Want to guess who normally initiates a financial planning meeting – men or women?
Doug and Brittney Castro, founder and CEO of Financially Wise Women, discuss differences in how men and women approach financial planning and investing. What do these two CFPs ® (Certified Financial Planners) notice about the gender differences in investing?
Brittney delves into the common problems women face when making financial decisions. She shares how women can overcome these issues and create a more secure future… and do it with confidence! Brittney emphasizes the importance of a financial planner, and advises the steps someone should take after making the initial call in order to best prepare for their meeting.
11 Steps to Take When You Receive an Inheritance
Doug offers a list of tips for people who have recently received an inheritance. These tips will help investors get their bearing after receiving a sudden windfall. If you have recently come into some an inheritance or other lump sum, make sure to download the list.
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To learn more about Brittney Castro, visit her website www.financiallywisewomen.com.
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Watch Why do Men and Women Approach Financial Planning Differently? on YouTube.Read the Transcript
Interview with Brittney Castro
Brittney Castro, a Certified Financial Planner, shares her thoughts on women, finance and investment. She also shares tips on how to have a financially secure future.
Douglas Goldstein: I'm very excited to be talking with Brittney Castro. She is the founder and CEO of Financially Wise Women, which is based in Los Angeles.
Her goal is to teach women and couples the art of managing their money, and she says it in a fun and simple way.
Brittney, I’ve got to dive in with this question. If you talk about financially wise women, what are you doing with couples?
Brittney Castro: Great question. I'm doing the same thing with couples. It’s just usually the woman who will find us first and schedule the initial call with our teams.
Douglas Goldstein: Why is that? Why do women find you first?
Brittney Castro: We market mainly to women and thus it pops up in their Google searches. We actually are hoping that the woman is searching for a financial planner, and we naturally pop up, and they immediately relate to our company and what they find online about us.
Douglas Goldstein: Got it. Let me ask you a question as a one CFP to another. Both you and I are Certified Financial Planners. I think our approach is very similar in the way we deal with clients, in that we try to get them into the planning mode, to think about their goals before they start trying to figure out what investments they should choose. So, I’ll make the assumption that that is your method as well.
One of the things I find today, and quite frankly I’m a little bit surprised, is that the men still seem to take charge of the meetings, and that doesn't make sense.
I would have thought that there would be changes already. Is this your experience too or is it different in Israel compared to L.A?
Men Seem to Take Charge in Financial Matters
Brittney Castro: It's interesting that you say that, and it really depends on the couples themselves, but I would say that it actually is a little bit more toward the other way, here in Los Angeles specifically.
I think there are a lot of powerful women in the workplace: attorneys, professionals, and they are also leading in the financial discussions for the household.
It doesn't mean it is the only way, but I definitely know that the type of clients we are serving are women who are seeking this information, who want more help with the finances, and are the ones in charge of those financial management discussions.
Douglas Goldstein: On my side of the ocean, it seems to be a little bit more that the men try to take control and on yours, all the way in the West Coast, it's the women that take control. I bet in New York, it's probably very 50-50, somewhere in the middle.
What are some of the issues that you deal with, specifically related to women in terms of investment?
Financial and Investment Issues Related to Women
Brittney Castro: With women, specifically, I would say that a lot of women are just really shy about this conversation with investing. It's really interesting because a lot of the women I actually work with are investing in their 401(k) plans, retirement plans at work, but they still don't see that as an investment.
They still don’t even understand how it's going to help them reach their retirement goals. So I think there's just this overall sense that women don’t feel empowered with investing, don’t really feel like they found financial firms who help them learn the language of investing, and therefore they're really lacking the confidence.
Even if they are already doing it, they still think they're not doing it or are not doing enough.
A lot of what we are doing is educating women on this idea that investing can be easy, you can enjoy it, you can be really good at it, and you already are doing it.
So just acknowledge the fact that you are doing it already, and take it to the next level. Get more clarity about what you can do, moving forward to enhance it, or get more clarity on how to take it to the next level in general.
Douglas Goldstein: Brittney, if you were going to advise someone to start doing some really smart things right now, what would be the number one thing someone should do, for a man or a woman who wants to make sure that she's going to have a financially secure future?
What Should You Do to Have a Financially Secure Future?
Brittney Castro: Of course, my answer is biased but you'll appreciate it. Hire a Certified Financial Planner. The importance of it is a CFP® professional is someone who's actually done extra studies in school, education courses, and even sat for a board exam to get this designation.
Usually what I find is that these people are very passionate about financial planning and helping their clients in all areas of their financial lives.
Not just investing, not just insurance, not just saving. And to put it into perspective, I don’t know what it is actually in Israel, but in the U.S., less than 20% of the financial advisors out there are Certified Financial Planners.
There is a reason to work with a Certified Financial Planner, and I think it's just because this person will help you look at the big picture, look at everything, look at what you're already doing with savings and investing.
They’ll help you with where you want to go, financially speaking.
A good Certified Financial Planner is going to care enough to educate you on the solutions, and help you figure out the right solution. I think when you invest the time, money and energy into hiring a Certified Financial Planner, you also help prevent a lot of mistakes that could happen down the road with your investment plan, or whatever it is because you didn’t have that clear picture and game plan that you are working on.
The Role of a Financial Advisor
Douglas Goldstein: That’s a great point about education. This is something that I learned from my mother, who was a financial advisor. She started 30-40 years ago. She and I were partners for a while on Wall Street. This was before the whole CFP thing became big, but she somehow managed this concept of educating clients, and when I started in the business that's what she taught me.
She told me, “As an advisor, you can't tell people which stocks are going to go up or down because you have no idea. We don't have prophecy and we are here to service the client, but the real way to service the client is to get to know what his situation is and then give advice that makes sense for who he is.” Don't let the brokerage firm try to push you to sell some product, and don't just sell the easiest thing.
It's really seeing yourself as working for the client as opposed to working for the company. And I think that's what a lot of financial planners, obviously I think CFPs as well, are people who really take the time to get to understand the client and educate the clients, so they ultimately are the ones making the right decisions. I'm with you on that.
That was point number one: hire a financial planner. What’s the second step that someone needs to take if they desire to have a financially secure future?
Getting the Right Budgeting System in Place
Brittney Castro: Analyze your budget and get the right budgeting system in place. This comes with a lot of emotions and behavior management, because I think this is pretty basic. We all know the fact that we need a budget to manage our money every month and really figure out how we are spending our dollars.
Is it in alignment with what we say is important to us? How do we find ways to save more money or the goals that we have?
I know this sounds basic, but the reality is most people still do not have a good budgeting system in place, and therefore they constantly struggle with this idea of, “I'm not saving enough,” or “I'm not even sure that what I'm saving is appropriate for the goals that I have.” They are like, “I'm not even able to save at all because I'm mismanaging my funds.”
What I like to remind the clients that I work with is that a budget is simply a tool. It gives you more information if you're not making enough money, and it will help you get clear about how much more money you need to make to make the budget work.
Or if you're making the appropriate amount of money, but you're just misallocating the money towards things that aren't important to you, you can reduce some of your expenses so that you can save a little bit more, for those goals that you have.
The budget gives you that awareness to make those changes, but the hard part about a budget is that it brings up the emotions of money. It gets very stressful for people.
There's a lot of anxiety and overwhelm that goes into budgets and I think when you really can move past that and look at this budget as a tool, as something that's going to be around for the rest of your life, no matter how much money you're making now, then you begin to see it differently.
Then you see it as a vehicle to refine the systems that you're already doing or get new systems in place, to help set those appropriate boundaries and are just ways to prevent you from getting in your own way, basically.
How to Follow Brittney Castro
Douglas Goldstein: People often end up getting in their own way and end up ruining themselves financially. A huge topic that a lot of financial planners look at is how to help people develop a system for managing their money so it's not an emotional decision every time they have to choose something.
So, Brittney, you’ve shared two takeaways with our audience today. One is working with a professional financial planner or CFP, and the other is getting a good budgeting system in place. I know you have a lot more to teach. Unfortunately, we're just about out of time. In the last few seconds, how can people follow you and follow your work?
Brittney Castro: Please visit me at www.financiallywisewomen.com. You'll see all my social media handles and you can schedule time to connect with me. We have tons of valuable information on our website.
Douglas Goldstein: Brittney Castro, thanks so much for taking the time.
Brittney Castro: Thank you, Doug, for having me. I appreciate being here.