How Money-Savvy Women Can Save The Economy

   They say women are better at everything. But women are also our most underutilized economic resource. Here’s why women must put financial empowerment to work in personal finance and business.

In our playground days, we learned girls rule and boys drool. While we’ve all grown up since then, it turns out that girls may, in fact, rule when it comes to business, money management, and more.

A growing body of scientific study suggests women can outperform men in everything from investing to gambling to politics. From Wall Street to the West Bank, women are wired to make a significant difference.

So why is it that women, who make up nearly half of the workforce at 46.7%, only occupy 16% of Fortune 500 board seats and less than 3% of Fortune 500 CEO positions, according to Catalyst?

One New York Times columnist wondered, “Would we have been better off if instead of the Lehman Brothers, it had been the Lehman Brothers and Sisters?” With more female CEOs and board members in the financial industry, perhaps the financial crisis would’ve played out differently.

Armed with financial skills and killer business instincts, money-savvy women can indeed take the economy by storm. Take a look at three ways women have a financial edge that can shatter the glass ceiling.

1)      Women are better investors. It’s been said before; now there’s more proof that confirms women are better investors than men. A recent study found that women’s risk-averse attitude and conservative approach to investing achieves higher returns than men, and is ultimately a more successful investment strategy. This isn’t just behavioral psychology; a 2009 study found that female investors made 1% more than men annually.

2)      Women at the top are better for company culture. A majority of companies are still an Old Boys network at the top, but having women in leadership can fundamentally change companies for the better. As Fortune editor Patricia Sellers sums up, “For women, power is more about influence than control, more horizontal than ladder-like. And when it comes to building businesses, it’s about creating the companies we want to work for.” One Fortune 500 company, Principal Financial Group, is committed to gender diversity. The CEO, Larry Zimpleman, stated clear reasoning for it: “There’s a growing body of research that indicates that women are more balanced and thoughtful in making important decisions. So, if improving a company’s performance is of interest, then having good gender balance in key management positions as well as on your board will help achieve that objective.”

3)      Women in the boardroom are better for the bottom line. In addition to being better for company culture, women are great for company profits. The numbers back it up. A Leeds University study shows having one female director cuts the companies’ risk of bankruptcy up to 20%. Catalyst reports that Fortune 500 companies with three or more women on the board had significant performance advantage—73% return on sales and 112% return on invested capital—over those with fewer women. A Pepperdine University study tracked performance of Fortune 500 companies and found that “correlation between high-level female executives and business success has been consistent and revealing.” The question comes to mind again: what if it had been the Lehman Brothers and Sisters?

European countries are beginning to recognize the potential of businesswomen in leadership. Since 2003, Norway has a law requiring that boards of publicly held companies are at least 40% female, which has led to fewer layoffs and more focus on long-term viability, reports MSNBC. Germany, with Europe’s largest economy, is considering calling for a 30% female representation on executive boards by 2018. With women barely filling one in every five seats in American boardrooms, the U.S. could be placing itself at a tremendous disadvantage in the global business world.

DIY Financial Empowerment

The glass ceiling won’t break itself. But the resources are already at women’s fingertips to empower themselves through financial knowledge and action.

For example, LearnVest, a personal finance site for women, teaches women to be financially savvy through educational, fun “bootcamp” programs. DailyWorth fosters a community of financially-empowered women and sends tips on money matters from financial basics to building net worth. Sites like Forbes MoneyWise Women and SavvySugar feature money-smart content written for and by women. Female financial advisers like Jean Chatzky and Suze Orman are strong role models, and similarly, I write for Credit Karma on the topic of credit health for women everywhere. For more great resources, Forbes just posted their latest top 100 websites for women.

What does managing credit card debt have to do with managing a company’s investment portfolio? Both involve financial know-how, innovative action, and the confidence to just do it. Let’s get started ladies; it’s time to do better for ourselves so we can also do more beyond ourselves. The economy needs some saving.

Source : www.news.yahoo.com

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