Real-estate magnate and “Shark Tank” regular Barbara Corcoran wants women to stop being shrinking violets when it comes to getting paid.
To put it bluntly, women need to act like a man when face-to-face with a job interviewer, she advises.
Forget what the company wants, Corcoran says. What do you want?
“Women should pretend they’re a man, because men do negotiate better,” Corcoran told Yahoo Finance.
She’s got a point about pay. While compensation can vary dramatically, everyone knows a woman (or two) shocked to learn that the men around her earn more, and sometimes far more.
The reason for that, according to executive recruiters, is that men are willing to negotiate.
“Women tend to want to please more,” Corcoran said. “Most men really want to cut to the chase and get what they want.”
Not Corcoran. “When I want something,” she said. “I raise my hand and stand up.”
There’s more to it, of course. Women can find their careers slowed by child-rearing. Skills atrophy once out of the workforce, even if they plan to return soon.
We spend a lot of time at my firm talking to women at various points along the arcs of their professional lives.
Lower pay for women overall does mean lower retirement balances. It’s a common problem among women nearing their retirement years.
Push back
It’s easy to think of Corcoran and her “Shark Tank” peers as inevitable successes in everything they do. Yet she initially was turned down for the popular reality investing show.
So Corcoran emailed the producer and bluffed her way back into contention, saying she already had booked a flight to LA for the audition.
It worked. “I’ve had all my big successes on the heels of rejection,” Corcoran told AARP.
While I respect Corcoran for her go-get-’em approach, the data clearly shows that it’s women — not men — who make better investors.
Why? Precisely because they hold back.
Fidelity Investments, a partner of ours, reviewed 8 million accounts on their huge investment platform. They found that women saved more, 0.4%, but earned more in returns, also 0.4%.
That seemingly small difference means that a man and a woman, both aged 22 and earning $50,000 a year, end up in far different places by retirement — the woman has $250,000 more than the man.
“It is a double whammy,” Alexandra Taussig, Fidelity’s senior vice president for women investors, told Reuters.
“The myth that men are better investors is just that — a myth.”
Male urge
This calculation assumes, of course, that the man and woman earn and save the same amount, to Corcoran’s point on salary negotiation.
But the reason women win at investing is simple: Besides the boosted savings, men are 35% more likely to trade.
Trading stocks satisfies the male urge to go after what they want. But careful research shows that excessive trading adds risk without adding return.
Worse, trading fees represent a steady drip of cash out of the man’s portfolio — money lost forever.
Shockingly, many people pay 1% a year of their total nest egg (not 1% of their return) in adviser costs, then an extra 1% to own actively managed mutual funds.
That can easily cost thousands of dollars a year. As my colleague Scott Puritz told National Public Radio in an interview, fees alone can cut your retirement savings by half.
Another twist: While men load up on stocks, women seek balanced strategies that lower risk over time. University of California researchers found risk reduction results in women beating men by about 1% a year in returns.
An extra 1% on top is not small — if you assume a 6% annual stock market gain, that additional 1% is a 17% difference in return!
Imagine the impact of slashing your investment cost and risk, then adding an extra 1% just by “acting like a woman” when it comes to your investments.
The great thing is, you don’t have to imagine it. Switching to a powerful yet low-cost investment approach is not terribly hard, and it will slash both cost and risk right away.
Not to mention, doing so takes a lot of unnecessary stress out of your life.
Source : MTV
