Want to Build Wealth for Your Family? Then Your Household NEEDS This.

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A Fidelity study recently showed that more women are taking charge of the family finances. This sounds great, but if you read the study closely, you’ll see that this refers to bill pay — and not investments.

“Women are less likely to be the primary decision maker,” says the study. “Regarding retirement decisions, men are significantly more likely to see their role as ‘primary’ compared to women.”

Ahem! To me this says that women are the secretaries, while the husbands make the “big decisions.”

“You just manage the passwords and bill pay, sweetheart. I’ll take care of the heavy lifting when it comes to investments.”

I do not believe this has anything to do with aptitude. Women make awesome investors! Unfortunately, most of them just don’t know it yet, so they simply handle the clerical work in their families and stop there.

Related: 5 Simple Ways to Improve Your Personal Finances — Starting Today

This has to stop, no matter the gender. Managing passwords is only the first step in managing your finances. It’s admin work, and we need more than admin work in order to thrive. I am convinced that every household needs a true money manager, emphasis here on the word manager. I’m talking about upper level management. I’m talking about chief financial officers, Chief Home Officers (CHO).

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The Path Towards Building Wealth for Your Family

So let’s talk about the broader scope of responsibility towards family wealth building.

What do managers do? They make sure deliverables get done, yes, but they also strategize for continued success. They take stock of their resources and make plans to turn those resources into profit. Do you do this in your family? Someone has to if you don’t want to live paycheck-to-paycheck into your golden years.

I’m not convinced that any one gender is better at this than another, but I am convinced that women don’t empower themselves enough to try — which means too often that no one is the CHO. Which means that bills get paid, maybe savings accounts get contributed to, but no strategizing and goal setting is done thereafter. This is an expensive oversight. How will you retire? How will you deal with deflation of your savings accounts? These are questions a good CHO regularly asks themselves and addresses with their partners.

Why don’t women make the “big decisions”? I’ve thought about this a lot. Maybe we’re scared. Maybe we’re nervous about investing on behalf of our families. Maybe we are unfamiliar with the language of the financial industry. All of that is understandable but not insurmountable.

Here is a little data that should make the ladies feel better: Research shows that when women do make the “big decisions” about investment, they are more profitable than their male counterparts. Sadly, most of us just don’t know how capable we are yet because finance seems so inaccessible. A colleague recently admitted to me that she was the begrudging Chief Home Officer because finance seemed too intimidating. Believe me, I get that!

Learning About Finance the Old Fashioned Way

When I stopped working full-time, I went through a brief period of feeling powerless for not contributing a regular paycheck to my family. In order to combat that powerlessness, I started to study finance. I remember sitting at my desk and saying to myself, “OK, if you’re not going to have a regular paycheck, you’d better figure out how to do the best you can with the money we have now and the investments we are making.” So I started to binge read personal finance books, and to my surprise, I learned that investment did not have to be scary. I learned to read the hieroglyphics on my bank statements. I researched and executed trades in our investment accounts to great effect. And then I went to real estate school and learned to co-pilot our real estate investments.

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Related: 4 Steps for Getting Your Finances in Order BEFORE You Quit Your 9-5 to Invest

I gained financial literacy the very old fashioned way — with my library card. I do not have a fancy degree in finance, but when I sit down to my computer to execute plans on behalf of my family, I feel perfectly capable (most of the time).

If I were to write a job description for a Chief Home Officer, it would go a little something like this:

Seeking financial manager to take stock of, strategize, and execute quarterly budgets and investment strategy.

This is what I do. I assess my family’s net worth every quarter. I figure out how we can maintain a healthy budget, increase savings and investments, and invest the resources we have in those investments. And yes, I manage the passwords, too.

Conclusion

“Chief Home Officer” is the term marketers use to refer to the person who makes the financial decisions in the household. But it is also a term of empowerment. It means more than just deciding what detergent to buy. It means deciding which investments to buy and how best to fund those investments. There is no reason that a woman can’t employ the same strategies she puts towards grocery budgets towards investment budgets. And there is no reason that a man can’t, either. But someone in your house has to be promoted to this C-level role — and the sooner, the better!

Who plays this role in YOUR household? How did you educate yourself on investing and finance?

Let me know your experiences with a comment!

About Author

Natali Morris

Natali Morris is a technology and finance contributor for CNBC and MSNBC. She also writes about personal finance on her own personal site, www.natalimorris.com. She is the wife of Clayton Morris and mother of two (soon-to-be three) children. Her constant preoccupation is in not screwing them up.

19 Comments

  1. Yatznira Rodriguez

    @Natali Morris – Fantastic article. Very empowering and insightful. I think there are many of us women who fulfill these duties yet fail to credit ourselves. Reading your article has given me a fresh perspective and I hope it does the same for others. Great Work!

  2. steve g.

    I have actually read where Women are better at investing decisions than men. Give a woman 10,000 to invest in the stock market, and give the same to men, then give them 1 year and see who gets the large returns. Women have in most cases, beat men’s returns by about 5 to 10 % on a pretty consistent basis. This is partly due to our brains being wired differently ,so that women can more accurately run numbers and see patterns we don’t see.

    This is not true 100% of the time, but perhaps in the 60 to 65% range. Men, women are better at certain things. Its time to give them their due, and realize by including women in the decision making, they can help prepare the 2 of you for a better retirement.

    • Natali Morris

      Most people attribute this to women making less frequent trades and more researched initial investments. You’re right, this is not across the board but I just wish more women were willing to give it a try! Thanks for your comment, Steve!

  3. Penny Clark

    Enjoyed the read, Natalie! I manage the bills for our household as well as our rental properties. My husband and I invest together but we have different roles – he helps find deals and I research the details to make sure it works. This sometimes results in us knocking heads but we are able to work through it. I think women find it easier to stay passive in their family finances including investments because they lack confidence, interest or become intimidated by their male partners if they have a disagreement.

  4. Susan Maneck

    I think one of the major reasons women are reluctant to make investment decisions is that wives still typically make less than their husbands and there is often a feeling the money isn’t really hers. My daughter-in-law was like that when she first got married. She would call my son asking permission before she bought a $10 pair of jeans! But when she saw how the rental property that had been my son’s first home was paying off two mortgages she caught the real estate bug. She took a leading role in locating a third house which is now under contract.

  5. Donald Cooley

    I think it’s very important in a marriage to play off each others strengths. There are certain things I’m good at and there’s things my wife is good at, if we work together as true partners we should be nearly unstoppable. I wish more women would realize their potential and what they bring to the relationship.
    Great article thanks for sharing.

  6. Rob Davis

    Good article @Natali Morris. Have you read the book, “Warren Buffett Invests Like a Girl: And Why You Should, Too”? It attributes at least some of Warren Buffett’s success to similar ideas, with his approval. It’s great how you have applied it to the family enterprise.

  7. Heather Beard

    I’m a CHIEF HOME OFFICER…or at least aspiring CHO…still a lot to learn. It really is empowering as a wife and mom to take on this role though!!

    Thanks for sharing your gusto and excitement about this! 🙂 Super helpful.

    Which of the books you’ve read should I start with? I’m all about building my financial literacy right now because I’m still in the phase of overcoming intimidation with all things finance-related (didn’t grow up with a healthy perception of what money is about, how to manage it, and how to get it).

    • Natali Morris

      Good for you! I posted a few books in the last comment below but for you, I would start with Rich Dad, Poor Dad and then maybe do some of the investing for dummies books because those REALLY opened my eyes to how much money the big banks make off of you in the stock market! It motivated me to start to look for other investments. Particularly, ETFs for Dummies. I also liked any of the following:
      Tax-Free Wealth by Tom Wheelwright
      A Happy Pocket Full Of Money by David Cameron Gikandi
      The Chinese Way to Wealth and Prosperity by Michael Justin Lee

      Those are just a few. Like I said to the commenter below, I post on GoodReads a lot. Do you keep track of your books there? Feel free to friend me if you do!

      Thank you for this nice note!

  8. In my household, my hubby takes care of the day to day bills, property management and expenses, while I lead on the investments, real estate investments and financial strategies. What helps for us is that we meet weekly to discuss goals and and we are also aligned in our life plan, which we also review twice a year.

    I learned nine years ago do what you like to do and then set defined roles and responsibilities on money matters. My husband is keen on investing but not learning about it while I am so we leveraged what we liked and took action.

    How I educated myself is learning from others who’ve done it before, seeing younger female investors who are successful and taking action,m having strong female mentors, and role models like my grandma, and reading lots of books, then taking more Action!

    Thanks Natali for this insightful article.

  9. Thomas Payne

    Soooo…a family where the wife pays the bills and the husband makes the investment decisions is somehow deficient or not as capable? They do not have a structured or well managed financial plan? Wow….that’s all I have is just wow.

    Sorry, but I am afraid you’ve ruined what would have been a beneficial article containing good observations (yes, many women ARE excellent money managers) through introduction of politically correct feminist rhetoric. Now it is hard to see past the implicit aspersions you’ve cast upon those who do not adhere to your described familial structure and take the remainder of the article seriously. I generally expect better of BiggerPockets contributors than to go down paths such as gender superiority. Sad.

  10. Jenine Kenna

    Thanks for the great article Natali! Much of this hits home for me. Do you have any recommendations on personal finance books? There are so many out there, and of course there are a lot of different techniques, but I’d be thankful for a place to start. I just finished Rich Dad, Poor Dad, an plan to dive deeper into Kiyosaki’s teachings, but I also don’t want to learn only one philosophy. Thank you!

    • Natali Morris

      Oh let’s see, I liked any of the following:
      Tax-Free Wealth by Tom Wheelwright
      A Happy Pocket Full Of Money by David Cameron Gikandi
      The Chinese Way to Wealth and Prosperity by Michael Justin Lee

      Those are just a few. I post on GoodReads a lot. Do you keep track of your books there? Feel free to friend me if you do!

      Thank you for this nice note!

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