facebook twitter instagram linkedin google youtube vimeo tumblr yelp rss email podcast phone blog search brokercheck brokercheck Play Pause
Invest Like A Girl, Your First Planning Question And College Savings Vehicles Thumbnail

Invest Like A Girl, Your First Planning Question And College Savings Vehicles

Patience is a virtue. When it comes to investing, that’s why women more often do better than men. 

As more women achieve higher positions in the work place, gone are the days that only one spouse makes the financial decisions. Still, many women feel they are not treated equally. According to a study by Boston Consulting Group, women participants complained that they received dumbed-down financial services because of their gender.

Indeed, women tend to be much less confident than men about investing, but when they do invest, they achieve better results, thanks to biology and psychology.

Women are More Patient Investors

Studies of gender differences in investment behavior show that women outperform men in investing because they are more patient investors. They commit to their investments. Instead of trying to chase the market, women tend to invest with a “buy and hold” strategy, allowing them to reap the benefits of staying the course with their financial plan. In the long term, women are often more successful.

A study by Vanguard, the mutual fund company, found that during the 2008 financial crisis, men were 10% more likely than women to sell stocks at market lows. A University of California study found that female investors beat men by 1.4 percentage points because women trade less often.

“The way women tend to approach investing is healthier and calmer,” LouAnn Lofton, author of Warren Buffet Invests Like a Girl - And Why You Should, Too, writes. “Testosterone can help traders take risks and move fast, making loads of money in the meantime. But too much testosterone for too long can encourage too much risk taking.”

 Women Think Big Picture

Women also tend to plan for the bigger picture. A Charles Schwab study, “Women and Financial Independence,” found that 88% of the surveyed women want financial professionals to consider their complete financial situation, not just their investment portfolio.

Behavior can be a key component to having a successful financial plan. So instead of focusing on the differences between how men and women invest, why not learn from each other the good investment behaviors that may lead to achieving long-term goals. Investing “like a girl” can be an  advantage.


When you start formalizing what to do with your money, what should you think about first? Determining what will matter most to you at different stages of your life is crucial to developing a financial plan. Not everyone has the same opinion or values: One person’s forgettable toy is another’s indispensable treasure.

 For instance, you most likely know of a child that has a possession that they could not live without. Maybe it  was a baby doll that in good times and bad, the child looked for this doll to carry. So much so that on vacation the doll made the short list of allowed items when traveling on a plane.

As most parents can probably relate to, this doll was critical to the child’s happiness, and therefore, a significant item for everyone’s much-needed sleep. In many ways, the  piece of plastic with pretty little eyes may have mattered more to  the parents than a good suitcase.

Risk & Contingency Planning

But taking the doll to Disneyworld could turn out to be a far riskier task than envisioned. Imagine inadvertently leaving the doll in the hotel room after check-out and, after many frantic calls to the hotel, learning that it was nowhere to be found.

In most cases, in typical Disney fashion, a package will arrive a few days later with a small stuffed Mickey Mouse to ease the child’s pain. But as much as the child might love Mickey, though, their true love remained missing.

Vanished toy, miserable child, busted nights: If you’re a parent, you can easily picture this.

The parents might do what any sleep-deprived parents would do and head to the toy store to find the same doll. And if they’re lucky, they will find the same doll and maybe purchase not one but two of the same dolls. That way they can keep the spare doll hidden just in case of another catastrophe of absent- mindedness. In financial advising, we call this contingency planning, or maybe a kind of emergency savings fund.

This toy mattered to the child – and, as with most toddlers, the child didn’t consider the favorite item interchangeable. You cannot substitute Mickey Mouse or anything else for a cherished doll.

Fast forward 25 years later and the child lives day to day without the doll. The things that matter most to all of us change as we grow and enter different stages of life.

What’s Your Doll?

In your 20s, your passion may be traveling or exploring different career paths. In your 30s, your heart may swell with thoughts of buying a home and beginning a family. Your 40s may see college expenses and helping your own parents as your dear causes.

Let’s hope that amid all these changing desires, you plan and save for your own retirement.

Determining what matters most to you matters a lot in turn to your financial planning – and in fact is the first step. Issues and challenges might be similar person to person, but your specific needs are paramount to making and monitoring the progress of your plan. You may also address your needs in the order that you meet or feel them in your life.

So what do you value most and how are you going to pay for your future needs? Your answer starts you on the way to putting together a uniquely tailored money plan for the  rest of your life.


You just received the wonderful news that you and your spouse are going to become parents. Thoughts of the many adventures parenting will bring are swirling through your head. The last thing on your mind may be paying for college, but thinking about it now may save you later. The cost of a four-year degree at a private college can easily approach $200,000 – that’s not a typo.

However, even if you are aware of the importance of saving for an education, you may be unsure of available options. The following is an exploration of the most common college savings vehicles:

  • 529 Plans. 529 plans come in two forms – prepaid tuition plans and college savings plans. Prepaid tuition plans allow you to buy future tuition at today’s prices. College savings plans, on the other hand, offer tax benefits and a variety of investment options. Earnings grow tax-deferred and qualified withdrawals are tax free. Nonqualified withdrawals are subject to income tax, as well as a 10% federal income tax penalty. Prior to investing in a 529 Plan investors should consider whether the investor’s or designated beneficiary’s home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in such state’s qualified tuition program. Withdrawals used for qualified expenses are federally tax free. Tax treatment at the state level may vary. Please consult with your tax advisor before investing.
  • Coverdell Education Savings Accounts. You can contribute $2,000 annually and funds may be used to pay for elementary and secondary education, in addition to college expenses. One major advantage of Coverdell ESAs is that if the funds are used to pay for qualified education expenses (e.g., room and board), earnings will not be taxed. Certain income limits may apply. 
  • Series EE Savings Bonds. These types of savings bonds are issued in denominations ranging from $25 to $10,000, but the only way to buy them is in electronic form via TreasuryDirect. Electronic bonds purchased via TreasuryDirect are sold at face value– in other words, you pay $25 for a $25 bond. At 20 years, that bond will be worth twice what you pay for it. However, minimum term of ownership is 1 year and early redemption penalties may apply if the bond is redeemed in the first five years. Go to the Treasure website for more information.
  • Uniform Gifts to Minors Act (UGMA) and Uniform Transfers to Minors Act (UTMA). UGMA and UTMA accounts are custodial accounts. You may make unlimited contributions to such accounts, and the funds may be used for whatever purchases you deem appropriate. Contributions are not tax-deductible, however, you can give up to $15,000 (2021) per year ($30,000 for a married filing jointly couple) without incurring federal gift tax.

The UGMA account is particularly useful if you are considering purchasing stocks or mutual funds for your child to help save for education. More specifically, UGMA typically authorizes the transfers of cash, bank accounts, stocks, and mutual funds to minors without the need for an attorney; an UTMA account authorizes expanded transfers, including real estate, and royalties. For both UGMA and UTMA accounts, a portion of the earnings may be tax free or taxed at the child’s rate, generally a lower figure.

The last option you might consider when saving for your child’s future education may be a simple bank savings account. Although bank savings accounts may offer immediate liquidity and versatility, there are no tax advantages, and given their low risk, the earning potential is very low. Therefore, when it comes to saving for education, it may not be the most beneficial choice.

But if you are wondering whether there is such a thing as saving for your child’s education too early, the answer is, no. Regardless of which option you choose, beginning today to save for a child’s education could help ensure your child a more secure tomorrow. 

Women & Financial Professionals

Right now in 2021, women are under-served by the financial services industry, because there is still a huge disconnect between the women who have a financial professional and the women who want one. Consider this: the Center for Talent Innovations reported that 75% of women under the age of 40 do not have a financial professional.

Why is it that so few women get the advice that they need? It could be that the disconnect lies in the fact that between 15-20% all financial professionals are female, according to Barron’s. I believe that women want to work with a financial professional, but are not connecting to those out there because the vast majority of them are males.

Now, this is not to say that women should only work with female financial professionals, but in some cases men do not communicate with women effectively (of course it’s true the other way too). But a survey by Boston Consulting Group found that 70% of women that do have financial professionals felt that they were patronizing or disrespectful toward them. The study showed that these financial professionals (who statistically are mostly male) made assumptions about women’s risk tolerance and therefore limited their clients’ investment options.

These miscommunications are likely the main reasons there is still a giant gap between the women who have a financial professional and those who do not. This is especially surprising because Fortune recently reported that women  control about $14 trillion in the United States, the equivalent of the combined gross domestic product of China and India.

The good news is that the financial industry realizes that it ignores women, who are responsible for more than 80% of financial household decisions, at its own peril. We are seeing a huge movement of professionals that want to be more responsive to their female clients.

The industry finally realizes how much power women truly hold. Women have the power and ability to effect a lot of change in the world, especially since they now control so much of America’s wealth.

If you are among the 75% of women who don’t have a financial professional, don’t let your fears about feeling judged and misunderstood stop you from getting advice to help you work towards  the financial life of your dreams. You can seek out someone who does understand where you’re coming from. You can find a financial professional you can relate to and feel comfortable with, and who doesn’t make you feel stupid for asking too many questions about your financial  goals and concerns.

Talk to your family, friends and colleagues. Get recommendations and then interview financial professionals  until you find the right fit.


Three of the biggest potential mistakes that women can make is 1) not investing like a girl; 2) not asking themselves what they value most; and 3) not saving for their child’s education early. Failing to do any of these not only has the potential to make you feel vulnerable financially, but it may also expose you to greater risk. And it doesn't matter whether you are the CEO of your  own business, the CFO of your family, or both.

Don't let the summer pass by without finding a financial professional so you can take control of your financial life.

The information contained in this newsletter is for general use, and while we believe all information to be reliable and accurate, it is important to remember individual situations may be entirely different. The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. This newsletter is written and published by Financial Media Exchange LLC., Plymouth, MA. Copyright © 2021. All rights reserved. Distributed by Financial Media Exchange.

Important Disclosures

Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments. 

All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy. 

This article was prepared by FMeX. 

LPL Tracking #1-05161696


Check the background of this firm/advisor on FINRA’s BrokerCheck.