Fear Not The Bag Lady

I know a woman named Lily. She lays awake nights worrying that her bed will soon be a makeshift cardboard box on the street. This despite financial wealth that would have the 99% salivating.

Lily owns her own home, a comfortably sized condo in a luxury building. She has an investment portfolio worth north of $5 million bucks. Annual revenue generated from investments? A tidy $200,000 before taxes. Oh yeah, as if that weren’t enough, government coffers kick in a yearly $16,000. Part of this bonus dough comes from simply reaching a certain age, and the other part is drawn from society’s pension fund to which we all contribute during our working years.

What does Lily do with all this money? Well, not one to feel that money is burning a hole in her yoga pants pocket, for the most part she’s a prudent consumer. That said, she indulges from time to time in travels around the globe. Sure, travel is pricey, but Lily loves meeting new people, experiencing different cultures, and she can afford it. And because she doesn’t come close to spending what’s remaining after taxes from her $216,000 gross income, she donates a fair bit to her favorite charities.

All in all, Lily has no financial concerns. But this doesn’t stop her suffering from a malady commonly referred to as, ‘What’s The Point Of Having Money If You Worry So Much About Money That Anxiety Stresses You Out, Meddles With Your Peace of Mind, And Jumbles Inner Equilibrium.’


Let Go My Nose

I don’t mean to be glib. Money, and the chance of losing all of her money, is a real concern for Lily.

Frightened of losing her wealth, Lily fixates on the ‘what ifs’. What if my investment portfolio drops in value? And if that happens, what if I can no longer afford condo property taxes and monthly payments? If I have to sell the condo, and I place the proceeds in my bank account, what if someone then steals my identity, gains access to my account and all my money is taken? If I have no money, what will I do? Live on the street? Eat at a soup kitchen? Or if I get sick? What happens if I don’t have enough money to pay for health care? Or, or, or …

Are these real concerns? Sure. Conceivably, any of those scenarios could play out. But let’s step back for a moment, put a lid on fear, and give reason some room to breathe.

Lily is 75 years old. Her health is excellent. She has first rate insurance coverage that would take care of most, if not all, medical related costs. Her portfolio is mostly in high rated bonds and cash. Meaning? The portfolio is minimally exposed to stock market volatility, and risk of loss is highly unlikely. Her financial institution fully insures all customer accounts against losses arising from identity theft. And, if needed or desired, Lily could well afford private nursing care without dipping into her principal.

Still, try telling this to Lily and you hit a wall of fear that blocks reason from taking hold.

That’s the thing with money, our connection to it is intensely emotional, not rational. So, Lily, like too many others, lets money concerns lead her around by the nose.


bmAttachment brings misery. Those who know the joy of peace of mind, whether wealthy or poor, have learned to let go the delight of having money and possessions.

Magic Numbers Are Delusions

The Boston College Center on Wealth and Philanthropy undertook a study titled, The Joys and Dilemmas of Wealth. The joys being obvious, the study focused on dilemmas.

For our purposes, here’s what stood out from the results: despite their enormous financial wealth (study participants had a net worth of $25 million plus), the majority of participants did not see themselves as financially secure. Go on, read that bit again. Now roll your eyes and shake your head because that’s the natural response.

You want nuttier? Here we go: participants stated that, to feel financially secure, they would need about another 25% of their current assets. 25% huh? So, with a net worth of $25m, we’re talking $6m and change. Whoa!

Just for fun, let’s break this down. Say participant ‘A’ has $25m. Presumably, peace of mind comes from being bumped up past $31m. As for participant ‘B’, she has $50m. Well, she needs to hurdle over $62m to bask in the warm and fuzzies.

What’s going on here?! The unfortunate part is that these folks will never feel peace of mind, regardless of how much money they have, because they are tying peace of mind to a dollar figure. The thing is, peace of mind does not suddenly arrive when you hit a magic number.


Bag Lady Syndrome

According to results of a study by Allianz (Allianz SE – OTCMKTS:AZSEY), a giant German based life insurance company, nearly 30% of women between ages 25-75 who earn more than $200,000 annually fear the proverbial dropping of the other shoe that will result in them living on the street, alone and penniless.

And almost 50% of the women, regardless of their age, income, or marital status, fear becoming ‘bag ladies’. And these are women who run the family household and have a solid career, some of whom earn more than their spouse.

Why didn’t Allianz include men in the study? Well, it seems that while women tend to be grounded, willing to acknowledge limitations, and question themselves and others with a view to learning, men are, um, uh, um … different.

How so? Generally speaking, men make for terrible study subjects on this issue because they are prone to self-delusional thinking. Specifically, men the world over are known to inhabit two primary delusions:

  • Men know where they are going, thus never ask for directions.
  • Financial know-how is genetically programmed into their wiring.

My guess is that if someone ventured to study men on this subject, and were able to somehow, magically, tease out the male animal’s delusionary thought processes, there may come into being a condition known as Bag Man Syndrome, in which men exhibit the same money fears as women. Until that day arrives, we’re focused on women.


For those readers who disagree about the nature of men, please write a letter to the editor (that would be me) explaining the basis of your disagreement, providing proof that you are not delusional, and I will be sure not to respond because, you see, a writer needs latitude and I humbly request that you smile and grant me this latitude.

Deconstructing the Mythical Bag Lady

I don’t claim to know precisely why this sense of impending financial doom is prevalent among women. But I’ll do my best to shed some light on the issue. In this regard, consider the following:

  • Travel through history and you’ll see that women were blocked from acquiring wealth, power and freedom. Today, this oppression continues outright in most countries though in subtler forms in Western countries.
  • Sure, women are now empowered like never before but there is still a ways to go. Economic imbalances persist in North America and Europe with women typically paid less than men for the same work.
  • As a result of taking time out from the work force to populate our planet and care for little ones, women earn less thus save less for retirement.

There are many excellent books on this topic, with the most recent one to make a splash written by Sheryl Sandberg, Facebook Chief Operating Officer, and woman extraordinaire, Lean In: Women, Work, and the Will to Lead – https://www.amazon.com/Lean-Women-Work-Will-Lead/dp/0385349947.

  • We humans become acclimated to our environment. If generation after generation of women are taught that money matters are not their concern, and are not afforded the opportunity to assume authority over financial matters, then over the decades and centuries, this kind of thinking burrows into the subconscious, leading women to internalize a belief that they are limited in their financial ability.

Okay, so if we know how the bag lady myth came about then the question becomes, how is the subconscious rehabilitated and destructive thoughts banished?



Do not allow the words or actions of others to define who you are, especially when those words or actions lead to self-limiting beliefs. Honestly acknowledge these beliefs, then challenge them. If false, discard them and replace with positive self-perception. Changing your thoughts, replacing the negative with positive, leads to confidence and ability.

Reconstructing Your Relation With Money

So if you’ve been plagued by this negative line of thinking, it’s time to stop and investigate why. It’s time to change your relationship with money, open up this particular space, and plant new ideas supportive of financial success and peace of mind such as:

  • There is no mysterious formula to successfully managing money. Read lots, study lots, and go to it, just like any other venture (oh, and staying part of the BuddhaMoney community will seriously increase your odds of success!)
  • Empowering yourself is good for you.
  • Banish fear through planning and saving.
  • If you’re feeling stressed, hire a qualified financial professional to help out.
  • The whole ‘bag lady’ myth and the shoe dropping superstition, let that silly thinking go so you can get on with life and not be dragged down by yourself.

Just so you know, I’m not giving up on Lily. I’m working with her. I’m planting seeds. I’m watering the seeds. I’m hopeful that she’ll one day be able to minimize the irrational money fears that grip her way too tight. And when that day arrives, when Lily rejoices in all that she is and all that she has, she’ll know true freedom.

ps. Dear BuddhaMoney members, this article was published back in January, 2017. It’s posting for the second time results from me encountering this issue over and over, and wanting to do what I’m able to empower people to face this issue, do what they can to lessen the grip of negative emotions, and feel that much lighter in the way they relate to money. 



Women: Beware Male Financial Advisors

85% of financial advisors are men. Of this 85%, the vast majority fail their female clientele. And this failure is largely two-pronged: first, it’s the result of knuckledragging men working in a testosterone laced environment that doesn’t try to learn, or is biologically incapable of learning, that women approach investing differently than men and; second, for both knuckledraggers and the more evolved males, subconscious negative gender perceptions come into play.

BCG Study Confirms Male Financial Advisors Are Bumblers

The Boston Consulting Group (BCG) is a management consulting firm with more than 60 offices worldwide. A few years back, BCG undertook a Comprehensive Study focused on women’s experience with financial advisors (FA).

The study’s results revealed that women expressed many of the same complaints about FAs as did men, such as: dissatisfaction with communication, quality of advice, lack of tailored solutions, and having to wade through an absurd pile of bureaucracy.

While all that could be fairly anticipated, what raised hairy eyebrows were these additional frustrations voiced by women: a sense of subordination, unequal access to information and deals, inadequate attention, and less favourable financial terms.

And we’re not talking about a few dissatisfied outliers. Nope. What we have here is a majority revolt as borne out by the following unfudged numbers:

  • 73% of women say they’re not satisfied with financial advisory services.
  • 80% of widowed women fire the FA within one year of their husband’s death, then hire a new FA.
  • 87% of women said they could not find a FA with whom they ‘connect’.


It’s All About Relationships

Referring to the above bullet points, let’s deal with issues one and three first.

Annoying, Socially Inept FA

It’s no surprise why the majority of women are annoyed, or downright frustrated, by their FA.

The financial industry trains FAs to think in a detached, analytical manner, with the only item of any consequence being money. And as long as the FA earns money for clients, as long as portfolios perform according to plan, then clients will be happy. Granted, this approach works for most men.

But not so for women. Instead, women take investing proficiency for granted in a FA. After all, it’s their job and the expectation is for the FA to perform well at their job. What matters more is building a trusting relationship, connecting, with the person charged with responsibility for their money.

Unfortunately, too many male FAs have a knack for chipping away at trust, thereby alienating female clients. They do so in a number of ways including:

  • Lack of Respect. Disrespecting women through time honoured patronization and condescension, speaking to female clients as if only a man could do the job and the female client should not bother to ask trivial questions because, surely, investing is beyond a woman’s capacity;
  • Harmful Stereotypes. Stereotyping money management needs according to gender. As if one-size-fits-all women investors. As if all women should be shuttled into low risk securities. As if investment decisions are solely based on social issues, such as sustainable or green investments, rather than considering these issues together with portfolio strategies focused on performance. As if women are not interested in investing. As if women are not the decision-maker where a married couple is involved; and
  • Dishonesty. Being evasive about fees and charging women higher fees than men.

Good Riddance

On to the second issue, 4 out of 5 women fire the FA after hubby checks out of this planet. Kudos to them!

Look, imagine you and your spouse deal with a FA for an extended period of time during which the FA consistently, repeatedly, unfailingly speaks only to hubby regarding investment matters because hubby was marked as the go to guy on all joint accounts as soon as he gave FA a firm, manly handshake and mentioned last nights score in the football game.

And when you try to weigh in, you’re undermined, belittled, treated as if you are an unknowing child. What’s shocking and unfortunate is that the FA stayed in the picture for as long as he did.


So What if Male Financial Advisors Don’t Understand Women?

So … what does it matter that male FAs don’t understand female clients?

Well, in the financial advisory business, the more money you manage, the more money you earn. Because fees are most often generated as a percentage of assets held, the goal is to continually increase the amount of money you manage.

To be clear about this, if you’re a FA, and you manage assets for clients in the neighborhood of $50 million (a successful FA with 5-8 years in the business hits this target), and you charge a 1% fee on assets, that translates to gross earnings of $500,000. A tidy sum.

Still, regardless of how much they earn, a typical FA is always searching for more dough, either to grow their business or to replace clients who have chosen to leave. And if the FA fails to connect with women on the money management front, then he’s seriously denting his earning potential.

Why? Because women now account for 57% of university undergraduates and 59% of graduate school students in the USA, and higher education typically means higher earning power. Because 40% of women earn more money than their husbands. Because more and more women have joined the ranks of senior corporate executives, professionals, and go it alone entrepreneurs, earning larger and larger paychecks. Because the greatest wealth transfer ever is happening now, with trillions of dollars being inherited by Baby Boomers and Gen Xers, and owing to women living longer than men, the bulk of this money eventually ends up under a woman’s full control. Because, today, women control almost $40 Trillion (USD) or 30% of the world’s wealth, and their share of the global money pie is projected to continue growing.

So if you’re a male FA, um, yes, definitely, you want to learn to walk upright to ensure your clientele includes women.


What Women Want, Investment Wise

Here’s the thing: you don’t get to manage the money unless you invest in the client relationship on the clients terms.

This means listening, really listening to the client, trying to understand her concerns, and not thinking you know what is best for her. It means being honest about fees, empathizing with her fears around money, tamping down the standard male bluster, talking a whole lot less about your self, and creating a financial plan that connects the client to her whole life instead of obsessively focusing on making money as an end in itself.

Is Evolution Real?

The way I see it, about half the human population wants to turn the clock back to some illusory golden era, the other half wants to move forward.

If your FA belongs to the delusional pack, and is more comfortable pretending he’s master of the universe, then its time for a switch. Whether married, single, divorced or widowed, fire Mr. Knuckledragger and find your self an emotionally balanced, 21st century FA, whether male or female, someone you can trust, someone who truly cares about you and your financial future.

Of course, for all you BuddhaMoney members, you may recall the blog posted a few months ago about whether or not you should hire a FA or a Robo-Advisor.

If a Robo-Advisor suits you, well then, all these issues I’ve been talking about, they go poof! And you have a pleasant investing experience.

In this regard, for Americans, take a look at ElleVest which is a Robo-Advisor directed to women. I haven’t used the service so I can’t vouch for them, but they’re worth checking out. For Canadians, so sorry, you Canucks are behind the curve on this one as there’s no comparable service offered in Canada just yet.