There’s an old proverb that says, “If you want to go quickly, go alone. If you want to go far, go together.” I appreciate the simple truth of this, yet I can’t embrace the “either/or” premise. I don’t know about you but I need to do both: go fast and go far!
If you’re a woman, you probably do too and here’s why:
Because we are women, we have earned less over our entire working career. This is not new information but it still pisses me off. We’ve only earned 72 cents for a man’s dollar, year after year, decade after decade. The disparity is even worse for women of color and LGBT folk.
Since we’ve earned less, we have fewer of those “matching funds” from our employers. This means we have been under invested throughout our lives. (Not to mention Social Security but really, who’s actually counting on that anymore?)
Did you take some time out of the workforce to raise kids or care for aging parents? Fewer dollars still-
As a woman, you will require more healthcare dollars in retirement than men do. (What can I say—medically speaking, women are complicated beings and even more so as we age).
If you’ve married a man, statistically it’s likely you will outlive him by 7-8 years.
So in summary: we’ve earned less money, we’re chronically underinvested, we’ll need more health care dollars in retirement and oh by the way, we need our money to go further too.
Did your Financial Planner ever have that conversation with you? Mine never did—it was all pie charts, dollar cost averaging, monthly saving goals and retirement fund targets. And oh yeah, let’s not forget the fees. So many fees….
When I was in my early 20’s, I became intrigued with the stock market and the prospect of how to build wealth. Since I grew up in a working class household, raised by Depression-era parents, the very idea of investing was far from our kitchen table conversations. My parents wanted me to be secure, their best financial advice was “get a steady job with good benefits.” That was it. They grew up in the wake of tremendous economic loss, and each of their families had heartbreaking stories of financial devastation and loss. They wanted to protect me from such suffering and hoped their advice would lead me to greener, more secure pastures.
But it’s no longer 1951, 1964 or 1982—the Gig Economy is alive and well for some and underpaying for most. Those generous job-related, defined-benefit retirement plans my parents hoped for me—those are ancient history.
So now what? Well in my case, I assumed that working as a physician would provide more than enough income and allow for me to “catch up” on my retirement goals. Since I was putting myself through college, my trajectory was rather circuitous—not to mention expensive.
I’ve had many consultations with various advisors over the years and they were always the same; a colorful pie chart, a pitch for mutual funds and ETFs, talk of dollar cost averaging and finally, the formula which explained I was woefully behind in my quest to attain that mountain of retirement money. The typical Wall Street model is that retirement will require some huge fund of money so that later, you can make monthly withdrawals for living expenses, while paying fewer taxes because you’ll be in a smaller tax bracket. They all stressed how their investment strategies would help me catch up and be on target for my own retirement. The plan was always a “set it and forget it” approach with a 30-yr plus horizon and of course, all the fees would be deducted from my account, nothing to worry about.
Have you heard that phrase, “pick your poison”? I drank the Wall Street Kool-Aid. Did you?
Why I Broke Up With Charles Schwab and Merrill Lynch
I kept reading and learning about financial literacy beyond the stock market, and I started to learn how to invest better with consistent, secured returns. I no longer worried about Wall Street because I learned how to invest in Main Street. Not just how to retire comfortably, but how to build real wealth over time, for myself and my family. Now I know how to make more money, pay fewer taxes, have greater security and achieve financial independence without Wall Street.
So here’s the good news; that retirement fund mountain of money is the wrong paradigm, the absolute wrong model. Wall Street wants us to invest in a way that makes them money, repeatedly, via fees. These are not insignificant fees either. Check out what John Bogle, the founder of Vanguard told Congress:
Spoiler alert: Over time, typical mutual fund fees would eat up 80% of the money I accumulated for retirement, and I would be left spoon-feeding myself monthly amounts to live on. No thanks—I know better now. Stick around, I’ll show you how.
I hope this helps to get you thinking…