{"id":22191,"date":"2024-03-07T01:29:34","date_gmt":"2024-03-07T00:29:34","guid":{"rendered":"https:\/\/londoncult.co.uk\/?p=22191"},"modified":"2024-03-07T12:50:53","modified_gmt":"2024-03-07T11:50:53","slug":"shes-on-the-money","status":"publish","type":"post","link":"https:\/\/londoncult.co.uk\/en\/shes-on-the-money\/","title":{"rendered":"She\u2019s On the Money"},"content":{"rendered":"
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Unsplash<\/figcaption><\/figure>\n

These <\/span>days<\/span> like many couples <\/span>my <\/span>lovely h<\/span>usband and I both work <\/span>\u201c<\/span>from home<\/span>\u201d or \u201chybrid\u201d (whatever that is)<\/span>. Whilst<\/span> my<\/span> husband retreats to <\/span>the<\/span> office to his supposedly \u2018uber important\u2019 conference calls (code name for peace and quiet), we <\/span>women <\/span>are meant to drop our own business, cook and clean, order the next supplies online for the hostile tribe to eat and <\/span>be a taxi driver for kids<\/span>.<\/span><\/p>\n

For example, many women occupy themselves with children and elderly parents and resolving a balancing act of working whilst being a home-maker and carer. Also, I personally have quite a few friends, who after spending years looking after children, come out unexpectedly worse in a divorce. Having little knowledge of the family assets and often discovering unexpected debts incurred during marriage can create a very bad situation. Others have the responsibility for resolving the aftermath of the death of loved ones and dealing with bad estate and inheritance planning. We are fortunate enough to be destined to live longer than men, but save very little and inefficiently for our pensions. <\/span><\/p>\n

Many of these financial problems either seem remote and far in the future or are viewed as low probability and simply insurmountable. Often the best option seems to be to just put our \u2018head in the sand\u2019 and ignore the issues. \u00a0However, with some foresight, planning and expert help, quality, efficient solutions are possible.<\/span><\/p>\n

Mind the Gap<\/span><\/strong><\/p>\n

The so called \u2018gender gap\u2019 in salaries is well documented and appears in every major newspaper with good controversial headlines on a regular basis. It is a known fact that women earn less than men on average. However, less discussed is the resulting gender \u2018savings gap\u2019. <\/span><\/p>\n

Women today can expect to live several years longer than men and yet they on average have one third of the men\u2019s level of pension savings at the age of 60-65. This gap is both a combination of lack of pension contributions due to lower earnings over a shorter period of time (due to child career breaks) <\/span>and, as some studies suggest, that we have more risk adverse behaviour to investing. Obviously the first point is true but are we really naturally more risk adverse investors?<\/span><\/p>\n

Undoubtedly, women often have a myopic view on savings. I mean who thinks to save and invest when we are working, cash is flowing in and retirement seems a million miles away? However, in case you didn\u2019t realise the state pension in UK is a measly \u00a3<\/span>203.85<\/span> per week (in 20<\/span>24<\/span>) and payable only from 6<\/span>6<\/span>. This is presumably okay for scraping by eating beans from tins from the corner shop but to have a decent standard of living in retirement it is estimated that we require on average \u00a327,000 in today\u2019s money each year. The \u201ceach year\u201d bit is important since we might live a very long-time past working and beyond 6<\/span>6<\/span>. <\/span><\/p>\n

It may be that you have some private pension plans from previous employers. Very often we lose track of these when we go on maternity leave, career break or simply change jobs. But unless you can still remember to review these on regular basis, you are most likely invested in \u2018default\u2019 or misnomer \u2018lifestyle\u2019 funds that will not provide sufficient returns to provide any great lifestyle in your retirement. Evidently, there is a worrisome gap between the state <\/span>pension and what we need to retire comfortably that needs bridging. This requires savings and some clever financial planning for the future. Solutions could include aggregating suitable smaller personal pensions or investing in funds that may provide returns to achieve our financial targets.<\/span><\/p>\n

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Seoul, South Korea – 20 February 2023: Shop signage of BVLGARI in Incheon International Airport. It is a Greek-Italian luxury fashion house.<\/figcaption><\/figure>\n

Budgeting with Bulgari<\/span><\/strong><\/p>\n

The first step on the road to financial health is budgeting to free up cash to enable regular saving. Managing cashflows and balancing income and expenditure is very important. <\/span><\/p>\n

It does not help that fusty academics love to scrutinise ladies\u2019 shopping habits and examine the myths that we cannot control ourselves when confronted with a well-stocked shopping mall. Their obvious key findings are always the same: for women shopping is an exciting, emotional experience and considered a pastime whereas for men shopping is a mostly boring utilitarian necessity. <\/span><\/p>\n

Although I agree that women like to spend money on beauty products, treatments, spa days and hair styling which we justify as costly but indispensable, I can give the same critique to the spending of men. For example, new cars lose money very quickly in the first few years but jewellery from historically well-established brands can be a decent investment over the long-term. This often proves a good argument at Bulgari Heathrow Terminal 4 when I remind my husband how much his once shiny new German car has declined in value.<\/span><\/p>\n

Lastly, in our budget we should never ignore those good old Government \u2018freebies\u2019. I am always surprised by a lack of awareness of possible government contributions to our finances and how they are accessed. Deciphering and interpreting the eligibility criteria for various benefits hidden within badly worded guidance on obscure government websites is stultifying boring. However, depending on circumstances, childcare costs can be defrayed, state pension contributions covered and even Lifetime ISAs that receive a 25% government bonus exist. <\/span><\/p>\n

The landscape is always changing but the key take-away is that we must always verify and optimise the government allowances and benefits whatever your income and financial situation.<\/span><\/p>\n

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Unsplash<\/figcaption><\/figure>\n

Investing with Einstein<\/span><\/strong><\/p>\n

Almost three times as many men have stocks and shares ISAs as women. It is startling that women generally prefer the safety of cash or low interest-bearing deposits and miss out on the long-term growth and dividends of investing in equities. <\/span><\/p>\n

Unfortunately, most of the financial literature of funds, even by the largest fund managers, is targeted at men and written in a style that appeals to the male mind-set. This has not helped educate women to navigate the jargon rich world of financial instruments most of which can seem intimidating for the uninitiated. To tell you a secret, I have found that if most men don\u2019t understand what a corporate bond, commercial property fund, derivative, future or option is, they will feign knowledge and not reveal their ignorance. Studies have shown that women that are more investment savvy out-perform men, since they are more likely to stick with a stable long-term investment strategy and avoid taking \u2018punts\u2019 on risky but exciting bets like men. <\/span><\/p>\n

Usually nothing in life is truly free but in investing there are actually two massive \u2018free lunches\u2019 that you must exploit. The first is the \u2018exponential power of compounding\u2019, by reinvesting returns over long periods of time huge increases in profits can be made. Even Albert Einstein supposedly said \u201cCompound interest is the eighth wonder of the world. He who understands it, earns it. He who doesn\u2019t, pays it.\u201d Actually, I don\u2019t know if he did say this, but compounding is a mathematical wonder ignored by short-term investors. For example, investing \u00a3100 per <\/span>month with 5% per year returns provides almost \u00a360,000 over 25 years which is much more than you would expect. \u00a0<\/span><\/p>\n

The second, \u2018free lunch\u2019 is something called diversification. If we invest in shares in just a few companies we are exposed to a large amount of risk from the performance of the companies themselves. But if we cleverly invest in hundreds of companies or indeed many different \u2018asset classes\u2019 such as government bonds, corporate bonds and property we can dramatically reduce the risk of our investment while preserving total returns.<\/span><\/p>\n

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Unsplash<\/figcaption><\/figure>\n

Lattes versus Protection <\/span><\/strong><\/p>\n

A regular financial planning can prepare us plan for those rare events that can turn our lives upside down. Although the emotional impact of losing a relative or having an accident cannot be avoided many of the financial aspects can be mitigated. Some relatively unknown insurances can be highly beneficial and cost effective. For example, term sickness insurance that can guarantee us an income if we are too sick to work can cost not much more than a couple of lattes a month. <\/span><\/p>\n

Lastly, the rise in property values over recent years has placed many families in the scope of the beady-eyed HMRC for inheritance tax. The reality is that inheritance taxes are almost voluntary and for the ill-prepared since with readily available tax planning strategies, that don\u2019t cost a fortune, much IHT can be reduced. <\/span><\/p>\n

Here to help<\/span><\/strong><\/p>\n

Personally, I am very grateful to have been given opportunities in life, including growing my financial knowledge during the past 1<\/span>8<\/span> years of my financial career. And I feel passionate about sharing this knowledge with any woman who is interested in learning more about building their very own financial freedom.
\ntatiana.bateson@gmail.com
\n<\/span><\/p>\n

\n","protected":false},"excerpt":{"rendered":"

A few days after Christmas and a few too many roast dinners has finally given me the impetus to pen a few words on a subject I am passionate about, the world of women and our approach to everyday finances. Many of us overlook that our financial health is an important contributor to our overall long-term emotional and physical health. As a working mum with 4 bored children wrecking the house, the current situation has made me realise the extra burdens and stresses placed on women.<\/p>\n","protected":false},"author":76,"featured_media":22176,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[144,84],"tags":[],"type_post":[],"column":[],"class_list":["post-22191","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-lifestyle","category-people"],"_links":{"self":[{"href":"https:\/\/londoncult.co.uk\/en\/wp-json\/wp\/v2\/posts\/22191","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/londoncult.co.uk\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/londoncult.co.uk\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/londoncult.co.uk\/en\/wp-json\/wp\/v2\/users\/76"}],"replies":[{"embeddable":true,"href":"https:\/\/londoncult.co.uk\/en\/wp-json\/wp\/v2\/comments?post=22191"}],"version-history":[{"count":0,"href":"https:\/\/londoncult.co.uk\/en\/wp-json\/wp\/v2\/posts\/22191\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/londoncult.co.uk\/en\/wp-json\/wp\/v2\/media\/22176"}],"wp:attachment":[{"href":"https:\/\/londoncult.co.uk\/en\/wp-json\/wp\/v2\/media?parent=22191"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/londoncult.co.uk\/en\/wp-json\/wp\/v2\/categories?post=22191"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/londoncult.co.uk\/en\/wp-json\/wp\/v2\/tags?post=22191"},{"taxonomy":"type_post","embeddable":true,"href":"https:\/\/londoncult.co.uk\/en\/wp-json\/wp\/v2\/type_post?post=22191"},{"taxonomy":"column","embeddable":true,"href":"https:\/\/londoncult.co.uk\/en\/wp-json\/wp\/v2\/column?post=22191"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}