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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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Thursday, 21 January 2010

Who's Counting

According to a recent blog on fortune.com, Sharon Meers is.

Meers co-wrote a book called Getting to 50/50. Lots of fascinating stats, but some of the most intriguing revolved around the male-female balance of work at home. Meers mentioned that when couples share housework, the risk of divorce drops.

Divorce risk drops sharply when the wife has a job. The ideal set-up is when the man earns 60% of the income and does 40% of the housework. That’s when divorce risk is lowest of all.

(The sex is also better then, by the way. When men do substantial housework, couples have more frequent and satisfying sex. Meers shared this factoid privately, and she lays it all out in her book, in a section called “When He Does Windows...”)

And where in the world do men do the most to help their wives at home? Meers doesn’t have those stats, but I found them, coincidentally, yesterday in a preview of another book due out in September, Women Want More, by Boston Consulting Group senior partner Michael Silverstein, is a marketer’s guide to capturing “the world’s largest and fastest-growing market”. As part of the research for the book, BCG asked 12,000 women in 22 countries a battery of 120 questions. And among the rich findings...

“At least one-third of men never help their wives/partners with chores,” according to the BCG survey. Where do men do the least housework? Japan. Indian men to the most. And American men? They come somewhere in between, though closer to India than Japan.

By the way, chores cause more domestic arguments than anything else except money – at least in the U.S., the BCG survey suggests. In Europe, BCG found, chores are the No. 1 trigger of domestic arguments. That doesn’t surprise author Meers, “Among people over 40,” she says, “two-thirds of divorces are initiated by women. And studies show that 80% of the fights are about housework.”

Everyday Money

If you haven’t yet managed to save for your retirement you could be facing an uphill battle when it comes to your financial future.

Many of us don’t feel able to save for retirement until we have our kids off our hands and our mortgages either paid off or at a manageable level. Don’t ever think it is too late to start, there are still ways you can achieve a comfortable retirement.

No matter how little working time you have left you should be investing. Even if retirement is just around the corner.

Remember you aren’t just putting money away for the day you retire but for the rest of your life. If you are healthy and likely to live more than five years in retirement, invest accordingly; it will be the share market will give you the most growth.

While you are creating your nest egg exercise some discipline and identify which parts of your lifestyle are really important to you, and which ones you are willing to live without.

Next identify your priorities, can you downsize and release some capital and lower your monthly expenses? Does retirement mean you will quit working? Could you work part time or switch to an employer where your pay might decrease but so will your stress ?

Finally, work out a plan and invest accordingly.

Finance and Investments

Most of us have heard the saying ‘it’s time in the market, not timing the market that’s important’. During the turbulent times of 2008 and early 2009, however, it was difficult to believe.

When the global share markets (as measured by the Morgan Stanley Capital Index) fell by 54% from the peak in 2007 to their nadir this year, everything looked, sounded and felt extremely gloomy. We didn’t know which overseas bank was going to fail next and unprecedented emergency measures were being taken by governments around the world.

Our instincts were to cash up and run for the bank – and many investors did just that. Those who managed to time the market, selling all their shares at the end of September 2008 as investor sentiment began to crumble, did well if they bought into the market again in March 2009. The ability to pick the top and then the bottom of the market took extraordinary investment acumen... or two strokes of extreme good fortune!

Of course, picking the right time requires precise timing. Sell a month or two early or late and the consequences can be dire. For example investors who stayed out of the market from the lows in March this year would have missed the significant and speedy rebound of 55% in the MSCI by the end of September.

Compare this with the investor who chose to sit tight, and stayed fully invested throughout this tumultuous time. Had they invested only in shares (a high risk/high growth investment strategy), they would have suffered the initial 38% loss but then would have recovered substantially with only a small loss of 4% six months later, at the end of September. An untimely exit from a depressed market would have been costly.

Who stayed the course? Those with a plan – yes I know you have a budget, a house, a job and an investment portfolio, but that does not really mean you have a plan in the sense that I mean.

If you want to build wealth and security a financial plan is essential – I am not making this up, there is research to prove it.

You know if you are focused on a goal you are more likely to achieve it – and nothing brings goals into focus like putting them in writing. A plan will also help you identify your wildest dreams which may turn into achievable goals. It will also help you identify what risks you are taking and work out an exit strategy if the risk becomes unbearable for you.


Some excerpts from a Women on Boards Report:

International research shows a positive correlation between women in leadership and business performance.

The Catalyst report (The Bottom Line: Corporate performance and women’s representation on boards, 2007) found that in all measures the companies with the most women board members outperformed those with the least.

While women can add value to boards individually, critical mass is better.

The McKinsey study looked at the performance of companies with various numbers of women on their boards and found the largest gap in performance existed between those companies with no women on the board (poorer performance) and those with three or more (better performance).

Fresh perspectives
Boards with a balance of men and women tend to consider a wider range of issues and options, resulting in commercial decisions that are more in touch with customer needs.

Effective leadership
The McKinsey report, Women Matter 2, found that women are more likely to apply five of the top nine leadership behaviours that correlate with organisational excellence. These five leadership behaviours are those particularly linked to innovation and staff management.

Role Models
Further research by Catalyst shows that having women on boards leads to more women in senior management.

A competitive edge
Whether in times of growth or contraction, there will always be a need for the best talent possible in company leadership.
Recent economic turmoil has caused many to rethink traditional views on company membership. In late 2008, a group of 17 chief executives and heads of FTSE 100 companies in the United Kingdom wrote an open letter to the Daily Telegraph calling for gender equity in the country’s boardrooms – because “extraordinary times call for innovative solutions”.

Investor confidence
Increasingly shareholders and rating agencies are factoring into their assessments of company performance the number of women on boards.

• Research shows that women on the board can be good for the bottom line. Companies with women board members outperform those with no women.
• Teams with a mix of men and women generally work better.
• Groups with more diverse skills, knowledge and experience are likely to consider a greater range of perspectives and make higher quality decisions.
• Women may help businesses avert and solve problems more effectively. For example, having women on boards can assist companies to manage key constituencies including shareholders and employees.
• Women in corporate leadership provide good role models for other women entering the workforce. They provide a goal for others to aspire to.
• Research shows that the presence of women at board level strengthens the company’s customer base and connections to markets.


Why is there still a gender gap when it comes to earnings? We are no longer expected to be nurses, teachers and social workers but are now accountants, doctors, lawyers – and financial planners. We now hold close to 50% of the available jobs, but according to a report from the States, during the last recession 78% of the jobs lost were held by men.

Why? Because women are cheap; we earn around 77-80 cents to every dollar earned by men. Women returning to work or wanting to work part time are particularly cheap. Additionally women are still in feminine occupational ghettos.

It’s not good news when women retain positions simply because they are cheaper than men.

Musings and Amusings

I have often amused myself by musing upon the GFC (Great Financial Crisis). Musing on how events would have unfolded if there was less testosterone driving our financial markets. I am not particularly original, many pundits have elaborated on this theme.

An article on the money making activities in Sicily caught my eye. It appears that the Mafia charges a 10% levy on all businesses. Not surprisingly a group called Addiopizzo (goodbye pizzo – a reference to the levy)has formed. The group of around 300 businesses in and around Palermo, have until recently remained anonymous however women, who make up around 60% of the group are among the most vocal and courageous members. Despite threats ranging from kidnapping to property damage and death, the women are rapidly becoming a thorn in the Mafias side.

Ah, if women ruled the world!