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.

The Financial Strategies Group

We think for ourselves and make unique recommendations. We only recommend investments and insurances that are in the best interest of our clients.

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

Saturday, 20 February 2016


Sabotaging Yourself Without Knowing It

Change Your Mindset
Putting yourself down directly is the most destructive negative mental habit people have, This habit is hard to break,  because negative self-talk evolves into an automatic impulse for many. Women in particular get into the habit of downplaying our accomplishments to others (and ourselves), becoming overly self-effacing.

Doubting Yourself
When you lack self-confidence, you end up doubting your potential and your abilities. This may stop you from applying for a job, asking for a (deserved) raise or taking on more responsibility at work.
Try to turn your doubts into opportunities for teachable moments. Accomplishing tasks that feel daunting will eventually boost your confidence.

Comparing Yourself to Others
Whenever we judge other people we submerge ourselves in a toxic pool of false assumptions and negativity.
Remember that what you see from the outside is likely never the full picture into someone else's life. 

Decision-Making Out of Fear
Fear is hard-wired into our central nervous system and in many ways serves us well. Fear can also paralyse us into playing it too safe — to the point that we might miss out on opportunities to accomplish our dreams (or even our short-term goals).

To reframe your decision-making process, zero in on what's keeping you from taking a leap in life, whether career-wise or personally.

Feeling Isolated
Be wary of spending too much time on your computer, in chat rooms and so on. Make sure you schedule some time with a friend at least once a week. 

Source: Dailyworth


Global Financial Literacy

Suppose you put $100 in a savings account that earns 10% interest each year. After five years how much will you have? That was a question posed in a multiple-choice quiz (completed by 150,000 people in 144 countries) by Standard & Poor’s, a rating agency. The answers proferred were "less than $150", "exactly $150" and "more than $150". The intention was to test whether respondents understood compound interest, in addition to basic mathematics. Alas, not that many did: just one-third of them answered three out of five similar multiple-choice questions correctly. Scandinavians are the most financially literate: 70% were able to answer three questions correctly; the corresponding figure for Angolans and Albanians was 15%. While education plays a large role in determining financial literacy, the link with GDP per person is remarkably strong, too (see chart).

Previous research has shown that it can be difficult to drum in financial know-how at a young age. Instead, it is gained through experience. In developed countries, knowledge follows a U-shaped curve, with middle-aged adults performing better in financial-literacy surveys than both the young and the old (who, through a combination of cognitive impairment and less education, do worse). In developing countries, financial literacy is better among the young, who have typically received more schooling.
The survey, the largest of its kind, demonstrates a striking gender divide in financial literacy. In 93 countries, the gap in correct answers between men and women was more than five percentage points. In Canada, 77% of men answered three questions correctly; the corresponding figure for women was just 60%. Women's lack of knowledge might well be explained by the deferring of financial decision-making to their husbands. But worryingly, the gender gap persists among well-educated single women too. When it comes to financial decision-making, many countries appear to be stuck in a 1960s time warp.

Source: The Economist

Musings & Amusings

Can’t say I was a fan of Leaning In so loved Lucy Kellaway’s comments (didn’t read the whole book I confess):

Stop leaning in at once. It isn’t a comfortable position to adopt, and I’m not at all surprised to hear that after 18 months you are suffering in body and soul. Forget Sheryl Sandberg and try my three easy rules for leaning out which I have been perfecting for the past quarter of a century.

1. Never ever go to any evening events for work unless you think they would be a) enjoyable, b) useful in a specific way, or c) not going would do you harm. In my experience so few things fall into any of the categories; it means only turning up to things once or twice a year. This has the advantage that when you do present yourself you are such a novelty that everyone will want to talk to you. It’s called scarcity value. Choke off the supply of yourself, and watch the price go up.

2. Try to work out what you are measured on. If you are a fund manager, presumably you are measured on whether you make any money for your clients. This isn’t directly related to the amount of time you spend, so do it as well as you can — and then go home.

3. Stop caring quite so much. That doesn’t mean performing worse, it means worrying less. This is one of the main advantages of having children. They are a reminder that work only matters up to a point. Most mothers get this wrong by feeling full of guilt — when they are in one sphere they look over their shoulders worrying about what they aren’t doing in the other.

Source: Financial Times

Everyday Money

Setting Aside Shame and Blame in Financial Decisions

Shame fails at changing behaviour, it can also trigger the very mistakes we’re trying to avoid. Shame is something we internalise, and we capture it with a statement like, “I’m a bad person.” With guilt, we focus on the action and say, “I made a mistake. That’s really dumb.” In other words, we make shame about us, but guilt is about the event.

Think about the last money conversation you may have had with a spouse or partner. Imagine there was a financial “event,” and with the benefit of hindsight, you label that event a mistake. What happens next has probably happened to all of us at least once. One or both of you may have shamed and blamed the other for the mistake. One couple I know experienced such an event, and I have watched them shame and blame each other for the last decade. 

So to help you stick to the rule, I want you grab a hat and a Sharpie. No, really. Grab an actual hat and a Sharpie. Maybe one of those trucker hats with an oversize crown. Then, across the front, write, “No shame. No blame.” Every time you talk about money, wear your hat.

Source: NY Times

Who's Counting?

8 Ways Women's Lives Have Changed For The Better Since 2005

  1. More women have access to higher quality health care.
  2. Women's representation in politics is higher than it's ever been.
  3. Same sex marriage is legal
  4. Women’s equality in the workplace has improved – along with our ability to fight for it.
  5. The entertainment industry finally started to recognise that women are consumers of pop culture, want to see our experiences represented, and are pretty good at telling those stories for ourselves.
  6. Young, single women caught up to their male peers in some professions.
  7. We see more and more women at the top of their fields, actively paving the way for the next generation.
  8. Women's voices and experiences are better represented in the media - especially online - bringing new weight to the term "lady blog."

Friday, 19 February 2016

Finance & Investments

The key component of personal finance is financial planning, which is a dynamic process that requires regular monitoring and reevaluation. In general, it involves five steps:

1. Assessment: A person's financial situation is assessed by compiling simplified versions of financial statements including balance sheets and income statements. A personal balance sheet lists the values of personal assets (e.g., car, house, clothes, stocks, bank account), along with personal liabilities (e.g., credit card debt, bank loan, mortgage). A personal income statement lists personal income and expenses.
2. Goal setting: Having multiple goals is common, including a mix of short- and long-term goals. For example, a long-term goal would be to "retire at age 65 with a personal net worth of $1,000,000," while a short-term goal would be to "save up for a new computer in the next month." Setting financial goals helps to direct financial planning. Goal setting is done with an objective to meet specific financial requirements.
3. Plan creation: The financial plan details how to accomplish the goals. It could include, for example, reducing unnecessary expenses, increasing the employment income, or investing in the stock market.
4. Execution: Execution of a financial plan often requires discipline and perseverance. Many people obtain assistance from professionals such as accountants, financial planners, investment advisers, and lawyers.
5. Monitoring and reassessment: As time passes, the financial plan is monitored for possible adjustments or reassessments.

Areas of focus
The six key areas of personal financial planning are:
1. Financial position
2. Adequate protection
3. Tax planning
4. Investment and accumulation goals
5. Retirement planning
6. Estate planning

Yes, I know I’ve written about this before but it is always worth repeating. More on this topic in “Girls Just Want to Have Fund$,” “Money, Money, Money Ain’t it Funny” and “Smart Money” available now as ebooks.

Who's Counting?

Why Swedish men take so much paternity leave

ALONG with its Nordic neighbours, Sweden features near the top of most gender-equality rankings. The World Economic Forum rates it as having one of the narrowest gender gaps in the world. But Sweden is not only a good place to be a woman: it also appears to be an idyll for new dads. Close to 90% of Swedish fathers take paternity leave.

Forty years ago Sweden became the first country in the world to introduce a gender-neutral paid parental-leave allowance. But the policy was hardly a hit with dads: in the scheme's first year men took only 0.5% of all paid parental leave. Today they take a quarter of it. One reason is that the scheme has become more generous, with the number of paid leave days for the first child being bumped up from 180 to 480. But it has also been tweaked to encourage a more equal sharing of the allowance. In 1995 the first so-called "daddy month" was introduced. Under this reform, families in which each parent took at least one month of leave received an additional month to add to their total allowance. The policy was expanded in 2002 so that if the mother and father each took at least two months' leave, the family would get two extra months. Policies similar to the Swedish "daddy months" have been introduced in other countries. Germany amended its parental-leave scheme in 2007 along Swedish lines.

Since Swedish men started to take more responsibility for child rearing, women have seen both their incomes and levels of self-reported happiness increase. Paying dads to change nappies and hang out at playgrounds, in other words, seems to benefit the whole family.

Source: The Economist


Club rules keep women out of the network

A week ago Lady Judge, the newly appointed chairman of the Institute of Directors, held an unusual party. 

The room at the London club’s grand headquarters in Pall Mall was filled with the great and the good(ish): over champagne and canap├ęs, the UK home secretary and the head of the Royal Mail hobnobbed with a former Lord Mayor of London and other senior figures in business and politics. Nothing out of the ordinary, one might think. London’s establishment loves to get together, and gatherings such as this do much to oil the wheels of power. 

But what was almost unprecedented for an occasion of this sort was that the room was entirely full of women.

Those at the Garrick Club opposed to women members have come up with a range of explanations for why they do not want to share their space, some more feeble than others. Among the lamest is the excuse put forward by several that the Garrick provides a welcome respite for men who otherwise could not resist showing off to impress women — “an innate male characteristic”, as one told The Independent, “whether you are a bird or an animal”. Pity the men who are forced to exhaust themselves with such displays.

Source: Financial Times

Everyday Money

At first glance the patriarchy appears to be thriving. More than 90% of presidents and prime ministers are male, as are nearly all big corporate bosses. Men dominate finance, technology, films, sports, music and even stand-up comedy. In much of the world they still enjoy social and legal privileges simply because they have a Y chromosome. So it might seem odd to worry about the plight of men. Yet there is plenty of cause for concern. They earn fewer university degrees than women. Boys in the developed world are 50% more likely to flunk basic maths, reading and science entirely. Poorly educated men have struggled to find a role in the workplace. The result, for low-skilled men, is a poisonous combination of no job, no family and no prospects. What can be done? Part of the solution lies in a change in cultural attitudes. Policymakers also need to lend a hand, because foolish laws are making the problem worse. Even more important than scrapping foolish policies is retooling the educational system, which was designed in an age when most men worked with their muscles. Politicians need to recognise that boys’ underachievement is a serious problem, and set about fixing it. More generally, schools need to become more boy-friendly. The growing equality of the sexes is one of the biggest achievements of the post-war era: people have greater opportunities than ever before to achieve their ambitions regardless of their gender. But some men have failed to cope with this new world. It is time to give them a hand.


Daughters of Working Mothers Earn 23 Percent More
When a woman works outside of the home before her children are 14 years old, she improves her daughter’s career prospects, a new report found. Harvard Business School’s recently launched “Gender Initiative” analyzed data of nearly 50,000 adults aged 18 to 60 in 24 nations from 2002 to 2012. The data was from the International Social Survey Program, a multi-country program that looks at social trends across developed nations. The same did not hold true for sons of working mothers, however; they are as likely as sons with stay-at-home mothers to hold supervisory positions and earn comparable salaries.

In the U.S., adult daughters of working mothers earned 23 percent more than those whose mothers had not worked during their childhoods, earning an annual average income of $35,474 versus $28,894, the study found. More than one-third held supervisory positions, compared with just one-quarter of their counterparts from more traditional households. The study was written by Harvard Business School professor Kathleen McGinn; Harvard Business School researcher Mayra Ruiz Castro; and Elizabeth Long Lingo, a researcher at Mt. Holyoke College in South Hadley, Massachusetts.

The pattern of results strongly suggests a “role modeling effect,” McGinn says. Daughters look around them to look at what’s appropriate behavior. They see that it’s appropriate and reasonable for women to go to work, and for women to be powerful, to hold supervisory responsibility and to make money.”

Musings & Amusings

South Asia is one of the worst places in the world to be female
India’s bachelor leader, Narendra Modi, struggles with the opposite sex. For a man usually so eloquent, Mr Modi occasionally lands his sandalled foot in his mouth: on June 7th he made an especially crass comment during an otherwise successful visit to Bangladesh, praising his host, Sheikh Hasina, the prime minister, for being tough on terrorism “despite being a woman”. Critics back home accused Mr Modi of having retrograde views, typical of those who revere the country as “Mother India” but who treat women atrociously. Yet such attitudes are widely shared, not just in India but across South Asia. The whole region fails to grant women equal respect or opportunities.

That may seem odd, given how prominent a role women play in South Asian politics. China, Japan, Russia and many other countries have failed to produce a female prime minister or president. South Asia has had several. If Hillary Clinton is elected next year to lead the world’s most powerful democracy, it will be a full half-century after Indira Gandhi first led the world’s largest one. Sri Lanka’s Sirimavo Bandaranaike pipped her to become the world’s first female head of government, in 1960. In that country, uniquely, both a mother and her daughter have held the highest political office. In the late 1990s Chandrika Kumaratunga even served as president at the same time as her ageing mother, Mrs Bandaranaike, completed a third, mostly ceremonial, term as prime minister.

Women prosper at the top of South Asian democracies partly because they are propelled by dynasties that long formed the core of political parties. In Bangladesh the two battling begums have ensured that no other politician gets a look-in.

But if South Asia is one of the best places on Earth for elite women who aspire to a political career, it is one of the worst places to be an ordinary woman. The occasional chauvinism faced by females at the top pales beside the burdens heaped on those at the bottom. South Asian women fare terribly in a “Mothers’ Index” put together in May by Save the Children, a British charity. It ranks 179 countries according to the well-being of their women, using indicators such as maternal mortality, the survival of young children and women’s involvement in politics. Subcontinental nations come out the worst in Asia. Women in India and Pakistan (ranked 140th and 149th) have a quality of life only a little brighter than those in Afghanistan (152nd) and far behind those in China (61st), who are far more likely to survive childbirth, or see their offspring spend a long time in school.

Let money do the talking
Yet South Asia will need to spend a lot more on women in order to see further improvements. The region devotes barely 1% of GDP to public health (China spends 3.1%).This puts a heavy burden on those who give birth and take most responsibility for child care.

The resources spent on women in South Asia are shared more unevenly than in most places. Among the richest quintile in Delhi (it is a similar story in Dhaka and elsewhere), women can enjoy maternal and other care close to first-world standards. By contrast the poorest quintile in the same cities, especially in slums, endure conditions as bad—or worse—than in far poorer villages: in Delhi only 19% of such women have someone skilled present when they give birth. Barely half of their children have had a measles jab and nearly three-fifths are stunted. Reducing such inequality would be one way to make existing resources go further in South Asia. But that is likely to happen no quicker than changing old-fashioned attitudes to women.

Source: The Economist (Asia)