OPINION: Why women are better investors than men
WHY are women better investors than men?
My wife (Nicola Lessing) and I built a business in the 1990s and in 1998 received a spectacular multi-million dollar, one-off offer for that business. Nicola wanted to take the offer but I prevailed - we had some technology that had the chance of making us even richer.
Once the offer was gone I realised we could have sold the business and developed the technology ourselves and we would have had the best of both worlds, something Nicola knew intuitively.
Our business developed and received millions in venture capital loans and R&D grants, but taking that earlier offer would, with hindsight, have been a much better choice.
Why does this show that women are better investors than men?
I learnt that while whilst I was brilliant with numbers and generally considered something of a mathematical genius, Nicola, at that time, had a much better feeling for, and understanding of the value of money.
There are numerous studies showing that women as a group have higher long-term investment returns than men and the underlying reason is always the same: Women invest more cautiously and with more care.
Men trade more and take bigger risks. Sometimes the latter pays off spectacularly but often slow and steady wins the race.
Another interesting observation is that while whilst in many cases women are better investors, very often they lack confidence and do not appreciate their own abilities.
Once they gain perspective and confidence they become even better investors and enjoy it more.
Of course many men understand the value of money and roles can be reversed. Where couples are involved it is often very beneficial for both parties to respect the wisdom the other one contributes. Together many couples do even better than either would alone.
In summary, understanding the value of money is an important key to investing.
* Christoph Schnelle is an authorised representative (308223) of Big Lamp Pty Ltd, trading as In Your Interest Financial Planning (authorised representative 308161) and FYG Planners Pty Ltd AFSL 224543. This information is general in nature and readers should seek professional advice specific to their circumstances.