There are, at least according to my best estimates, 13,892 blog posts, infographics, and poorly xeroxed newsletters that tell women how to invest. There are zero investing for men guides.
I’ll be the first to admit women do suffer from a few slight financial planning differences than us gentlemen do. They tend to live longer. They do tend to make less money than men do, but that’s largely by design. There are probably a few other differences I’m missing, but you get the point.
But I’m also of the belief most of the differences between the genders don’t really matter. The principles of good financial planning are the same whether you’re male, female, or made out of a thin layer of goo. There’s really no reason to make money a gender issue.
But here we are, like two years later, and nobody really listened. Money very much is a gender issue–at least for some of you. So because I like to take the contrarian view on everything, allow me to present an investing guide for men, the group of people who apparently don’t have their own issues.
Who has the patience to sit through that kind of haircut?
As much as all the ladies out there say they want to be equal and all that jazz, it’s not exactly true. There is still way more pressure on the fellas to earn a decent living than the ladies. If a woman decides she’s going to remain underemployed for whatever reason, society is far more tolerant of this decision than if a guy does it. “What’s he doing? Doesn’t he want to support his family?”
Seriously, there are people in my life who encourage Vanessa to be a housewife, while my apparent desire to retire by 35 is met with skepticism. Jerks.
That’s assuming a guy can get that far. We all know women who refuse to date guys without decent career prospects, especially in the personal finance world. Most are okay with being the breadwinner, but he still has to make a decent living, dammit.
I don’t want to really begrudge this attitude, because a family that makes more money has more opportunities. If a woman ends up with a guy who makes a lot, it means good things for her potential offspring.
Trying to maximize your income is always a good thing, but for guys, it’s doubly important. Fair or not, the guy will be expected to do the heavy lifting–both with earning and taking the groceries in from the car. OH COME ON YOU WUSS IT’S ONLY FOUR LITERS OF MILK.
If women really made 77% of what men do for the same job, why would any employer hire a man when a woman could do the same work cheaper?
— Nelson! (@financialuproar) February 2, 2014
Paternity leave is a thing, at least here in Canada. It’ll make its way to the United States sometime in the 2200s. I don’t want to discourage any guy to take his paternity leave, because it’s a great time to play video games while mom is off doing actual baby work. But if you do take it, be prepared to have the fellas (and, frankly, least some of the ladies) laugh at you.
Which brings me to one of the biggest issues facing men today, and that’s the lack of equality in divorce. Women overwhelmingly get majority custody of children, even if men ask for treatment that’s more fair. This translates into more child support, which has the ability to really hamper a dude’s ability to get ahead. Men are also far more likely to lose half of their nest egg in a divorce.
Which brings us to rule #1: Don’t get divorced, dummy. That’s a good rule for both genders, actually. See how most of these tips are going to be pretty universal?
Sometimes the guy doesn’t even get that far before he gets screwed. Imagine you’re a guy and you have drunken sex with some random chick from the bar. She tracks you down a couple months later and says two words that put the fear of God in your heart.
You want nothing to do with her and certainly aren’t ready to be a father. So you politely ask her to have an abortion. The woman has a number of options, including abortion, adoption, or keeping the kid. Ultimately, she can do whatever she wants and the guy is forced to go with it.
Meaning, if she decides to keep the kid, he has to pay child support.
We can debate the fairness of laws like this until the we all have earmuffs instead of mouths. Certain guys think men should have the ability to opt out of supporting a kid they don’t want. Most women disagree.
The point is if you’re a dude, wrap it up. That’s rule #2 by the way.
Onto the investing part
The good news is it’s probably a little easier for a guy to plan for retirement than a woman.
First of all, men live shorter lives than the ladies, on average kicking it about five years sooner. Much of this difference is because way more young men die than young women, bringing down the average for the rest of us. The difference once the two genders hit retirement age is lower, but women still live longer. Fewer retirement years = less need for savings, although not much.
Also, men are more likely to qualify for maximum CPP income since they don’t tend to take as many breaks from working. And since retirement doesn’t come with the added burden of having to save for retirement, income needed during your golden years might be less than you think.
Now according to actual studies, men are more likely to end up in riskier investments and ladies opt for more conservative options. This is probably due to our AGGRESSIVE nature. Don’t believe me? How often do you see women drag racing?
But at the same time, maybe that line of thinking is bunk too. According to The Economist, all those studies that say women invest better than men might be explained by other reasons.
Whether the stereotype of guys being more aggressive while investing is true or not, men still need to make sure they make proper moves to minimize risk as they age. Once you get close to retirement age, I firmly believe protecting your nest egg is more important than growing it.
The statistics are all over the place depending on the different studies, but the trend looks something like this. Highly educated men do well when it comes to earning, saving, and paying down debt. Women with equivalent education do pretty well too. The real risk is for men with less education.
There are all sorts of stories about middle-aged lower educated men who can’t find jobs. These men–who usually work hard, physical labor jobs–are increasingly finding themselves replaced by machines. Which brings me to rule #3 of the investing guide for men: if you’re working a physical job, prepare now for the day you can’t work anymore. It will come sooner than you think.
Men are also more confident about the way they invest, at least according to other studies. (Aside: why are there so many studies about this stuff?) Confidence is a good thing, but I’ve met enough retail investors who don’t have a clue about anything. And, sadly, the majority of them are men. So that brings me to rule #4 of the investing guide for men: don’t be afraid to ask for help.
Finally, we’re onto the last rule of this investing guide for men. Men are more likely to trade at a greater frequency than women. It doesn’t matter what gender you are, the rule is the same: buy and hold is the ticket. Stop trying to trade your way to riches.
Let’s wrap it up
To review, these are the five rules I highlighted as important for investing for men.
- Don’t get divorced
- Don’t get a girl accidentally pregnant
- Look at future earning potential when planning your retirement
- Ask for help if needed
- Be a patient investor
You might be noticing these themes could easily apply to women investors too. That’s the ultimate lesson here. Good financial planners follow the same rules no matter what your gender.