Nice Girls Don't Get Rich

PRAISE FOR
NICE GIRLS DON'T GET RICH

"A fresh look at how women think about money… deals with the real reasons women have so much difficulty with their finances. I wish [I had] it before I made so many of the mistakes she discusses."

—Barbara Stanny, author of Prince Charming Isn't Coming:
How Women Get Smart About Money and
Secrets of Six-Figure Women

"Explains the mixed messages women get about money… Tells how women can take charge of their financial lives."

—More magazine

"The guide you need to turn dreams into reality. Learn to think rich and discover all the wonderful things that are possible."

—Gail Evans, author of
Play Like a Man, Win Like a Woman and She Wins, You Win

"Upbeat, breezy."

—USA Today

"Tips on how to approach financial matters with confidence and savvy."

—Aptos Times (Santa Cruz, CA)

"Practical advice… enlivened with client stories and personal anecdotes."

—Booklist

Also by Lois P. Frankel, PhD

STOP SABOTAGING YOUR CAREER

8 Proven Strategies to Succeed-In Spite of Yourself

SEE JANE LEAD

99 Ways for Women to Take Charge at Work

NICE GIRLS DON'T GET THE CORNER OFFICE

101 Unconscious Mistakes Women Make That Sabotage Their Careers

KINDLING THE SPIRIT

Acts of Kindness and Words of Courage for Women

WOMEN, ANGER AND DEPRESSION

Strategies for Self-Empowerment

Copyright

This book is written for informational purposes only. It contains general information and, because everyone's financial situation is unique, readers are encouraged to consult with a financial professional before making major financial decisions. Hachette Book Group and the author disclaim any responsibility for actions taken without first seeking professional advice or for misunderstandings on the part of the reader.

Copyright © 2005 by Lois P. Frankel, PhD

All rights reserved. Except as permitted under the U.S. Copyright Act of 1976, no part of this publication may be reproduced, distributed, or transmitted in any form or by any means, or stored in a database or retrieval system, without the prior written permission of the publisher.

Business Plus

Hachette Book Group

237 Park Avenue

New York, NY 10017

Visit out website at www.HachetteBookGroup.com

www.twitter.com/grandcentralpub

The Business Plus name and logo are trademarks of Hachette Book Group, Inc.

First eBook Edition: October 2009

ISBN: 978-0-446-56864-7

This book is dedicated to every woman who works too hard,
earns too little, and never seems to get ahead financially.
I hope that within these pages you find the courage and
wisdom needed to take whatever action is required to
lead a rich life—however you choose to define it.

Acknowledgments

There are so many people I want to thank for their help with this book. I counted on old friends, new friends, and colleagues around the world to fill me in on the nuances of financial thinking—and they did. We so casually say, "I couldn't have done it without you," but in this case it's true!

• Larry Kirshbaum, Jamie Raab, Diana Baroni, Chris Dao, Joy Saverino, Leila Porteous, Les Pockell, Penina Sacks, Rebecca Oliver, and all of the other people at Warner Books who helped to make Nice Girls Don't Get the Comer Office a national best seller: Your expertise in your respec' tive fields is evident in all that you do, and you're the best team a writer could ever ask for.
• Bob Silverstein for being not only a wonderful literary agent but such a good friend and sage adviser
• Dr. Pam Erhardt for continuing to be my muse and for her assistance with the data collection and analysis
• Dr. Kim Finger for being a terrific sounding board, editor, colleague, and friend
• Katherine Wimmer for so patiently, thoroughly, and cheerfully responding to my myriad questions and for providing outstanding suggestions based on her extensive experience as a financial consultant
• Joe Lumarda for his help writing the sections on charitable giving
• Karen Blanchard and Maureen Kerrigan for their on-the-mark suggestions as well as for taking the time to educate me
• Cheryl Bouchard for her insights on women and real estate
• Barbara Stanny for sharing her personal experiences and insights into women and money
• Elaine Gregory and the rest of the "lunch ladies" for taking time to share with me their expertise and experiences working with women and money
• Karen Flannery for so thoroughly and thoughtfully reviewing my manuscript and providing me with new ideas for getting rich
• Anne Fisher for her generosity of spirit and support of my writing
• Mia Anderson, Lieke Sulaiman, Ranti, and Itje Suryono for helping to get my questions distributed to women around the world
• Kathleen Booth for feeding me a perpetual stream of relevant information and ideas
• All of you who took the time to share your messages and mistakes via phone, e-mail, and personal interactions

If I've left anyone out—and at the risk of being called a "nice girl"—I apologize. No one's contribution was too small to mention.

Introduction

From birth to age eighteen a girl needs good parents. From eighteen to thirty'five she needs good looks. From thirty'five to fifty-five she needs a good personality. From fifty'five on she needs cash.

SOPHIE TUCKER

When my editor at Warner Books and I first started talking about writing a book that would illuminate the many mistakes women make on the road to financial independence and ways to correct them, I was hesitant. There were already so many books on the market designed to help women accumulate the level of wealth they wanted. When I mentioned the idea to one journalist at the Wall Street Journal, she groaned, "Not another book to teach women how to negotiate!" Then it dawned on me. If there are so many books available to help women achieve their financial goals, then why do significantly more women than men live below the poverty line? Why do women between the ages of forty-five and fifty-four earn 28 percent less than their male counterparts? Why aren't women getting their fair share of the world's wealth? And most important, why aren't women following the great advice contained in all these other books?

Because a woman's relationship with money is as complex as all the other relationships in her life. And this is what makes Nice Girls Don't Get Rich different. This is not just a book about financial planning. It's also a book about financial thinking. It's about how women, stuck in old patterns of socialized behaviors and thinking, get in their own way of accumulating the wealth needed to live their lives richly—in all ways. It's not because we earn only seventy-seven cents on the dollar as compared with men, and it's not because we don't sit in corner offices. Those are symptoms, not causes. Women don't earn as much because they are given conflicting messages throughout their lives—beginning when they are girls—about doing good and doing well. All of the financial planning books in the world won't help someone who is walking the tightrope between intellectually knowing she should be more concerned with financial security and emotionally feeling stretched about how to achieve it and still be effective in her socialized role as a nurturer, caretaker, protector, and helpmate. But a book that combines financial thinking with financial planning will—and that's why I decided to write this book.

The title of my last book, Nice Girls Don't Get the Corner Office: 101 Unconscious Mistakes Women Make That Sabotage Their Careers, raised a lot of eyebrows and caused much conjecture when it arrived on the best-seller lists. The most common media question I was asked, particularly by men and with a bit of sarcasm, was, "Are you saying you can't be nice and make it in business?" That's when I knew the person hadn't read the book. If he had, he would know that while it's true women can't afford to be nice to the point of being pushovers, the emphasis in that title, and this one, is less on the word nice and more on the word girls. For what gets women in trouble when it comes to getting and keeping the job they want or accumulating the portfolio they need to live financially independent lives is the tendency to act like the "nice girls" they were taught to be in childhood as opposed to acting like intelligent, capable, deserving adult women.

With the help of my colleague Dr. Pam Erhardt, I researched the early childhood messages women receive about money and the mistakes they make along the path to creating financial independence. I was surprised to find that our original hypothesis, that little girls receive significantly different messages about money than little boys, didn't prove true. In fact, the majority of the people we spoke to or corresponded with heard all the right messages:

• "Save for a rainy day."
• "Don't spend more than you have."
• "Create your own financial independence."
• "Methodically track and watch your money."
• "Plan now for your retirement."

On the other hand, they also heard a few messages that most little boys never hear:

• "It's just as easy to marry rich as it is to marry poor."
• "Men know more about money than you do."
• "Money doesn't buy you happiness."
• "Talking about money is crass."
• "It's better to do good than be rich."
• "Girls just aren't good at math."

Herein lies the rub. The past several decades have opened new windows of opportunity for women. Although the playing field is still not even, a woman can at least be on the field—if not the star quarterback. What hasn't changed, however, is what I write about in Nice Girls Don't Get the Comer Office. Women have been reluctantly invited to join the old-boys' club but told not to act like the other members if they want to maintain that membership. The perception is that role-appropriate behavior for women still involves being less assertive, direct, and competitive than their male counterparts. Even women (or especially women) who grow up in egalitarian households where they are told they can become anything they want to be and are just as good as the boy sitting next to them in class find that in the real world there is subtle pressure to conform to the cultural norms of female behavior.

After polling hundreds of women around the world and hearing stories such as the ones contained in this book, it became abundantly clear that many of the characteristics that make women uniquely feminine are the very same behaviors that prevent them from becoming financially independent. In many ways the greatest gifts women bring to society are, ironically, the ones that cause them to act in ways counter to their own best interests. Even if they don't hear it from their parents, young girls are still bombarded with societal messages that imply their well-being is contingent upon acting in certain stereotypical ways such as being polite, soft-spoken, compliant, relationship-oriented, and, in some cases, allowing their hard-earned incomes to be mismanaged so as not to offend someone's ego. When a woman earns her own income or inherits wealth, there is often a conflict with the expectation that she will ultimately be a mom, dutiful wife, caretaker for elderly parents, and independent. It's a juggling act that's difficult at best and impossible to achieve at worst. But don't let this discourage you. I also asked all kinds of experts for suggestions about how women can become financially empowered, and they responded with plenty of advice to help you lead a rich life. This advice, combined with my own based on my personal research, observations, experiences, and practices, makes Nice Girls Don't Get Rich a practical tool kit you can use to build your financial foundation.

When I read a book that gives me advice, I want to know the qualifications of the writer. I've already said I'm not a financial planner, but rather a business consultant, author, executive coach, and licensed psychotherapist. So in the spirit of what I suggest you do more of—talk about money—I'll model the way. I come from a family of modest means, and, perhaps like you, I was taught the importance of hard work but wasn't given the guidance I needed to leverage that into a wealthy lifestyle. Nonetheless, using the definition of rich contained later in this book and by applying many of the coaching tips imparted herein, I can legitimately (and with much humility) say that I am now rich. I have acquired the amount of money needed to make decisions and live my life free from financial concerns. My portfolio ranks among the top 5 percent of American women with savings. With the exception of a $25,000 pretax inheritance I received when my mother passed away, I earned it myself and, with the help of a capable financial consultant, manage it myself as well. I hope you know that I share this not to impress you, but to impart the message that if I can do it, so can you.

What this book will not do is provide you with a blueprint for financial planning—but it will help you to develop your own. My belief is that you must first understand why you act as you do before you can change your behavior. My goal is to increase your consciousness so that in turn you can take the hundreds of coaching tips provided and put them to immediate and good use. Just as you can't lose twenty pounds in a week, you can't become financially independent overnight. Use the self-assessment inventory in chapter 1 to determine the areas that are the greatest impediments to your financial success. Then focus on taking two or three tips from each of those sections and incorporate them into your daily life. Most important, make a commitment to yourself to take charge of your financial well-being. Once you do that, you'll be on your way to creating the abundance that you've worked hard for and deserve.

Chapter One

Women and Wealth

Women have been so brainwashed by the destructive female culture that taught them to associate money with sin, evil and everything crude, that it would take an entire book to disentangle the subconscious fears and incredible fantasies that the simple noun "money" evokes in most women.

BETTY LEHAN HARRAGAN,
Games Mother Never Taught You

Women and money. What a complex relationship. We bemoan the fact that we don't have enough of it. We don't save as much as we know we should. And we too often rely on others to manage it for us. Despite the fact that in childhood most of us get all the right messages about the importance of being financially independent, we do all the wrong things when it comes to accumulating the amount of wealth we need to be truly financially independent. Why? Because throughout our lives we're given multiple, often conflicting, messages. On the one hand, we're taught about the value of money and the need to spend and save it wisely. On the other, we're implicitly or explicitly taught that it's equally important to be kind, nurturing, and collaborative; that our real roles revolve less around money and more around relationships.

This double bind causes little girls to limit their interest in acquiring wealth and ultimately their capacity to acquire it. They don't aspire to get rich, they can't see themselves as rich, or they reduce their opportunities to get rich. As a result, they frequently lack the skills needed to create wealth. Getting rich requires you to do two things: financial planning and financial thinking. If you're like most women, you don't "think" rich—and if you don't think rich, you certainly don't consciously engage in behaviors that will contribute to getting rich. The point at which you call yourself rich is determined by your values, your lifestyle, and your risk tolerance. It's not determined by someone else's definition, needs, or expectations of you. Being rich is about having the ability to live your life abundantly—however you define abundance.

Although I realize that life can be rich in many different ways, for the purposes of this book when I use the term rich, I refer to the acquisition of financial wealth. Most of us already know that one can be rich in love, work, family, and so on. You don't need another book to tell you that. Defining rich in financial terms is another thing. The actual number, the point at which you consider yourself rich, is something only you can decide. Most of us will never be as wealthy as the people on Forbes magazine's annual list of the richest people in the world. Yet you may aspire to more than you currently have. Therefore, throughout this book when I use the term rich, I am referring to the ability to live your life as you want to free from financial constraints.

Speaking with women around the world about getting rich, I got the distinct feeling they were uncomfortable talking about money. It was as if rich was a dirty four-letter word. Whereas a woman may be called a "rich bitch," there are no similarly pejorative terms to describe a man. And Lord knows we avoid the b-word even more than we avoid talking about money! It doesn't seem to matter if you're twenty-five or fifty-five. As a woman you are less likely to focus on methods for becoming rich and more likely to focus on "doing good."

Having been raised as a typical "girl," I spent the first half of my adult life believing that doing good and doing well were mutually exclusive. Whereas my two brothers were encouraged to pursue college degrees that would lead to high-paying professions, I was encouraged to go into a helping field—preferably teaching so that I could be home with my hypothetical children during summer vacations. While I was working as a clerk in the radiology department of the local hospital during high school, my mother (the director of nursing at this same hospital) was introducing my younger brother to doctors at the hospital and encouraging him to become a physician. Although I worked my way through master's and doctoral degree programs, I only recently discovered that my mother offered to pay for my younger brother's graduate education if he would consider becoming a lawyer. Is it any wonder that both my brothers became independently wealthy at a far earlier age than I did? While they were thinking about making money, I was thinking about "doing good."

"Nice girls" don't get rich in large part because of the social messages they receive when they are growing up:

• Money is power, and most little girls are not taught to be powerful—they're taught to be "nice."
• Girls are socialized to be caretakers, nurturers, and accommodators in society—not necessarily breadwinners.
• As child bearers and caretakers women often work jobs dis-continuously and are penalized for it. Alternatively, they're put on something demeaningly referred to as "the mommy track."
• Women are more likely to spend their income on their children and the household, whereas men are more likely to be prudent about investing.
• Women are reluctant to ask for wages, perks, or raises reflective of the value they add to their organizations because they're not sure they "deserve" it.

Need I go on? It is abundantly clear that women don't get rich because (1) we don't envision ourselves getting rich, (2) we are more concerned with playing our social roles in a way that others consider appropriate, and (3) we don't develop the skills needed to make wise financial decisions. Does this mean we can't acquire wealth on our own? No! It means that what you focus on is what you get, and it's time to focus on getting rich. Just as in my previous book getting the "corner office" was simply a metaphor for achieving your professional goals, being rich is a metaphor for living the life you want to live free from concerns about money. It's not the amount of money you have that matters, it's the ability to act with independence that defines a rich life. And you will never have it if you don't start thinking and acting like a rich person.

Given these parameters, a woman who owns her own home free and clear, does work that she loves, and knows she has enough money to live comfortably for the rest of her life could be considered rich. She would be no less (or more) rich than a woman who lives in a home with a $500,000 mortgage, has $3 million in the bank, works so she can afford to travel, and wouldn't be worried if she were to be laid off tomorrow. What point would that be for you? Envision yourself living that lifestyle. If it's not where you are now, then this book was written for you.

WHY AREN'T YOU RICH?

I've been asking women around the world about why they don't have the amount of money they require to feel comfortable making the decisions needed to live their lives free from concerns about money. More specifically, I asked them to finish this sentence: "I would be rich today if I had… " I phrased it that way so they would share the behaviors they ignored early in their lives. Here are just a few of the responses I heard:

• "If I had taken risks and not procrastinated." A sixty-three-year-old executive from Paramount Pictures.
• "If I had a better understanding and appreciation for the value of creating a savings account from the start of my career thirty-six years ago." A fifty-year-old administrative assistant.
• "If I had not stepped aside, walked away, or ignored being taken financial advantage of. Not worried so much about being seen as too aggressive or unprofessional." A fifty-three-year-old professional services manager.
• "If I had been more assertive." A forty-eight-year-old artist.
• "If I had dared to take high-risk chances, which I didn't take because I had to juggle between raising a family and my career." A forty-three-year-old accountant.
• "If I had kept my life simple—not moved to a big house with a big overhead and a lot of maintenance." A forty-nine-year-old executive with Prudential Securities.
• "If I had not been afraid of the stock market and invested ten years ago." A fifty-five-year-old independent graphics consultant.
• "If I had utilized my potential to the fullest and been more proactive in planning my future and not depended on someone else to actualize my hopes and dreams." A sixty-year-old real estate agent.
• "If I had not listened so closely to the advice that my father told me when I was young that I would inherit all that I would ever eventually need." A sixty-year-old diversity consultant.
• "If I had someone who told me that I could aspire to being rich." A forty-three-year-old dental assistant.
• "If I had done things that I really love to do." A forty-three-year-old business consultant.

If you can relate to any one of these messages, you're not alone. The reasons why women aren't as rich as they'd like to be are as varied as the women themselves. Sometimes it's the messages they received in childhood about money. Other times it's because of social pressure related to "nice girls not worrying their pretty little heads about money." And nearly always it's because they don't engage in the behaviors that will ultimately lead to wealth. Before you can become rich—and you can become rich—you have to know what holds you back. Let's begin with a self-assessment inventory.

NICE GIRLS DON'T GET RICH
SELF-ASSESSMENT

Consider each of the following statements and answer True if it describes you or your behavior all or most of the time and False if it rarely or never describes you or your behavior.

____ 1. I have a concrete financial goal (an actual number) toward which I am working.

____ 2. In the past year I have attended at least one seminar or workshop related to financial planning or investing.

____ 3. I carry no credit card debt from month to month.

____ 4. I balance my checkbook each month.

____ 5. I have investments in my own name (whether you are married or partnered).