The average Singaporean women tend to live 5 years or longer than their male counterparts.
They also tend to marry men who are 5 years older than them. So overall, she may outlive her husband by 10 years or more.
Therefore, it is crucial for women to learn to manage their finances.
Investing Psychology of Women
Male investors tend to take a short-term approach and make more speculative investments. They also like to keep themselves updated on financial information, and by doing so, they often feel compelled to act on it.
In contrast, women investors are usually more patient and willing to take a longer-term approach. However, they also tend to be more risk-averse, which can be a double-edged sword.
Many women put their savings in fixed deposits and bank accounts where the interest is low. Instead, they should consider investment instruments like diversified unit trust portfolios and endowment products which can provide a higher potential return.
Financial Planning for Women of Different Ages
Women who want to grow and preserve their wealth should focus on 2 important aspects
- Long-term financial planning
- Disciplined investing
Below are some guidelines on what to focus on at different life stages.
Women in their 20s:
- Start a disciplined monthly savings plan to save money for buying their first home
- Manage credit cards
- Ensure adequate health insurance and life insurance for yourself
Women in their 30s:
- Manage mortgage payments for their first home
- Invest their savings into a diversified portfolio comprising of many asset classes (eg. equities, bonds, properties, cash)
- Ensure adequate life insurance for yourself and financial dependents if any (eg. children, parents)
Women in their 40s:
- Retirement planning (goal setting and implementation of retirement plans)
- Investment portfolio (ensure your portfolio is able to generate enough returns to meet retirement goals)
- Ensure adequate health and life insurance
Women in their 50s:
- Retirement planning (review your retirement goals and make adjustments if necessary)
- Investment portfolio (review your portfolio and make adjustments if necessary)
- Start debt reduction (eg. paying off mortgage)
- Ensure adequate health and life insurance
Women in their 60s:
- Manage cashflow according to their retirement plans
- Investment portfolio (allocate to more defensive assets or financial instruments like bonds, annuity, endowment plans, etc)
- Ensure adequate health and life insurance
If you need a financial plan tailored for your personal or family needs, please contact your FLA Organization financial adviser today.
