Women Need to Start Managing and Investing Money

Are women and men different? Of course. But, do the differences really matter when it comes to money?

Yes, according to Diana Lauck Cook, senior investment representative with Bank One Securities Corporation (BOSC) in Alliance, Ohio. Women fall far short of their male counterparts, especially regarding investments, Cook said.

Cook presents One Group Investors seminars titled “Investing in Your Dreams,” which are tailored especially for women. Cook said that while investing is important for everyone-she also counsels men regarding their finances-women not only lag behind men, but often fail to realize how important it is to catch up.

“Women live longer than men; women usually have less in their 401Ks than men; and although they often manage the family finances, they rarely know more than checking, savings and Certificates of Deposit when it comes to investing,” Cook said. “I enjoy delivering the presentation to women, because we need to get up to the same level as men.”

In other words, most women need to stop dreaming and start doing something about managing and investing money.

Cook, who has been with Bank One investments for eight years, said the primary motivation for most savings programs is retirement. Unfortunately, Cook said, “Most people put more planning into their annual vacation than they do into planning their retirement,” she said. If we don’t plan for retirement, it will remain just a dream.

“If you want to consider your retirement as one big vacation, think about that in terms of how much your last vacation cost,” Cook said. “Most people want to eat out, and go out, and travel more after they retire.” But few people, and especially few women, plan adequately to be able to follow their retirement dreams.

The harsh reality of the importance of saving and investing often hits home too late, for example, when a woman finds herself widowed. “A lot of people don’t realize that when a spouse passes, the survivor is instantly in a different tax bracket. The ‘single’ designation (when filing taxes) makes a big difference,” she said.

While many of her clients are fifty years or older, Cook said they can “catch up” on retirement savings with the right program and discipline. However, it’s wise to start planning as early as possible-especially when saving for other things in addition to retirement.

When it was announced last spring that the guaranteed fund of Ohio’s pre-paid tuition program would be closing, Cook said it forced some to consider other ways to save for college. For example, Cook pointed out that the federal 529 college plan offers different savings options than the Ohio Tuition Trust Authority (OTTA) plan.

Whether saving for a new home, college for the kids, or for your own retirement, one thing is certain. Dreams can serve as a starting point, but taking real action is the only thing that will put money in the bank.

Cook, who lives in Brimfield, can be reached at Bank One at (330) 829-3004 or at (330) 697-1489.

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Where to start?
Want to start saving, but don’t know how? Below, three steps to get you on your way.

Step 1: Get Started. Waiting until you have “x” dollars available, or until the stock market looks like it’s on an up trend, or waiting for anything is simply a mistake-a costly one. On the other hand, once you’ve started, you’re on your way to realizing your savings goals.

Step 2: Put your goals in writing. Very few people have a clear idea of what they already have in terms of savings and investments; fewer still know what they need to meet their goals. To understand where you are and what you need to achieve your goals, draw a simple three-column chart. Label the columns “short-term/available cash” “mid-term/income accounts” and “long-term/growth.” Under the first column, list your immediate needs and goals for the next five years. This might include a new car or a special vacation. Then, list the resources you have readily available: checking, savings, and money market accounts, mature certificates of deposit, and so forth. (Mid-term resources include bonds, annuities, or CDs that will mature in the next 5 – 10 years; long-term resources typically include stocks, mutual funds and 401K accounts.) Next, do the same for the other columns, listing under each your current resources, goals, and what you need to meet them. If, for example, you want to contribute to a grandchild’s college education, you might write: “need $5,000 per year available for four years, beginning 2012.” That’s a specific target.

Step 3: Allocate your resources. In real estate it’s said that the three most important factors are location, location, and location. In investments, the same might be said for allocation. Simply put, allocation means not putting all of your eggs in one basket. Most investment experts agree that 92 to 94 percent of your investment success depends on allocation, while only four- to six-percent is determined by timing (when you buy or sell).

Then what?

If you’re not sure what to do after reviewing your three-column chart, consider meeting with a financial planner. Most large banking, insurance, and brokerage firms offer financial planning services free to their customers. So, call your banker, your insurance agent, or another financial professional you have previously worked with and ask for help in reviewing your portfolio and your goals. Alternatively, a private financial planner may also help you. Just be aware that they charge for their services, as do attorneys and other professionals. Since you’ll be paying the fee, ask up front about what you can expect from their services.

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