By Zehra Mahoon, Investment Advisor, BMO Nesbitt Burns
Printed in the Local Experts Newsletter on Aug 15, 2012

I’m sure you’re thinking: “there’s got to be more than six!”, you’re right.  We women make countless mistakes with love that affect life, and definitely money!  There are six mistakes that I see repeated as an investment advisor.  My purpose here is to create an awareness of what these mistakes are so that if you are guilty of one of them or if you see a friend or a family member who may be subject to them, you can make a difference.  I repeat: you can make a difference.

Let me tell you the story of Jane. Jane and Paul attended one of my seminars. I did not know at the time, but Paul had been diagnosed with terminal cancer, and had an undetermined amount of time on planet Earth.  I found out later that he had come to the seminar with the express intent of introducing Jane to an advisor who might be able to help her manage her finances once he was gone – you see she had never paid attention to these things in their 36 years of marriage. She was timid, and scared even to ask questions. 

I think that she didn’t want me to know that she didn’t know anything about anything! We worked together with regularly spaced meetings so that Jane would start formulating an understanding of how investments worked.  Paul passed away a year later at the ripe old age of 62.  When I visited with Jane and asked her how she was doing, the one thing that she was most grateful for was the fact that Paul had forced her into taking control of her financial affairs; because of this she did not feel lost and vulnerable.

Most other stories don’t end as smoothly. Many times, women have no idea if they have enough to take care of their needs.  For many, it is a surprise to find that they have a reduced pension from their spouse’s employer sponsored pension plan.

Worse are situations when women suddenly find their lives turned up-side-down on the discovery that their spouse wants to end their marriage.  Take the case of Joyce, 42 year old mother of two.  She didn’t see it coming – in her world everything was perfect.  A stay at home mom of a six year old boy and a three year old girl, she didn’t know what they owned and what the owed, and how she would get by. As with most couples she was in charge of the monthly spending and bills and he was in charge of the taxes and investments.  She moved in with her parents - moving out meant she would need to find a job. She felt emotionally drained and could not focus on anything.  Even though the divorce settlement would eventually lead to her getting assets worth close to $400,000, she did not have access to them just now. She only had $5000 in the bank, and she knew it wasn’t going to last for long – with lawyer’s bills piling up.  That’s when she came to see me.

We went through an in-depth financial planning exercise, making sure that beneficiaries were changed on insurance policies and investments, and that there was a continuity of benefits such as medical coverage for her and her children.  We had to evaluate if it would be better for her to settle for the proceeds of the sale of the house or other investments, and we had to work out how to split the pension that her spouse would have from work.  Then we discussed creating a testamentary trust for the children.  By the time everything was done nearly 19 months later – Joyce had had a crash course in love, life and money; thankfully she scored well.

Don’t leave it too late to take control; avoid making the six mistakes women make:

•       Putting everything and everyone higher on the list of priorities than themselves

•       Thinking it’s too hard to learn to manage money

•       Thinking that talking about money is crass; if they bring it up it will hurt their relationship with their significant other

•       Not wanting responsibility for investment decisions

•       Procrastination: I’m too busy now, I’ll do it later

•       Depending on others: he does it better than I, so I’ll just let him do it

Whether you resonate with one of the above or not, there is always room for improvement so stop take a deep breath and decide to change/improve just one thing today – then go do it.  Good luck!

About the Author:

Zehra Mahoon, Investment Advisor, BMO Nesbitt Burns, has over 20 years of experience working in investment banking and finance in Dubai, Karachi, and Singapore. Zehra started her career as a financial analyst and was nominated to work on stock market studies funded by the IFC, the World Bank and USAID. Zehra enjoys educating people about financial considerations and strategies and has conducted over 100 seminars on various financial subjects in Durham Region over the past four years. She has taught briefly at UOIT and made several television appearances on both Rogers and Chex TV.

Opinions are those of the author and may not reflect those of BMO Nesbitt Burns. The information and opinions contained herein have been compiled from sources believed reliable but no representation or warranty, express or implied, is made as to their accuracy or completeness. BMO Nesbitt Burns Inc. is an indirect wholly-owned subsidiary of Bank of Montreal. Member-Canadian Investor Protection Fund.

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