You are woman, you are poor

AMANDA MORRALL talks to financial adviser Joan Baker about why women ought to care more about money.

Pioneering feminist Gloria Steinman once said a woman without a man is like a fish without a bicycle: irrelevant in other words.

Survey the statistics on women, money and men and a different metaphorical picture emerges: one where schools of fish are more likely to be spotted riding around on bicycles - with training wheels.

Far from having been made redundant, men are the closest many women have to a financial plan.

For those women banking on a marriage to see them through, financial adviser Joan Baker, author of Why a man is not a financial plan, and Smart Women delivers her killer question.

"Whatever your age or stage you should ask yourself: what would be mine or what would be my circumstance if he died, or left or whatever?"

However unsettling, she says, this mental exercise is critically important. The calculations, stripped of alimony fantasies and factoring in pay expectations and childcare costs, if relevant, can be revealing. By some estimates, a woman's standard of living drops an average of 73 per cent in the first year after divorce. The future doesn't get any brighter.

Of the elderly living in poverty, three out of four are said to be women and 80 per cent of them were not poor when they were partnered. Overall, nearly seven out of 10 women are projected to live in poverty some time in their lives.

Given the depressingly high divorce rate that forecasts a 50 per cent chance of marital success, there is reason to worry and even better reason to plan.

Lulled by a false sense of security in marriage or deluded by notions of a Prince Charming financial rescuer - Baker calls it the Cinderella syndrome - women too often take a head-in-the-sand approach to financial well-being.

"It is that whole expectation and conditioning thing. It still hasn't changed, which is that it is still largely his job to provide and her job to look pretty," she says.

"Obviously it isn't universally true but the bias is in that direction," says Baker. Those who would argue otherwise just need to look at the spending differences between men and women, she argues. "If you look generally at how women spend their wages or salary, a huge amount of that money goes into presenting well and looking good, whereas men's money will generally speaking be more likely go into what turns out to be good assets as opposed to handbags and shoes."

Financially impaired by their own doing, women are even more seriously handicapped at the workplace, she maintains. Figures from the Ministry of Women's Affairs in New Zealand show that one year after entering the employment market, men and women with bachelor's degrees or higher qualifications, are separated by an income gap of up to six per cent. Five years on, the earnings gap widens to an average of 20 per cent.

At the higher end, that financial gap becomes an abyss.

Flip through a copy of the New Zealand's rich list, and the female multi- millionaires are conspicuous only in their absence.

In last year's list, compiled by the National Business Review, fewer than 10 ladies had pole-vaulted the $50 million benchmark to warrant mention.

Baker believes discrimination and self-sabotage have played a role.

On one hand, women aren't regarded as "promote-able" and "committed" to the job because the potential of them becoming mothers. On the other, most women generally make terrible self-promoters.

Salary negotiations are a case in point, says Baker, drawing on past experience as an employer and human resource manager.

Men, she says, start negotiating their salary from the final job interview whereas "women basically go 'Oh my God, you've offered me the job, isn't that wonderful'. And then they say, 'Oh, by the way, are you going to pay me?"'

"Men are barely in the door before they're in your office saying, 'I want to talk about reviewing my salary' and women almost never ask for pay raises. Men know they have to do this for themselves whereas women are largely waiting to be asked, and recognised and appreciated and all the rest of it."

But even the most confident, financially assertive female will have a hard time competing for equal pay especially if they divert into motherhood. According to a United States report, women lose a third of their earning power if they take just three years out of the workforce to have babies.

It is a move more costly than many might imagine, argues Baker. That's because most women end up leaving the workforce to have babies just has they are hitting their stride, professionally.

"It is a big issue," says Baker.

"Let's say you have a baby in your late 20s or early 30s, usually that is at the point at which you finally become of any bloody use to a professional firm or business or anything else."

The scenario is not that much better for the mother that returns to the workforce early in hopes of keep career prospects alive.

"So you're either not there for those critical years or if you are there, you're coming in breathless at 7.55am and you're looking at your watch from 4.45pm on thinking 'If I don't get out of here soon, the kids are going to be left on the side of the road of the childcare centre'."

Regardless of productivity, ability or talent, working mums are perceived differently, she argues. The exception is the female who scales to the top of the professional ladder before opting to have children.

"If you are already very senior, then you're very valuable, then usually a firm will turn itself inside out and upside down to accommodate and keep you because you've got valuable clients who might leave with you." Delayed motherhood may be one solution to achieving greater financial independence, parity and security as a woman. But it is not an option that comes easy or with any guarantee of reproductive success.

And yet short of foregoing motherhood, it would appear to be the most prudent means of reconciling motherhood, career and making above average earnings.

Self-employment, by comparison, seems an attractive option. No boss to appease, no punching of clocks around the 9-to-5 regime, no frivolous meetings, and best of all no manic rushing to and from work, home and childcare centre.

Baker acknowledges the benefits of self- employment in terms of flexibility but from a purely financial perspective sees them as limited vehicles for growth - if real wealth creation is the goal.

That's because when women set up business they are typically established as lifestyle businesses - a flexible structure that allows for the juggling of work, clients, childcare and mothering.

That's not to say that women don't and can't grow their businesses into successful ventures, it is just that not many do, she adds.

The same obstacles that stymie women in the labour force, also work against those who are self employed, she argues. Seldom can success at a high level, be achieved without sacrifice somewhere along the line, which is true for both sexes.

"Unless you get incredibly lucky, running a business and making it successful is a huge commitment and I think you have to be up for that and understand the hours and time that will take.

"It is also an incredibly risky enterprise for someone with young children unless there is a lot of money in the background or a high- earning stable male in the background saying you can play around with this for a few years and it'll keep you busy and maybe it'll work but if it doesn't we won't be destitute."

With or without children, the financial prospects for women don't look anywhere near as bright as they do for men, at least from Baker's point of view.

Some might accuse her being pessimistic or anti-male, but Baker suggests she is chiefly a realist.

"I don't feel negative about this at all but the reality side of this issue is overlooked because it is not politically correct to mention it.

"We've bought into this idea that women can do anything. My take on it would be they can do anything but they can't do or have everything. You end up having to make choices and there's no way around that really."

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