Welcome to the Money Maven's Financial Blog

Money Maven Blog by Sheryl Sutherland, Authorised Financial Adviser and Director of The Financial Strategies Group

Recommended Reading

Recommended Reading by Sheryl Sutherland: Girls Just Want to Have Fund$ - Every Women’s Guide to Financial Independence, Money, Money, Money Ain't it Funny - How to Wire your Brain for Wealth, and Smart Money - How to structure your New Zealand business or investments and pay less tax.

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The Financial Strategies Group

Most of us spend 40 years working to secure our financial future; the most important investment you can make is to purchase appropriate financial planning advice.

Contact us for a review of your investments and insurances.

Begin to experience the serenity that accompanies financial responsibility and integrity: email sheryl@strategies.co.nz, call 0800 64MONEY or visit our website http://www.strategies.co.nz

Friday, 2 May 2008

Everyday Money

Everyday I read advertisements which urge me to get rid of my wrinkles, change my body shape or alter my bust size - and the options don't stop there. The advertisers want my discretionary income, my everyday money, to create a new and miraculously better looking person.

The amount of money we spend on skin care and cosmetic procedures (which seem to become weirder and weirder) is phenomenal. Global skin care companies boast science laboratories which are better funded than most universities. The cosmetics industry spends $15-16 billion a year in the US, making profits of around $1 billion annually, it is the seventh largest industry in spending money on advertising - higher than telephones, beer and airlines. The cosmetic surgery spend is around $10 billion a year.

Don't get me wrong I love makeup, fragrance and have no qualms about collagen but I am beginning to feel somewhat uneasy at the cult of beauty which wants an ever increasing share of my money.


Why do you need to understand economics and game theory? OK - a qualification, this could be useful information if you are concerned with the man drought. You need to think of the search for your man as a kind of auction. In this auction some of you will be more confident of your prospects than others. In game theory terms the first group would be "strong bidders" and the latter group "weak bidders." You would think wouldn't you that the "strong bidders" (good looking, intelligent, fertile, high earners) are more of a catch and would consistently win this kind of auction.

But this is not the case. In fact game theory predicts that auctions are more likely to be won by "weak bidders" who know that they can be outbid so will bid more aggressively while the strong bidders will hold out for a really great deal. This is even more important than you may think at first glance. The pool (or swamp depending on your mood) of appropriate men shrinks as the "good ones" are married off leaving a disproportionate number of men who are imperfect (short, broke, ugly, inept). And at the same time you have a pool of women weighted towards the attractive desirable "strong bidders."

The good ones are all married to women whose most salient characteristic is decisiveness.

Hazard warning; Game theory deals with how best to win the prize but it only works when you decide what it is that is worth winning.

Thursday, 1 May 2008

Who's Counting?

I have been counting the members of the National Academy of Sciences (NAS). This is an extremely elite and venerable American institution, membership in this academy is second only to winning the Nobel Prize.

The pool of scientists from which the NAS members are drawn numbers about 625,000. Academy membership (by invitation only) currently numbers 2,041. Of the 2,041, 200 are women. Women PhD's number 33% of all graduates. Even in science the old boys reign supreme.

As a P.S on this, the Chronical Review Report logged no posts in relation to this report. This appalling under-representation of women scientists is not remarkable enough to comment on? What do we need to do now? Chain ourselves to railings, slash paintings and break windows, burn our bras, march - oh wait but we've done that.

Musings and Amusings

As you know I am fascinated with the way our brains function. Human error is often written off as a momentary loss of concentration but it appears that a localised change in brain activity may be involved. The regions which seem to take over our brain function when we make mistakes are part of the so called "default mode network" which show increased use when people are resting or falling asleep. This set me musing of course - what would life be like if we could predict our mistakes and thus live an error free life? We may not be too far away from that reality. Small portable EEG monitors can be integrated into baseball caps. I think however, that the Brave New World be could a tad banal and sterile, a predictable uneventful world.


I frequently talk about the gender gap but here in the West maybe it ain't so bad? Despite the Prophet Muhammad's first wife supporting her husband financially, women in Saudi Arabia were legally required to conduct business through a male agent until 2004. Although that law has gone its ramifications live on, which makes the male dominated world of banking particularly hard to penetrate.

But on a positive note some forward thinking Saudi banks have set up ladies only branches which allow women to manage their finances independently of fathers, brothers and husbands. (There is no religious law banning women from managing money and laws based on Islam have guaranteed women the right to own property for centuries - unlike the West).

Increasingly wealth managers are realising that women in the Gulf region are sitting on fortunes in cash, land and jewellery. Western female bankers routinely travel to the Gulf to hold meetings with clients.

In the UAE (United Arab Emirates) a government holding company has set up an investment company run by women for women - who rightly scorn the "thinking pink" superficial changes.

I am almost jealous; I have spend a couple of decades trying to convince various players in financial services to market to and support women's investment and banking programmes to no avail. One estimate I read recently suggests that by 2010 half of all private wealth will be in the hands of women. Can't wait.

Finance and Investment

One of the issues I address when writing a financial plan is that of diversification. And by this I mean diversification across asset classes. Of late I have had numerous conversations with worried "property" investors. Without exception diversification has not been considered at all. The narrow investment schemes (not financial plans) all share the same features;

1) All of their money is tied up in property.
2) All their property is residential.
3) All their residential properties are in the same city (and sometimes even on the same section or street!)

But wait: there is more, they have used the equity in their own home to buy these properties. This puts their own home at risk. Property is cyclical, just as other asset classes are cyclical. Why borrow money, secured against your home, to make a risky investment. Depending on who you listen to the property market will cool by 10-30%. I see more mortgagee sales on the horizon that's for sure.