

1. Parents should clearly communicate their plan. Why do most generational wealth transfers fail? It’s often because of poor communication. Don’t leave your arrangements a surprise until your death. Have a family meeting — quarterly or annual meetings — so your family members completely understand how much of the wealth they will or will not receive. Explain what you’re trying to accomplish with your estate plan. 

2. Listen to each other and respect one another. This applies to both the heirs and the executors. Listen, don’t interrupt, don’t be judgmental, and try seeing things from their point of view

3. Parents should draft an estate plan. If you pass away without a will, then all the decisions are left up to the state in which you reside. By drafting an estate plan, you can ensure the assets are divided the way you want.

4. Hire a financial advisor or other professional to mediate and facilitate these conversations. With an unbiased, objective financial advisor involved, you will be able to create a broad plan that covers everyone’s concerns.

5. Revisit your planIt’s important to revisit your estate plan when there’s new tax legislation or a change in your family situation — such as a birth, death, marriage, or divorce. Keep everyone up to date on these changes. 

Want to further discuss how to navigate difficult conversations about estate planning? Reach out to our team today, or attend one of our Conversation Circles, where we have authentic, personal conversations about money — beyond the numbers.

Policy News: Paycheck Protection Program Changes

Published in: Resources |

Since the March 27 passage of the Paycheck Protection Program (PPP) as part of the massive CARES Act, the Small Business Administration (SBA), which administers the program, has approved some 4 million loans totaling $511 billion through May 23. At that time, according to an article released by the AICPA, about $138 billion remained available for additional lending to small businesses. 

As with any government program that rolls out as quickly as the PPPapplicants reported numerous glitches and uncertainties while navigating the application process through their approved business lenders. Additionally, many questions surrounded certain aspects of the loan forgiveness provision, one of the principal attractions of the PPP. In its original form, the program offered forgiveness of the loan as long as at least 75% of the proceeds were used for payroll purposes (including certain employee benefit programs). But many small businesses and industry groups advocated for greater clarity in how the provisions of the loans would be interpreted and enforced. They also wanted to see some changes in the terms of the program. 

The Paycheck Protection Program Flexibility Act (PPPFA)

In response, the bipartisan Paycheck Protection Program Flexibility Act (PPPFA) of 2020 was passed by both houses of Congress and signed by President Trump on June 5. Reacting to advocacy by industry groups, the bill makes some significant changes to the existing PPP, including:

  • Extending the period of time for borrowers to expend the funds from eight weeks to 24 weeks, or December 31. Borrowers who choose to retain the eight-week period have the option to do so;


  • Lowering the requirement that 75% of funds be used for payroll purposes in order to receive forgiveness to 60%. However, the new law requires that the entire 60% be expended on payroll expenses in order to receive forgiveness; formerly, the amount forgiven was reduced by however much the expenditures were less than 75%;


  • Borrowers have the entire 24-week period to restore their staffing levels to pre-COVID-19 levels. Previously, the deadline was June 30;


  • The new program provides two exceptions by which employers can still achieve full forgiveness of the loan even if they do not restore their employment to pre-pandemic levels: In addition to previous guidance, which provided that employees who refused a good-faith offer to return to work at their previous wage levels could be excluded from calculations for forgiveness, the new law provides adjustments for employers who are unable to find enough qualified employees to reach pre-pandemic levels and also for businesses that can demonstrate inability to return to pre-pandemic levels of operation because of economic hardships imposed by the pandemic;


  • The repayment period has been extended from two to five years (still at a 1% interest rate);

The new law allows for delayed payment of payroll taxes.

There is also a new, 11-page application for loan forgiveness. Additional information is available on the SBA website here. 

These changes have been generally welcomed by industry observers. However, uncertainties still remain. In a June 8 interview with ThinkAdvisor, attorney Veena Murthy indicated that the SBA should clarify whether, in addition to retaining the eight-week period for expending loan funds, employers can also retain the eight-week period for completing the rehiring process. “If the point of the law was ‘flexibility,” she says, then keeping the eight-week period should mean the borrower can also keep other aspects related to that period on which they’ve been making decisions all along.” 

Additionally, questions have arisen about certain enforcement policies that will be used by the SBA. On June 1, the SBA released statement in the Federal Register stipulating that loans of any size may be audited at the SBA’s discretion. If the documentation reveals that the recipient may not be eligible for the program, for the loan amount granted, or for the amount of loan forgiveness applied for, the SBA can direct the lender to refuse the application for loan forgiveness. It is likely that this wording is intended to signal that the SBA will be on the alert for possible fraud and that borrowers with good documentation who made an innocent mistake in their application will receive the benefit of the doubt. But this still points to the importance of applicants maintaining complete documentation for both the application and the communications around it. We’ll be sure to update you with additional information that may be released regarding PPP changes, and how they may affect business owners specifically. 

An Operational Update

As you may know, offices in San Francisco have been given the go ahead to reopen, with certain safety and social distancing protocols in place. You will hear more from us on this issue in the coming weeks, but our reentry into our physical offices will be delayed for the time being. We are actively talking about this process and are trying to address certain obstacles — public transportation chief among them. While we are eager to work together in person again, our priority is the safety of our team and our clients. In the meantime, we will continue to be fully available via Zoom and online. Please don’t hesitate to reach out to us with any questions or concerns you may have about this, or any other matter.

Why Women Need a Will in Place

Published in: Resources |

It can be hard for everyone — both parents and children — to talk about wills, especially now during COVID-19 when stress and anxiety is so high. But it’s important to have this conversation. An estate attorney can walk you through the process of establishing a will, trust and other important estate documents.

What Happens When You Don’t Have a Will?: An Overview

If you’re a parent, the most important purpose of a will is that it enables you to designate a personal guardian for your children. Without a will, it’s up to a judge to appoint their guardian. The judge must always act in the best interests of the children and will do their best to learn about your wishes before making a decision — but when the wellbeing of your children is at stake, it’s worth saving them the guesswork.

When it comes to your assets, if you die without a will in place, they will be subject to your state’s laws of intestacy, which serve as default rules of distribution after death. Typically, these laws distribute property to your spouse and/or your blood relatives. While that’s all well and good for some, there’s a decent chance you won’t agree with some of the distributions your state directs. If you wish to provide some of your assets to an old friend, for example, or donate to charity, these distributions cannot be made without a will in place.

What’s more, if you have no surviving spouse or children, the intestacy laws will look to your next of kin to distribute property. If your only remaining family members are distant relatives, the state will view them as next in line to inherit your assets … and most people don’t typically envision their hard-earned savings going to their second cousin twice removed.

The Financial and Emotional Costs of Not Having a Will

Not having a will may actually be more expensive in the long run. Without a clear indication of your wishes, delays and legal costs are likely to add up as your estate makes its way through the legal system. Unfortunately, not having a will also opens the door to potential family disputes, further complicating the process and adding another emotional layer to what is likely already a difficult time for your family. 

You Can Always Change Your Mind

If you’re not familiar with the legal or financial world, the process of establishing a will can seem intimidating. Creating a will can also be daunting if you’re unsure of what kind of legacy you want to leave.

If you’re feeling indecisive, rest assured that your will isn’t set in stone until your death. You can always change your mind and create a new will in the future, which can supersede the old one. One way to get past paralysis in making such big decisions is to just think about what you want to happen in the next 5 years. That can make it less daunting for parents and make it easier for them to move forward.

If you have any questions about creating a will or updating your estate plan, reach out to our team today.

Week in Review: What We’re Watching in the Markets

Published in: Resources |

With jobless claims at the highest rate since the Great Depression and most health officials warning that the number of persons infected with the novel Coronavirus is still rising, it’s hard to understand why the stock market has climbed 7–8% during May (at this writing). And yet Wall Street continues to exhibit bullish sentiment after the COVID-19–fueled meltdown in March and early April as Washington continues to assert willingness to do whatever it takes to support the economy.

With all US states in the process of reopening their economies or, at the very least, easing restrictions imposed at the onset of the COVID-19 pandemic, the prospect of getting the US economy rolling again is also feeding into the optimism driving stock prices higher. Even New York Mayor Bill de Blasio, whose city was at the epicenter of the outbreak, has announced the possibility of a phased reopening in the early weeks of June. This news, along with gains in the recently battered financial sector, sent stocks soaring on May 27; the Dow Jones Industrial Average (DJIA) was up over 500 points and the S&P 500 closed above 3,000 for the first time since March 5.

The S&P 500 and the Nasdaq closed the week up +0.48% and +1.29%, respectively, while the DJIA ended the week -0.07% lower.

Finding the “Goldilocks Zone” as States Reopen

As states cautiously reopen their economies, the trick lies in achieving the “just right” balance between avoiding a damaging spike in COVID-19 infections and permitting revenue-starved businesses enough room to restart positive cash flows. In Alaska, where infection rates have remained relatively low, Governor Mike Dunleavy said at a May 19 news conference that as of May 22, “It will all be open, just like it was prior to the virus.” On the other end of the spectrum, California Governor Gavin Newsom has yet to announce an ending date for the statewide stay-at-home order, though some retailers, including clothing stores, florists, and bookshops, are being permitted to reopen for curbside delivery accompanied by physical distancing. Fifty-eight California counties are moving into “phase two” of the state’s reopening plan, and Newsom has said that houses of worship may admit 100 people or 25% of capacity, whichever is lower.

Closer to home, San Francisco Mayor London Breed announced the City’s reopening blueprint, a self-described phased and measured approach. As an aside, we will be using this plan and others to guide our decisions about the timing and nature of our own office re-occupancy.

The US Centers for Disease Control and Prevention (CDC) has released guidelines for businesses, schools, childcare centers, and mass transit systems as the country continues to move toward reopening. The 60-page document outlines a three-phase approach specifying gateways based on benchmarked decreases in infection rates, ER or outpatient visits related to COVID-19–like symptoms, and testing. Following the White House plan for “Opening Up America Again,” released last month, the CDC guidelines are intended to provide businesses and other organizations with responsible guidance as more Americans go back to work.

Global Economic Policy — and China

In recent days, Asian shares have been buoyed by news of government assistance as the Bank of Japan continues to provide stimulus aid for the country’s small businesses. European stocks will likely benefit from the May 27 announcement of a 750 billion–euro aid package designed to lift European economies damaged by the pandemic. But the biggest cloud on the international horizon is the sword-rattling over trade between the US and China. As the Trump administration offers a negative evaluation of Hong Kong’s economic autonomy in the face of increasing control from Beijing, the threat of a renewed trade war between the world’s two largest economies may continue to dampen investor enthusiasm.

As all these developments continue, we continue to recommend a measured approach to likely market volatility, combined with disciplined asset allocation and rebalancing as needed. If we can answer questions about your portfolio, the economic outlook, or the financial markets, please get in touch. We are here for you. Stay safe and be well.

Women Do Have Financial Confidence, Despite What the Stereotypes Say

Published in: Resources |

In the world of finance, women have long been depicted as indecisive investors, insecure about their financial knowledge and the decisions they make with money. But this is a myth — women don’t lack financial confidence. Here’s why.

Why the Myth Exists

We live in a culture that applauds people who speak and act authoritatively, don’t hesitate or mince words, and make decisions quickly (for better or worse).

While there are certainly women who embody these characteristics, there are many more who tend to think things through before they contribute to a conversation or prefer to gather more information before making a decision. This quality can be easily misinterpreted as a mark of indecisiveness and insecurity when, in fact, the woman who embodies it is simply taking time to reach a well-informed decision.

Research has shown that when complex situations present themselves, women are more likely to evaluate the nuances in the details, while men tend to focus on fewer pieces of data. As you can imagine, this often decreases the quality of the man’s decision-making process and boosts the quality of the woman’s.

Get Rid of the Unnecessary Jargon

Merrill Lynch recently pointed out that even among men and women with similar levels of financial knowledge, women are more likely to say they don’t know enough.

Many of our clients have walked into our office believing they were not adept at handling their finances when, in actuality, they just needed to have their questions answered in a straightforward and transparent way.

More Women Are Taking Charge in Money Matters

The good news is there are early indications that societal changes are improving women’s “confidence” around money, particularly in the younger generation because they are gaining more access to information.

Women ages 25–34 are more likely than their elders to report they learned about finances from one or both parents (62%, compared to 45% of older women), and over half (51%) say they are very confident in their investing skills.

This final statistic is in stark contrast to their elders: Only 36% of women ages 35–49, 14% of women ages 50-69, and 11% of women ages 70–84 said they feel confident in their investing skills.

So, how can we ride this new wave of financial confidence?

What's Behind the Confidence Gap?

Women are often cast as “timid, indecisive investors” when it comes to personal finance. But this couldn’t be farther from the truth. It’s time we broke these damaging stereotypes — and it’s time to own your financial power. #InvestLikeaWoman

Posted by The Humphreys Group on Tuesday, August 27, 2019

In Our Experience

Women often discount their financial savviness without considering areas of their lives in which they are already smart about money — family budgeting, volunteer work involving financial management, managing medical issues, and advocating for family members and loved ones.

Women are adept at picking up financial concepts if they are explained without unnecessary jargon or obscure concepts.

And if women are clear about their goals and values, they’ll find making decisions can be simple and straightforward. Once our clients have defined what matters most, decisions fall into place more easily. Aligning our financial resources with our highest priorities and values can provide relief and a sense of certainty.

Keep the Conversation Going at One of Our Circles

We regularly host Conversation Circles for women who are interested in straightforward and authentic discussions focusing on the non-numerical aspects of personal finance. Everyone is welcome — let us know if you’d like to be included in our next Circle!

Week in Review: What’s Happening in the Markets, the Economy, and on the Policy Front

Published in: Resources |

When we compare the beginning of this year to our current state, it’s hard to believe that so much can change in just a matter of months. It has been a little over four months since February 12, when we celebrated as the Dow Jones Industrial Average (DJIA) hit its all-time high of 29,551.42.

And then, the COVID-19 outbreak happened — and we all know what happened next, as March and early April brought some dark days for the financial markets.

Since then, it has been a rocky couple of months, filled with both ups and downs. This week proved that we know very little about what lies around the bend. After a period of remaining steadfast in the face of staggering jobless claims — which recently sent the unemployment rate up over 15% — all of the major indices struggled mid-week before making a comeback on Thursday, when the DJIA rose more than 300 points to break its three-day losing streak.

The markets closed the week with the DJIA +0.25% higher, the S&P 500 +0.39% higher, and the Nasdaq +0.79% higher.

The Economic Outlook: Preparing for What’s to Come, as States Move to Reopen

As some states move to reopen their economies, while others take a more gradual approach throughout the summer months, the nation is waiting with equal parts anticipation and anxiety to see when the economy will get back on the road to recovery.

When we look at the latest data, the effects of measures to stem the spread of COVID-19 are taking their toll. Weekly jobless claims rose by 2.98 million in the week ended May 9, which is slightly worse than what many had forecast. Total claims have now reached nearly 36.5 million over the past two months, which represents the biggest loss in U.S. history. What’s more, some economists have claimed that we haven’t reached the peak of unemployment yet.

But even though the big picture currently appears grim, some reports have indicated that re-openings and government relief programs could already be working for some sectors. In a recent interview with CNBC, Luke Tilley, chief economist at Wilmington Trust, said that the construction sector, for instance, which lost just under 1 million jobs last month, “… could see a boost in employment as restrictions are lifted for workplaces where physical distancing is easier.” It’s also a sector that could see a big boost from the Paycheck Protection Program (PPP), because construction firms may be able to easily meet the requirement to spend 75% of the loan on payroll costs to turn it into a grant. Other sectors could see similar strides.

Will the stimulus efforts by the government and Federal Reserve pay off? Will gradual re-openings help get the economy back on track? Only time will tell. In the meantime, the best path you can take is to maintain your current long-term investment strategy, and proactively communicate with our team on any changes in your financial life in light of the pandemic which may affect your plan. 

New Stimulus Package Proposal

On Tuesday, House Democrats unveiled a new $3 trillion stimulus package to combat the economic downturn caused by the COVID-19 pandemic. The bill, which Democrats are calling the Heroes Act, would be the largest relief package in U.S. history.

The bill would provide:

  • $1,200 to individuals earning up to $75,000 a year. These payments would also include immigrants and dependents ages 17 and over who were left out of the CARES Act payments.
  • $2,400 to married couples earning up to $150,000 a year.
  • $1,200 per dependent with a maximum of three dependents.
  • An extension of the $600-per-week unemployment benefit through January.
  • $200 billion in hazard pay for first responders and frontline workers.
  • $75 billion for increased Coronavirus testing, tracing, and isolation efforts.
  • $175 billion in rent and mortgage assistance.
  • $1 trillion for state and local governments.

Some lawmakers have argued that another stimulus package is not yet needed as states begin to partially reopen their economies. As of this writing, the House is expected to reconvene later today to vote on the legislation.

Social Security Proposal

The White House is reportedly considering a proposal that would allow struggling Americans to take an advance on their Social Security in exchange for delaying their benefits in the future. The payment — which reportedly will be up to $5,000 — would be structured as a loan with a government-set interest rate. Individuals who decide to participate in the program would pay that loan back when they start collecting their first Social Security checks. Their benefits would return to normal after the loan is paid off.

We’ll keep you updated on the latest developments from both of these proposals in the coming weeks.

Understanding Coronavirus-Related Distributions (CRDs)

Stimulus checks aside, the CARES Act also provides economic relief to struggling Americans in the form of Coronavirus-related distributions. Here’s a quick breakdown of what you should know:

What is a CRD?

A CRD is a distribution that is made from an IRA or employer-sponsored retirement plan to a qualified individual (more on this below) from January 1, 2020, to December 30, 2020. Qualified individuals are allowed to take up to $100,000 from all of their eligible retirement plans without incurring the normal 10% early-withdrawal penalty.

Do I still have to pay income taxes on a CRD? 

Unfortunately, yes, but the law allows the income taxes from these distributions to be spread out equally over a three-year period.

Can I repay a CRD?

Yes, the law allows qualified individuals to repay the distribution amount within three years from when the distribution was received. If you pay income tax on a distribution and then later recontribute the funds to an eligible retirement plan, you will be allowed to file an amended tax return to recover the taxes paid.

Who qualifies for a CRD?

Under the CARES Act, you are considered a qualified individual if:

  • You’re diagnosed with COVID-19 by a test approved by the Centers for Disease Control and Prevention (CDC).
  • Your spouse or dependent is diagnosed with COVID-19 by a test approved by the CDC.
  • You experience adverse financial consequences as a result of being quarantined, being furloughed or laid off, or having work hours reduced due to COVID-19.
  • You experience adverse financial consequences as a result of being unable to work from lack of childcare due to COVID-19.
  • You experience adverse financial consequences as a result of closing or reducing hours of a business that you own or operate due to COVID-19.

While a CRD can provide you with short-term financial relief during this ongoing crisis, an early withdrawal from your retirement plan should always be a last resort. Contact our team today if you feel you could benefit from taking CRDs; together, we can explore all possible funding options.

As always, we will continue to remain diligent about communicating the latest news, events, and updates you should know during this uncharted time. In the meantime, please don’t hesitate to reach out to us directly if you have concerns, questions, or want to discuss your financial situation. We will get through this, together.