Millionaire Corner: An interview with Candace Bahr

Women Have all the Characteristics for Successful Money Management

This article originally appeared in (July 2, 2012)

When Candace Bahr hears about a new survey that found that the gender financial literacy gap is widening, she asks to hear the particulars before commenting. And when she hears the particulars, she laughs. Bahr, the managing partner of the Bahr Investment Group, is the co-founder of the Women’s Institute for Financial Education (yes,, a non-profit organization created to help women achieve financial independence.

The survey in question found, for example, that 89 percent of men said they had general investment knowledge regarding stocks, bonds and mutual funds vs. 66 percent of women. Bahr stops me right there. “If you ask men if they know more about something, guess what a man is going to say?” she said. “They’re going to say, ‘Yes, absolutely.’” When men self-report, they tend to (overstate their expertise) while women tend to underreport. It’s not that they don’t know, they just don’t acknowledge what they do know.”

While this jibes with study after study that women are less confident about their financial literacy, Bahr observed that she sees the literacy gap narrowing and the financial services industry is taking notice. “When I started 30 years ago,” she said, “I saw an incredible need for women to learn about money and be responsible. What I’m seeing now is major brokerage firms and mutual funds companies swarming around this idea of women and financial literacy. They recognize that women control more than 50 percent of the wealth already and that in the next 20 years, they will be controlling two-thirds of the wealth in the United States. Firms need to get in front of it.”

As a financial advisor working with couples, Bahr said she would talk to the person most interested in talking about money. Typically, that was the husband. This would lead to something of a Catch-22 experienced by many in the industry, she said: That an estimated 70 percent of women would, in the event of their spouse’s death or a divorce, move to a new advisor because there was no connection with the former advisor.

There are still a large number of women not actively involved in financial management, she observed, and financial literacy gaps do still remain. “One of the most popular items offers is a bumper sticker that reads, ‘A man is not a financial plan.’ A lot of women want their for their college-age daughters (to counteract the stereotype) that getting married is the ultimate in terms of financial security.”

Today, Bahr said, “more women are looking to be full partners in the financial relationship, beyond their roles as chief purchasing officer for the family or bill payer. Now, with more women working, they are more involved in making investment decisions, not only for their family, but also regarding their own retirement account.”

One of the biggest mistakes women make, Bahr said, is that they get caught up in trying to get too much information before they make an investment move. “Look at the way men shop,” she said “They go into a shopping mall for a pair of pants. They go into the first store they see. They try on the pants, and if they fit, they’re out the door. Men look for a good answer. Women look for the perfect answer. They say, ‘Maybe there is another pair of pants that will suit me better.’

“There is never an absolute green light, but women will get to the point that they think if they don’t have the perfect answer then they can’t do anything.”

Psychologically and emotionally, wealth can be “a tough concept for women,” Bahr said, and added with a laugh, “Women are great about feeling guilty. There is a tremendous amount of emotion around managing money. Was it earned? Was it inherited? At what age did they get the money? Many who have inherited wealth feel uncomfortable around it.”

In achieving financial independence or becoming a full financial partner (with a spouse), Bahr said, “just getting starting is important. “Take 15 minutes a day over the course of a year to work on your financial life. Move forward incrementally, rather than jumping into the deep end of the pool.

“(If you’re married), sit down once a year (with a spouse). Make sure you’re on the same page regarding a financial plan. It’s one of the most loving things you can do.

“Everybody needs to be responsible for their own financial situation,” she emphasized. “If you are affluent and have somebody else managing your money, you need to have a finger in that. You need to understand what they’re doing.”

Women, Bahr said, “want everything a man wants in an advisor. They want someone who is competent, knowledgeable, who is experienced, and who can communicate. But women want more. They want a relationship with someone they know is concerned about them and who is going to operate in their best interests.”

Bahr reinforced that women adopt a “small steps” approach to enhancing financial literacy and gaining financial independence. “Women have all the characteristics for successful money management,” Bahr said. “But many were not socialized to manage it so we feel uncomfortable around it. But managing money and being an investor is part of everybody’s life. Getting involved and leading by example for your children are extremely important. Nobody will ever be as concerned about your money as you are.”

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