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Celebrity Q&A
Women and money
Women have a dysfunctional relationship with money because they put everyone else's needs before their own.
Celebrity interview

Control your own destiny

After years of listening to women, Suze Orman arrived at a troubling conclusion. Despite the remarkable social advancements of the past four decades, little has changed as far as how American women deal with their money. When it comes to personal finances, women generally are still not good at taking charge, she says.

At a glance:

In her latest book, "Women & Money: Owning the Power to Control Your Destiny," Orman examines this dysfunctional relationship and its consequences for women and their families. She then offers a clear, easy-to-follow, five-month "save yourself" plan that can spare them from unnecessary grief -- financial and otherwise.

Orman recently sat down with Bankrate and shared some of her thoughts about women and retirement, and what women can do to make their financial futures more stable and secure.

Much of the financial advice that one reads and hears today appears geared more toward women than men. Are women in need of more guidance? What are the unique challenges that they face with saving, investing and retirement planning?

In my book, I do make the statement that women do have a dysfunctional relationship with money. The dysfunction is not their inability to make good investments or to make the right decisions with money when it comes to investing. Women have the ability to invest, save and manage money as good, if not better, than anybody else. The problem, the "dysfunctionality," comes in that women believe that money is for everybody else's benefit before their own.

So the purpose of money is to take care of your children, to take care of your husband, to take care of your life-partner, to take care of your parents, to take care of your sister, your brother, your neighbors, your friends, your employers, your employees. And only after everybody else is taken care of will women then begin to think about themselves.

But doesn't this "dysfunctionality" with money also manifest itself in women's investment strategies? It's been noted in survey after survey that women invest much more conservatively than men, and that there's still a great deal of financial insecurity among women today.

Women want to make sure that they keep everything safe and sound for the day that they or, more likely than not, somebody else, may need it. Women, by nature, are nurturers.

So what would you recommend women do differently with their investments so they can have a secure retirement? Would, for example, "life-cycle" mutual funds be a good investment option for women today? After all, they adjust from more aggressive to more conservative with the passage of time.

I'm not fond of these because, if you look at their actual returns, they have not done as well as regular index funds have done.

But I also think it's very dangerous to say, "This is how people should invest," because people are dictated not by their money. They're dictated by their emotions and how they feel about their money. And if their emotions -- one emotion being fear -- if that is what comes up in relationship to their money, they will invariably buy at the wrong time and then sell at the wrong time, which nets them less money. And they'd quite possibly have been much better off buying municipal bonds at a 5 percent tax-free rate or a Treasury rather than going in and out of the stock market because they got afraid.

Next: "Women feel secure when they own their homes outright."
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