Women encouraged to get to grips with their finances

Financial advisers, Cathy Alexander, Nicola Langridge and Siobhan Simpson.

Women need to take charge of their own finances and have a plan for the future, says financial planner Nicola Langridge.

Ms Langridge was a guest speaker at a Women and Investing seminar at a Constantia wine estate last week, Thursday August 25, when she and other financial planners spoke about how women could empower themselves financially.

With men, on average, living seven years less than women and women in corporate positions earning, on average, 28% less than men, women needed to check that they would be financially secure in the event of their partner’s death, she said.

“Your relationship with money is essential, and you need to plan your investments together with your husband/partner so that if they die, you are left with the plan that you understand.”

She spoke of a young wife who was financially astute and had two small children. “But her husband died leaving her with no idea of their financial situation. She came to us. Her house and car were paid off and she was okay.”

Money, she said, was the most common cause of divorce. “And with 25 000 divorces a year that means that half of marriages end in divorce. Women are 27% worse off while men are 10% better off. This is because many women have taken a gap in their careers to look after kids and are now playing catch-up. Single moms have to maintain a larger home due to kids living with them, and maintenance does not always close that gap. Or they delay getting financial advice.

“We encourage clients to have a goals-based approach and to choose a one-stop-shop investment company to achieve these goals.

“You need to ask three things – what are your dreams? What gives you joy? What makes you feel secure? If one of the things that brings you joy is travel, then you are less likely to make frivolous purchases. It has been proven that with proper planning, it is possible to make three-percent more growth because your advisor is constantly checking your investment.”

Sales manager Siobhan Simpson, of Newlands, said the biggest risk for women was not taking enough investment risks to beat inflation. “Don’t leave money in the bank. There is R1.5 trillion sitting in retail banks, doing nothing.”

She said events like Covid and the global downturn in the economy were things no one could have forecast.

“It’s not the first time we have seen unforecastable events like this. Looking back to 1990, no-one had yet heard of the internet; in 2000 no-one would have thought that Donald Trump would be leading America a few years later, and who could have imagined the lockdowns. Things change, and they do so quickly. What we learn from this is that the world and people are resilient, that people and the economy make a way through shorter term problems, just like we learnt to live without liquor, or find it somewhere else, during the pandemic.

“With rising inflation and interest rates and growth becoming scarce, high quality global companies such as Nestlé are a strong investment idea. They were able to increase their prices by 5% in the first quarter but volumes still went up by 2.5%. Another investment opportunity is SA bonds as they are yielding 10% to 11%. This investment also balances offshore equities.”

Ms Simpson added that having some cash in a portfolio was opportune because there are many quality companies trading at discounts to what they were worth.

However, there was still uncertainty around property and the structural headwinds it would face, she added.

“Offshore equities are currently our preferred asset class as they provide a greater market for investment – there are more quality investments to choose from,” said Ms Simpson.

She advises three things to remember when investing. “Stay invested as this overall brings a high return; do not follow fashion (the latest investment trend) or chop and change; everything is stronger together – invest in a blend of funds, not just one as this offers diversification and a better outcome.”