Danielle Nava is a dedicated CERTIFIED FINANCIAL PLANNER™. Danielle's passion for advocating women's financial literacy stems from her experiences witnessing women's challenges in navigating finances and investing for the future. Her journey, fueled by a desire to bridge the gender gap in financial knowledge, aims to create an inclusive space where women feel confident, informed, and empowered to seize control of their financial destinies.
What are women's most significant investment and wealth management challenges?
I know you've heard of the Gender Pay Gap, but have you heard of the Gender Investing Gap?
Unlike the Pay Gap, the Gender Investing Gap isn't a financial measure of inequality but a cultural failure.
Part of the inequality resides in the stereotypical expectation that men should do wealth-building and long-term investing for the household, and this ALONE has done a lot of damage. But alongside that fact, contributing to the investing gap is:
- Women tend to keep as much as 71% of their assets in cash because they fear the stock market (risk averse).
- Women place a higher importance on the day-to-day finances than on the performance of their investments.
- Women place more importance than men in paying off debt, which can affect overall growth if you need the right strategy.
But what is unhinged is that we simultaneously know that:
- Women live longer (and we need our savings to last longer).
- Women are better investors.
- This industry doesn't reflect women (financial advisors and wealth managers are overwhelmingly "old, pale and male")
- By 2030, American women are expected to control much of an estimated $30 trillion in financial assets from the Boomer generation.
- Money can fuel your life's biggest dreams.
See, the disconnect is apparent. Yes, women receive or seek out wealth literacy or expectations less, but we may seek it out more if they spoke our language.
Whether we as women have willingly shied away from wealth education and meaningful action, we don't believe that it's our fault…because the financial industry wasn't made with women in mind.
Women are goal-oriented and need to see how an overall plan (yes, even one that takes on some risk and de-prioritizes debt) supports and helps them achieve their goals. We deserve to have things explained clearly, coherently, and comprehensively, a communication strategy that has yet to hit mainstream financial consumption.
This is my primary goal with my blog, DanielleNava.com. I want women to feel like they're getting advice from their wise and trusted older sister, with no jargon or fancy charts, flashy unrealistic promises, or chasing "alpha," just straightforward education that consistently relates to their bigger picture and goals in life.
Many women face barriers and challenges when it comes to entering the world of investment. What strategies would you recommend to encourage and empower women to overcome these obstacles and take the necessary steps toward investing in their financial future? Anything specific for us millennials?
These barriers are thick and high in our minds, but it's never been more accessible for anyone, including women, to begin their wealth journeys. What this translates to is a lot of myth-busting up front. We must bust the myths that keep us from starting, but we must also bust myths that unprofessional finance gurus have spent decades creating.
The biggest mindset myth is that you must fully comprehend how investing works before you dive in or make any financial changes. While a general understanding of what you're getting into is ideal, don't let perfectionism paralyze you. These days, professional financial advisors like myself share free, sound financial education, and hopping on a free Investing 101 webinar or downloading a guide is a low entry point. The fear of making big, costly mistakes is real, but with the help of a professional, you can avoid them while learning important lessons along the way. Putting off your wealth journey can be costly because time is your best asset!
It's important to talk about how the stock market is just one of many tools we have to build wealth. Debt, cash, insurance, and more also fit into the puzzle. One of my favorite things to say to women who are nervous about getting started is: "Markets are gonna market." It's okay that the stock market fluctuates—that is who (she) is as a tool. We can control our goals, time horizon, and risk tolerance, but we can't reach our goals without this tool. This awareness of the short-term rollercoaster rides with investing leads to acceptance, and THAT is the key to a true transformation. Just like in Barbie, when all the Barbies are under the patriarchal spell, we all possess the power (with the help of some fantastic, uplifting besties/sisters) to break free from our preconceptions about women and wealth. We are already empowered; we need to boldly and unapologetically step into that power.
When tasked with advising millennial women to move beyond cash savings and into investing, I encourage them to find their "money fuel" number. Our "money fuel" is the engine behind our biggest life dreams. Seeing this number is simple: Your after-tax household income minus your household expenses. Essentially, it's what's left over each month. Once you have your money fuel number, you can devise a plan to determine where exactly it goes. Sometimes, it needs to pay off high-interest debt, sometimes it goes towards building your emergency funds, sometimes it goes towards investing, and sometimes it goes towards 2-3 different places. I have a free Money Date Worksheet that helps them figure out their money fuel number and every significant number they need to know about their financial picture.
Can you share some personal experiences or success stories illustrating how you've helped millennial women navigate this often challenging space and achieve their financial goals? What strategies or approaches have you found most effective in empowering women to take control of their investments and build long-term wealth?
Women are often OVERwhelmed by life daily. It's no secret that women do more. We share more of the household chores. We are often the default parent. We do more research before big decisions or purchases. We are the caretakers of both our parents and our children. We volunteer our time more freely. We uplift and console our friends and family. We are the chief consumer officers of the house, not to mention the added stress of the pay gap, childcare costs & pink taxes! And yes, this overwhelm leads to fear, shame, procrastination, or delegation of the long-term wealth building to our male counterparts.
When I first meet with women and start talking about their situation, there are tears nine times out of 10. Money is emotional! Unfortunately, the stressful situations they arrive in are often largely thanks to their male partners. I've had a woman come to me whose husband had gambled her million-dollar inheritance away. I've had women come to me in their late 50s who must start over because of their partner's critical lousy business decision. I've had someone come to me who almost had a mental breakdown from being overworked, overwhelmed, and having a partner who, as it turns out, wasn't actually charging his customers in his new business after quitting his steady job.
Obviously, not all men or partners make bad financial decisions, but for the ones who do…their female counterparts want a female advisor whom they trust and feel safe with. These reasons are why I'm so passionate about wealth literacy. If I can show women that they are capable of taking their wealth journey into their own hands with confidence—before sh*t hits the fan—then that is a win for everyone. If you're in a relationship, the goal shouldn't be to singlehandedly control the finances…the goal should be, at a minimum, to confidently understand what's happening with the finances and to share your input into decisions that affect the household.
It's imperative to strip women of their money shame and show them how they have done a great job up until now. We never give ourselves enough credit, so I enforce that very quickly. We are acknowledging her past, but we are focused on her future together.
Most times, we know what we should be doing, but sometimes, it's nice to have someone hold your hand and walk you through it step by step. That is my favorite part about what I do. I love taking a client's perceived mess and tidying it up for them. Their relief is palpable and satisfying for both of us.
I take time and care to explain exactly how their investment strategy is going to work for their goals, and I set the expectations of what their account(s) may look like in the short term and during turbulent times. I do this up-front and remind them every time we talk that we are in this investment strategy for a reason. I use an analogy of choosing a vehicle to ride out a storm, and I remind them why we chose this vehicle in particular and that changing vehicles in the middle of the storm will only harm us.
When you take that time and care, women get it. In my 8 years of experience, it's typically the men who have made emotional and risky decisions that set them back, despite our advice. A woman's "why" is the primary reason they are better investors. When that understanding exists—that this plan is the most efficient path to your life's dreams—women stay the course and carry on. It's my job to hold their hand and guide them through this path, and I take it very seriously. I know that my ability to communicate, articulate, and educate women directly impacts their journey to wealth. And I firmly believe the world is better when women have more wealth!