Investing For Yourself, Your Family & Future: Financial Experts Discuss How Women Can Get Ahead

At an insightful conversation hosted by Viva and Milford, financial experts discussed how women can get ahead, grow and plan for the future.

Financial literacy has a huge impact on our lives, no matter how different our personal circumstances. Whether you share money with a partner, divvy up household expenses or you’re looking into a house purchase, there’s a diversity of reasons to upskill. This is why Viva partnered with Milford to put on Women & Wealth: Investing For Yourself, Your Family & Future, an inspiring event held at Hotel Britomart in July.

BusinessDesk reporter and host of the Cooking the Books podcast Frances Cook hosted a panel of Milford’s finance experts as they dissected the obstacles women face when it comes to getting ahead financially, and shared personal insights and expert knowledge around savings and investments. Attendees were then invited to ask questions of the experts and chat, all part of the importance of breaking down the social taboos around money discussions.

Make Your Money Work

Women face a number of challenges when it comes to creating and growing wealth — including fewer years in employment (often due to being their children’s primary caregiver), pay disparity and bias. And while a younger generation of women are becoming more open to starting an investment journey, there’s still a long way to go to catch up to men, said panellist and Milford private wealth advisor Kate Tyro. Many women feel under-confident with money, or they’re used to their husbands looking after the finances — this is despite women generally being less impulsive around investing than men and more likely to follow professional advice, she said.

“Women actually know just as much as men about investing but there’s a perceived gap [in their knowledge],” explained Kate. “Often they think it’s harder than it is. This is where professionals can help with the right strategy.”

Investing wisely can not only provide stability, level the playing field and challenge the status quo, but give women a step ahead, equipping them with wealth, control and empowerment.

This is vital, as women tend to live longer than men, pointed out panellist Ayesha Scott, a senior finance lecturer at the Auckland University of Technology business school. “We need more money to look after parents, children or extended whanau. Having that peace of mind can’t be understated,” she said.

Getting started is often the hardest part, with many fearing investing is a complicated business that can take up too much time, but there are many ways to make investing easier. Seeking out the right companies to invest in is a start. Breaking this process down, panellist and Milford sustainable investment analyst Grace O’Hanlon described it as investing today in a company that will be worth more in the future. “It’s seeking out a quality company that creates value for the customer, and the business, and me, [the investor], as a shareholder.”

Investing can be as complicated as you want it to be, she added, but it could help to embrace your own knowledge and interests, when beginning to seek quality companies to invest in. Ultimately, most people want to invest in companies that align with their personal values.

KiwiSaver is another important tool the panellists discussed, as women often default to conservative investment strategies that could be preventing them from maximising their gains; likewise, the pay gap often means women wind up with less savings than men. This means it’s even more important to look outside of KiwiSaver when it comes to your investment strategy. It can be invaluable (and save a lot of time) to engage an experienced fund manager, Grace explained, as this is what they live and breathe.

Relationships & Money

Despite relationships having the capacity to greatly impact our future wealth, we often avoid having discussions about money with our loved ones. But with the gender gap a persistent issue for women and particularly women of colour, it’s important we don’t shy away from these conversations, explained Ayesha. “It’s simplistic to assume everyone can have conversations about money safely,” she said. Yet such conversations need to be normalised in the family home in order for the next generation to learn about finance, too.

Likewise, women often find it helpful to talk through their decisions and considerations with trusted people such as friends and family, said Kate, using them as sounding boards to compare what they are doing. This is also important when it comes to intergenerational wealth. The importance of understanding our finances is compounded by the fact that 80 per cent of women end up on their own later in life, whether due to divorce or because they have outlived their male partner.

Panellist and lawyer Juliet Moses, a partner at TGT Legal, cautioned that it’s not uncommon for women to find themselves blindsided by their partner’s financial infidelities, which can lead to unnecessary and often expensive litigation. “Make it your business to know what is going on,” she said. “Find out how property ownership is structured, where things sit. Ask questions. Be involved.”

If couples are planning on investing together, it’s important to recognise each person’s risk tolerance so a happy medium and sense of shared responsibility can be reached.

“Often there’s no input from one side of the relationship,” Kate said. “That’s where things can go wrong. You do need to have that input. It will make a difference.”

Communication is key but when a couple finds itself in conflict or the height of emotion, engaging a financial expert can be helpful, as they can remove the emotion from the investment equation, she explained.

Finding & Funding Security

Later life comes with its own set of challenges, and during the final segment of the event, the panellists discussed funding retirement, wills and trusts, divorce, and caring for others and yourself.

It pays to ensure plans are in place to ensure a trusted family member has enduring powers of attorney to make decisions on your behalf, recommended Juliet, especially if we find ourselves without the capacity to deal with our finances due to physical or mental illness.

She also insisted on the importance of a will, preferably one drawn up with a lawyer, (as opposed to a DIY form downloaded from the internet). Trusts are another valuable and reliable way to protect our assets, she said, despite rule changes making them somewhat less popular recently.

“They’re a way of ensuring orderly transition of assets to children or whoever you choose,” she said. Relationship property agreements (similar to a prenuptial agreement that determines what happens if a couple separates or one person dies) can also be useful and can be acquired at any time.

Is there a certain amount we should all be investing? Frances put this to Kate, who said it comes down to what you want to be doing in your retirement. She cited a Massey University study that found people who live alone in the city can cover expenses with just over $40,000 per annum. From there, it’s about lifestyle objectives.

“How much do you want to travel? Money can’t buy happiness but it can buy choices. Where will your kids live? It may be overseas. Basically the more the better. But $40-60K gives you more options. To work off a conservative rule of thumb, taking drawings from your investment of four to five per cent per annum, you can comfortably sustain your capital. That means you’ll want $800,000 invested.”

In other words, wealth planning can provide security, particularly when combining KiwiSaver investments with a wider investment strategy. Savvy investments established now can ensure not only a comfortable but flourishing retirement, grow your wealth, provide security for future generations, and future-proof investments in a rapidly changing world — and talking options through with an expert advisor can help you make those important decisions.

Watch the full panel discussion above now. To discover how Milford can help you grow your wealth, visit Milfordasset.com.

This article does not take into account your investment needs or personal circumstances. It is not intended to be viewed as investment or financial advice. Past performance is not a reliable indicator of future performance. Investment involves risk and returns can be negative as well as positive. Milford Funds Limited is the issuer of the Milford KiwiSaver Plan and Milford Investment Funds. Please read the relevant Milford Product Disclosure Statement at milfordasset.com. Before investing you may wish to seek financial advice. For more information about our financial advice services please visit milfordasset.com/getting-advice.