Study shows Women Saving Less than Men for Retirement!

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This topic almost makes me want to run and hide after putting up a headline like that, but alas, it’s true — women are saving less than men when it comes to their retirement accounts.

According to recent data from WISER (The Women’s Institute for a Secure Retirement), women are saving around 11% less than men (70% men vs. 59% women).

Some of the topics raised during the interview focused upon “the difference between the sexes” but one statement I’ve paraphrased below particularly grabbed my attention:

“Women save, but don’t invest … they are actually being too conservative.”

The interview goes into some depth about how to solve this problem. Thanks in large part due to a creative definition of investing by Robert Kiyosaki (author of the Rich Dad Poor Dad series) detailing the difference between an investor versus a saver, and why everyone should be loading up their investment accounts instead of putting false hopes on their savings accounts.

Being a person who has advised a few people where to invest their hard earned cash, I’ve come across this type of behavior once or twice myself by both men and women alike.

More often than not, this mentality is most prevalent during times of pessimism when the famous “Wall Street is in the crapper, and I’m losing all my cash” quotes begin to snowball, and exponentially increase their overall negativity which drive them to safer types of investments (CDs, bonds, etc).

For the novices out there, Wall Street generally works on a counter intuitive basis. The most successful investors buy when sentiment is at its very worst, and sell when the optimism is at an all time high.

Need proof? Ask anyone who bought tech stocks back in 2000 only to watch their account balance shrivel to virtually nothing.

So how do I convert from being a saver, to an investor?

I think the one major point the interview neglects to mention is a basic plan to get investors started, rather than the “go read a book” advice they repeatedly mentioned.

If you aren’t comfortable investing your own cash because you know little to nothing about the stock market, just buy index funds. Eighty percent of fund managers underperform the S&P 500 anyway, so at least you’re on the right path. Vanguard is my top pick for anyone buying index funds.
Pick a mutual fund manager that has earned a solid reputation of outperforming the market. Morningstar publishes a list of 4 star and 5 star mutual funds (5 being the best) who outperform their peers each year. This is an excellent starting point for novice investors, and again, Vanguard would be my choice to setup your mutual fund accounts.
If you choose to pick individual stocks, take a serious look at why YOU want to buy the stock. Avoid the latest hot stock tip you got from the water cooler grapevine or filling up at the pump. In this case, I would certainly recommend picking up a book on investing, as well as watching a few CNBC shows such as Jim Cramer’s Mad Money just to get a feel for what real world investing is all about.