The Financially Empowered Woman

Everything You Really Want to Know About Your Money

Tracy Theemes

• Publisher: LifeTree
• Year: 2014
• eBook ISBN: 9781928055020
• Topic: Personal Development
• Subtopic: Personal Finance

Tracy Theemes knows money, and she knows women. As a certified Investment Advisor, Theemes is an expert in wealth management. As a former therapist and counselor, Theemes has deep insight into how thoughts, feelings and beliefs shape her clients' money-related behaviour. In her book The Financially Empowered Woman, Theemes brings these two areas of expertise together in a unique and compelling resource for women who want to gain mastery over their financial lives but need advice and encouragement to do so.Women today feel heavily burdened in their lives. Career pressures, family responsibilities, rising divorce rates, the impossible ideal of the superwoman, and a culture that still assumes that men are better equipped than women to deal with financial matters all contribute to the powerlessness many women feel when it comes to money. Hundreds of Theemes' female clients from across the socioeconomic spectrum confess harbouring feelings such as anxiety, guilt and overwhelm around their own money.
In The Financially Empowered Woman, Theemes unpacks the social and emotional roots of the problem and firmly but gently leads readers to greater self-awareness and empowered decision-making.After mastering they why, it's time to move on to the how. Theemes offers a concise and accessible five-step planning guide that every woman can follow to get her financial life on track and keep it there. A comprehensive glossary of financial terms and explanation of financial products and processes equips readers with every piece of information they need in order to make informed, prudent decisions regarding their financial lives.Readers will learn:
• How gender affects our ability to earn, and also our financial needs
• Why women think differently about money than men do — and how to use those differences to your advantage
• How to gauge your financial position and monitor it as it changes
• How to hire suitable financial professionals for your money team
• How to talk to your banker or broker; how to read and understand financial statements
• How to identify your financial values and set goals that support themBlending compassion and insight with rigorous professional expertise, The Financially Empowered Woman is destined to become an indispensable resource for every woman who wants to step into her own financial empowerment.

1

MY JOURNEY

WHAT THE HECK IS A PSYCHOLOGIST DOING WORKING AS A FINANCIAL ADVISOR?

In my late twenties, I was doing doctoral work in child psychology and working as an infant development consultant in the gritty and troubled Downtown Eastside of Vancouver. Each of the families admitted into our program had at least two presenting issues (drug addicted mom with a child with Down Syndrome, or a baby born preterm into a family with a history of violence, for example.) These were most often families in high distress, facing a diverse mix of challenges.

In my last year there, three of the babies on my caseload died. I felt strongly that two of the deaths were triggered by economic factors. These tragedies were preventable. I believed that if those families had had enough money, the child’s life would not have been lost. This realization led me to a huge spiritual crisis.

I just couldn’t understand how in one city we could have such a contrast in human conditions. One child is taken to the doctor with a weight problem while six blocks away another child doesn’t have enough to eat and goes to school hungry. It was like money was getting stuck in certain places and didn’t flow evenly from one side of my city to the other.

I became fascinated by why some people were rich and some people were poor. It struck me that finding an answer to this question was even more fundamental to the well-being of my clients than understanding the human psyche or knowing whether to lay an infant on her back or side when sleeping. Everywhere I looked, people, communities, companies and even countries, seemed to be stressed out about money. And given that not having enough money was a potentially fatal situation, I began to appreciate the magnitude of this issue in our world.

I started to think a lot about money. I wondered how we could get the money to move from where it was in surplus to where it was in short supply. What could I do to ensure that resources got funnelled to where they were needed? What was my role in that? What is money anyway? Who gets it and who doesn’t? And why are there so many problems around it?

I began to suspect that I wasn’t going to be able to address these critical questions by traipsing around the streets of the Downtown Eastside with my toy bag and a developmental assessment inventory. The foundational issue that needed to be resolved wasn’t about child development, outdoor play or whether a child’s daycare was licensed. It was having the money to purchase what that child and family needed to function optimally.

I decided I wanted to help eradicate poverty (at least in my corner of the world, to start), and to do that, I had to understand money and how it worked. Ten years of post-secondary education had not prepared me for this undertaking. The path I was on no longer felt right. I left the doctoral program in child psychology that I had worked so hard for and decided the first place to learn about money was the business world. That was the start of my spiritual journey into the realm of money, leadership and power.

I found employment with an international play equipment company and went from the world of child psychology into sales. My former college mates and professors were aghast. My family was in a state of shock, and friends questioned my sanity. But what better way to take a cold plunge into economic waters than by having to sell something to earn your income? It was a horrible, exciting, discouraging and fascinating transition.

I was now awakened to the reality that it is the currency of money that makes the world turn. I had always thought that it was love, relationships or maybe even health. But I now saw that without money, you can’t support any of those things. You can’t eat. You have no accommodation. You have no clean bed for a child to sleep in.

This realization marked a major shift in my values.

As is common in most homes, I was raised with the vague sense that money was really important but was taught few specifics about what it is and how it works. The essence of money was mainly communicated through clichés like: “Money doesn’t grow on trees” and “You think I’m made of money?”

I was fortunate to be raised in an entrepreneurial home. My parents ran a tree service business and several other ventures. My brothers and I accompanied our father after dinner while he did estimates for tree removal around the city. I helped my mom every week do the accounting and some of the marketing for the business. But no one ever taught me what money was really about, how to make it grow (or shrink!), its role in a successful life or the enormity of what we can do with it when it is well managed.

My “real” education about life was given in the home, about the home. I was taught how to wash clothes, to make decent brownies, to iron pleats and to do a tidy hospital corner on a bed. My mom did the best she could to prepare me for the life she led and understood. She stewarded the food in our fridge, served leftovers on Wednesdays, darned socks and re-soled shoes. We kept to our budget when buying groceries or looking for prom dresses. We carried coupons to the grocery store and kept a change jar for saving. She modelled the prudent and efficient management of a well-run home.

But managing the household budget is not financial empowerment. I came to see that real economic power is not about the pennies. It may start with the pennies and an understanding of cash flow, but it expands far beyond these matters. Economic power is about connecting to the principles of wealth and understanding how it works.

This is where my journey as a woman who wanted to master money and “grow up financially” got interesting.

For almost ten years, I moved through the ranks and was transferred to the U.S. with the international play equipment company I had left doctoral work to join. I later left that company to start my own business in the U.S. and then sold it. I was ready to move to the next level of financial questioning. I walked into my local Smith Barney office, a brokerage firm that is now owned by Morgan Stanley, and asked to speak to the branch manager. I explained that I was selling my business, was bored out of my mind and that the only thing I was really interested in was money. Did he have any career opportunities? He asked me to sit down. At that point, my money journey moved up to high gear.

At that time, Smith Barney helped two-thirds of the United States’ penta-millionaires manage their investments. The company had been in business for over a hundred years. Wealth seemed to be embedded in the bricks. It was a phenomenal training ground and the most successful corporate culture and financially wealthy peer group I’d ever experienced. Everyone had money, talked about it, invested in it, played with it, made it work. I was coached, mentored, trained and molded.

I was drawn to the issue of women and investing and did extra research and training in that area. Smith Barney had already determined that women were the next tidal wave of investors and had set up a special department to study that phenomenon. They knew the demographics and collected cutting-edge research on how women think and behave around money. At that time, women were one of three projected areas of investor market growth in the U.S. (the other two being Puerto Ricans and gays.) It was one of the first firms to identify that women think about and handle money differently from men, and I was a beneficiary of that research.

The demographic that fuelled this intense interest showed that two-thirds of all assets in the U.S. and Canada were going to be owned by women by 2019. Smith Barney was trying to get a handle on what this might mean. Women weren’t known as the primary financial decision makers, and the idea that they would become the majority stakeholders of the country’s assets was at first just an interesting statistic, an opportunity to be exploited. Over time, the implications have become more confusing to the financial services world. First of all, the switch to predominantly female ownership isn’t happening for the reasons you might hope: women were about to reach this status not by breaking through the glass ceiling or doing a great job running companies but because of the largest intergenerational transfer of wealth, followed by the largest intergender transfer, in history.

Because members of the prewar generation were savers, large amounts of inherited wealth are being passed on from one generation to the next. And because women are outliving men, a large percentage of that transfer will land in women’s hands. But what women haven’t fully understood is that this may be a one-generation opportunity only. They can either pass it back to the men for management, or they can do something with it that reflects their values, missions and objectives so that the world might be changed radically. Or not.

This opportunity to make a difference, to be of service to all humanity while learning about stocks and bonds, was utterly intoxicating. And it turned out that the study of financial markets was not as far removed from my educational background as I had originally thought. The study of wealth was fascinating to me. It is psychology on speed. Because money is controlled by humans (I sincerely hope it is, anyway), it is a rich ground for studying behaviour, decision-making, assumptions, belief systems and language. I examined the differences between people who had money and those who didn’t, and immersed myself in looking at it from all sides of the wealth continuum, from multi-generation poverty to high-net-worth families. I leapt out of bed every morning ready to tackle the financial world, convinced that I was now in the heat of my own personal, financial and spiritual quest.

In 2005, I moved back home to Vancouver and began work with a large brokerage firm owned by one of the big banks. I found myself immersed in a pretty traditional (i.e., masculine) way of doing business. I was convinced that women investors wanted a different approach and would appreciate a full-service one-stop-shop approach where all the issues of their financial lives could be addressed. I believed that people wanted to be treated respectfully and given objective, wise advice about their whole lives and not sold a product just because it was the Hot Tip of the Day or had a high commission for the broker. People, women especially, wanted to discuss money in the context of their life journey and in terms that made sense. I was fortunate to then meet my incredible business partner, Kamal Basra, and Sophia Financial Group was born.

Kamal and I had seen empirical, concrete evidence that men and women tend to handle money differently, and we knew that women felt underserved and misunderstood by their advisors and the institutions they worked with. So much of what goes on at the top level of the financial world is still dominated by men—of a certain race and even of a certain age and lifestyle. And with that come subtle, inherent and insidious assumptions, attitudes and behaviours.

We imagined offering a service in which the structure of the financial world could be translated into a language that is easier to understand, more relevant and more rewarding for the families we serve. The Sophia perspective is a holistic approach to financial well-being. We help women identify the role money plays in their own life, drawing in support from other sources where required. We encourage women to approach this process proactively, before some major life challenge propels them into it, because it’s not just about money. It’s about stepping up and taking control of your life.

We agreed that it was important to us to do one day per week of pro bono work, helping people who need high-quality advice but may not have access to it. This includes disadvantaged women, families in debt, new immigrants and refugees who need an orientation to our financial world. Our pro bono work also includes doing numerous education programs and presentations to groups that we identify as either needing the knowledge for themselves or that will use it to benefit others. Some of our work is counselling the emerging leaders of our community to get their own personal financial lives on track. We want them to have financial peace of mind so that they can do the work we can’t, like running meal programs, teaching the young and protecting rainforests. We also believe that you probably shouldn’t be running organizational budgets for others if your own financial world is in disarray.

ALL THOSE YEARS ago, when I first set out on my mission to figure out how to make money move, I would never have guessed that it meant becoming a financial advisor. But now I see how the pieces are coming together. The vision has become a reality. My psychology background has married my interest in finance, and the west and east sides of our city merge at Saturday morning classes at Sophia Wealth Academy. We are there encouraging, educating and supporting a new financial paradigm, with all of its challenges, rewards and blessings.

If a woman armed with a toy bag, a good hospital corner and the desire to make things better in a community can take on the financial world and become empowered, so can you.

2

OUR JOURNEY

EVERY WOMAN HAS A UNIQUE STARTING POINT

My mom used to say, “Everyone’s on a different journey. If all of a sudden you look up and see a whole lot of people walking on the same path as you, someone has got it wrong!” She encouraged me to be an individual and to be okay with my unique life journey. Everyone can be travelling in the same direction, but we all have our own divine calling.

Money is the same way. The path of travel is an individual one. We might all hold the same map or even be going to the same destination, but the vehicle, speed, rest stops and roads we take are determined by our own distinct set of circumstances.

There are, however, patterns in what many of us have experienced in our upbringing. I have never yet had a woman tell me that when her mom sat her down at the age of twelve to talk about the “facts of life,” her speech was, “Honey, in our family we believe in a 60-40 asset allocation strategy and are unimpressed with the benefits of currency hedging.”

But we are often taught how to be attractive. We get instruction on how to apply eye makeup, which colours go with which others and how to style our hair. Our “facts of life” talk typically comes with warning labels about men, sex and hygiene. That is what my mother and her peers spent their time on. They taught us what we needed to know to run a home, raise functional children, keep a job and look nice.

Then each family imparted its own set of essential, idiosyncratic life skills. I got training about how to balance my cheque book, how to run a business and how to get the best price on a tree job (thanks to Dad for that.) Not too shabby for a woman of my generation. Your family toolbox probably looked quite different. Each of us ends up with a unique patchwork of skills and competencies, but many of us tend to lack a general knowledge of economic structures and how to operate within them.

Most women say that when they have to start making some of those larger decisions on their own for the first time, they have little experience, a warped frame of reference and, most importantly, the perception that they don’t—and perhaps can’t—know enough to make a confident decision. I hear this repeatedly. Lack of confidence is a common concern, and it significantly affects how women deal with money. This means we have to either get information from peers, figure out how to hire a set of advisors that we trust or learn in some other way so that we can get the confidence to make empowered decisions.

Many older women say that younger women are different today. They don’t have the same issues and weren’t raised with the same degree of pressure to be a certain kind of woman. I am not so sure of that. I recently spoke to a group of sorority sisters at a local university. It was a delightful experience. The events committee had done a survey on what topics were of interest to the members and had had a resounding response that the group was keenly interested in learning about finances. They were expecting hundreds of young women to attend. On my way out the door my business partner jokingly said, “You’ll be lucky if there’s 20 students there.” We both chuckled. There were 35. And I was totally okay with that.

At one point during the presentation I could see that the energy was flagging. I looked up at the audience and pointed to a group of four students in the fifth row. I called out, “You girls! Why are you yawning?” Like the nice young women they were, they quickly found polite reasons like being in the middle of exams, it’s been a long day and a variety of the “dog ate my homework” excuses.

I challenged them further. “I am not insulted. My feelings are not hurt. I am just curious: I know I am not boring. So, what is putting you to sleep?” Then they sat up and took notice. The whole room waited in anticipation. Who is this crazy presenter confronting us? They hemmed and hawed and finally one brave soul from the dark corners of the back of the room yelled out, “I just want to marry rich!” The room exploded in laughter. Appreciative laughter. I thanked her for saying what was on her mind and got even more curious. “What is that about? Tell me more.” They could see in my face t...

Table of contents

• Title Page
• Disclaimer
• Dedication
• Contents
• Acknowledgments
• Foreword
• Introduction
• 1: My Journey
• 2: Our Journey
• 3: The Money Relationship
• 4: Money Through the Gender Lens
• 5: Financial Planning
• 6: Step One - Where Am I Now?
• 7: Step Two - Do I Have Cash Reserve?
• 8: Step Three - Where Am I Headed?
• 9: Step Four - How Do I Get There?
• 10: Step Five - How Do I Stay On Track?
• 11: Guides and Helpers
• 12: Stages of Life
• 13: A Care Package for the Road
• Glossary
• About Sophia Financial Group
• References
• Professional Acknowledgments
• About the Author