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Do Women Invest Differently Than Men?

It’s a popular pastime to identify the differences between men and women. There are many generalities – some could even be accurate, and some just misconceptions. So, when it comes to money and investing, are women really that different from men?  Actually, the research shows that women and men do differ in a variety of ways when it comes to financial decision-making and investing.

For example, reports that “Men are more self-directed learners, using the Internet more than women. Women rely more on personal networks with friends, family (and) financial planners, and (they) take a networking approach to gathering information.” And reports, “Multiple studies have shown that female investors tend to be more risk-averse than their male counterparts. Because of this, women consistently do more research than men before making an initial buy, trade less frequently, and hold longer.”

We have seen through the years that women may benefit greatly from having a safe place to talk about their Money Mind® and their financial concerns. Many times a woman cares about family or giving back, and an adviser who wants to talk only about “a retirement number” isn’t really listening to her needs.

In other cases, a woman may be asked to set her goals and objectives for the long term, but without a guide to talk about what matters – really matters – this can be hard to do. Many women have not been taught that there are many different emotions and responses around money, and that all of them are legitimate and need to be considered when making financial decisions.

This isn’t because women need to be coddled and made to feel good. It’s because no one can make a solid financial decision for the short-term, or for their future, without knowing how they feel and what matters to them about their money. Money is a means to an end. Defining the “end”– and the beginning, and the middle –is so important.

Because the financial industry can be complex and unpredictable, we believe that helping individuals feel good about taking action is key. Women often want to connect – with others and with information. Understanding the connections, and the implications, of the decisions you make can offer better overall results toward life goals – and the confidence to go with it.

Here’s an interesting twist on the differences between men and women –The Wall Street Journal reported, in 2009, “Finance professors Brad Barber and Terrance Odean have found that women’s risk-adjusted returns beat those of men by an average of about one percentage point annually. In short, women trade less frequently, hold less volatile portfolios and expect lower returns than men do.”

Women might inherently be better investors, even though the perception is that they don’t understand financial complexities as well as men. We like to think that we can put this natural proclivity to making good decisions together with insight and awareness that many investors never have.

Information, insight and awareness – we believe those combine to give women investors the power to own their financial decisions.

United Capital

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Hidden Costs that Could Sabotage Your Long-Term Financial Picture

Many retirees are now looking back at their dwindled nest eggs wondering what happened.  They may have thought that they had enough to live out their retirement the way they imagined, but as life unfolded, they realize that retirement is much more costly than they anticipated. 

Here are some of the hidden costs that could potentially sabotage your long-term financial picture.

Unexpected life events.  Nine out of ten people surveyed reported at least one setback that had a negative impact on their retirement savings.  Setbacks vary from suddenly having to care for an adult child; college expenses that last six years instead of four; loss of a job; assisted living expenses; to disappointing stock performance.  Survey respondent’s indicated that unexpected life events cost their retirement accounts on average $117,000. [1]

Wear and tear.  When projecting future costs, many people overlook the fact that the contents of their home will need repair or replacement at some point.  Appliances, rugs, furnaces and roofs – they all have costs associated with their upkeep. In the same survey mentioned above, home repairs (17%) and out-of-pocket bills (11%) were both cited as reasons their long-term savings were not what they expected.

Health care expenses. Health care costs are rising at an alarming rate.  According to the Employee Benefit Research Institute, retirees will need approximately $635,000 (per couple over age 65) to cover healthcare costs in retirement.  This amount gives retired couples a 90% chance of having enough money to pay health expenses beyond what Medicare covers.

Upgrades. New technology comes out at a dizzying rate, and the cost to our pocketbooks is enormous. Our parents probably bought a new phone twice in twenty years.  Now, it’s not uncommon to upgrade to a new mobile device every year or two just to keep up with the latest innovations.  In addition to a shrinking technology upgrade cycle, products that will be invented in the future designed to solve needs we don’t even know we have, will cost us dearly.

Inflation.  Historically low levels have made inflation somewhat of a silent killer to many retirement accounts.  Even at low rates, inflation can have a devastating impact on wealth over time, particularly when not offset by investment gains.

Taxes. Many people forget to factor in all forms of taxes when projecting future expenses.  They may include federal income taxes, but overlook state income tax, local income tax, property tax, sales tax and Medicare tax. 

Impulse for improvement.  No matter how good we have it, it is natural to want more.  We quickly forget our needs once they are met and move on to the discovery of a need not yet met.  This urge doesn’t retire once we stop working.

Hidden Costs

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Successfully Managing Your Student Loans

In your twenties, there is a high likelihood you will spend time filling out applications for student loans. Most of us realize the value in a college degree, but we also recognize the enormous financial commitment required to obtain a collegiate diploma. And it can get even worse if you decide to enter into a graduate degree program. You want to become a doctor or a lawyer, you say? The financial commitment could be simply remarkable. Borrowing money in any capacity can truly feel extremely stressful and scary-especially if you are not familiar with the rules of the game.  

I can remember the conversation like it occurred yesterday. Years ago, my father kindly informed me he would pay for 100% of the costs associated with an education at a state school or I could attend a private school of my own choosing and take out loans for the difference.  Like most college-bound students, I was 18, and had no clue what I should do. After a long conversation with my father, I quickly determined taking out debt could be a horrendous and unnecessary decision.  So off to the State University of New York I went. I was one of the lucky ones. 

But now, more than ever, a large amount of young adults recognize the value in a higher education, and face the harsh realization it will be on their own dime. They don’t have the money now, so they have no choice but to borrow it and pay it back later. The difficult learning experience I avoided with student loans was quickly evident by watching everyone else. Many of my friends and loved ones have fought a difficult battle with paying back their loans.  

The day those checks arrived to my lending friends and loved ones seemed to be better than Christmas. The bars and restaurants were packed. I even remember guys going out and buying new wardrobes. I was secretly jealous.  Where was my windfall of free money?  Why didn’t I apply for these pennies from heaven? Well the truth is that all good things usually come to an end and their debts eventually had to be satisfied. If they only knew then what they know now. Irresponsible spending and creating large debt early in life can be a financial death sentence. To help avoid this happening in your future, I will discuss the different options available and how to minimize the risk of borrowing thousands and thousands of dollars.    

Choosing the Right Loan for You

There are numerous types of loans available to college-bound students. But, the first step is applying to schools you are willing to pay for. Consider the amount of money you are willing to borrow and research the tuition of each school to which you are applying. Ensure they are within your financial budget and you are comfortable with the overall price tag. 

Additionally, consider other potential expenses like the cost of living, food, books, and other incidentals like travel and the need for a vehicle. Depending on the location of the school, there may be astronomical requirements you should consider. Take the time to sit down and create a spreadsheet outlining all of your potential costs for each semester. That will allow you an opportunity to truly understand how much this may cost in the long run. 

Next, familiarize yourself with the different loan options available. To offer a global perspective of the most popular choices, consider the following:

Stafford Loans. Stafford Loans are the most common type of loans. They are federal education loans. Based on income, they can be either subsidized or unsubsidized. A subsidized loan is one where the government pays the interest while the student is in college. Once the student graduates, the balance of their loan is only principle and carries no required interest to be satisfied. Unsubsidized loans accrue interest while the student is in college and the student must repay interest and principal.

Perkins Loans.  Perkins Loans are very low interest (currently at 5%*) federal loans and are based on income. Only those students who show exceptional financial need can qualify and apply for these types of loans. 

PLUS Loans. PLUS Loans are loans that can cover the “other expenses” that aren’t covered by Stafford or Perkins loans such as books and supplies. The benefit to these loans is that it offers you the opportunity to subsidize other fixed costs you will experience during your educational journey.

Institutional Loans. Institutional loans are loans that are given to students by the institutions they attend. They are not affiliated with the government and are much less common than federal loans. 

Private Loans Private loans are loans that are not funded by the government, but generally made by a bank or other lending institution. They have a variety of different terms, interest rates, etc. They are not fixed and can often be negotiated with the lending institution. Students who do not meet the financial need criteria for federal loans, but still need to borrow money for their educational journey, typically obtain these loans.

There are both advantages and disadvantages to each of these loan options. Some call for specific qualification requirements while others carry specific terms that may or may not fit you and your financial lifestyle. It is a top priority to ensure you are fully informed and research each option before you make a decision on which loan is right for you.

What’s the Debt?

When applying for college, students should first try to obtain any “free” money that they can get. Since most loan programs are capped at a certain amount per year and in total, additional options like scholarships, work study programs, and federal grants should always be at the top of the list before applying for any type of loan. For example, students obtaining subsidized Stafford Loans are capped at $3,500 in year 1, $4,500 in year 2 and $5,500 in years 3+ with a maximum of $23,000 borrowed over the course of the loan. Thus, there may be a gap between what you borrow and what you need. There are numerous programs and websites that offer very detailed and thorough information regarding the available loan options and many even allow you to enter your information and your needs and will suggest the right loan option for you. 

For any federal loans, students apply via their college application. Students can apply for the maximum amount, compare the loan terms and then accept only what they need. Many students choose to accept the maximum amount they can get and live off of the funds that they don’t need for tuition. However, in many cases, interest is accruing on these funds so it may be a very nearsighted approach to managing your money.

The point is that you have to understand the overall exposure to you and your finances. Everything may seem up and up in the beginning, but understand that these loans will eventually mature and you will be on the hook for every dollar you borrowed. Before applying for any loan, the most important step to take is to research and understand your exposure, including principal and interest so you can budget accordingly.   

Too Late…What Now?

Many students reading this have already applied for and received student loans. But rest assured there are steps you can take under your current loan structure to help minimize the financial strain they may cause later in life. As previously noted, students don’t have to accept all of the funds. Meeting with the financial aid department of your respective college will enable you to decline a portion of the financial aid if you choose to do so. Unfortunately, the amount of financial aid offered by the federal government is allocated among students pretty quickly and if students wait too long, the only option for obtaining additional financial assistance is through private loans (which will likely require a co-signer as many college students don’t have credit at such a young age).

Furthermore, remember that there is always a continuing opportunity to apply for scholarships and grants. Hundreds of thousands of dollars in scholarships are lost each year because students simply don’t apply. There are many different types of scholarships available. The first place to start is your respective college’s student handbook publication. These handbooks will generally list all scholarships available at the university. In fact, many alumni create scholarships in honor or memory of someone. Some scholarships are available to all students while others are focused on a particular degree of study. Also, community organizations and companies offer scholarships and while these aren’t as common, a little research could go a long way. 

The point is that your loans are a living and breathing organism. There is always an opportunity to restructure or lessen the blow by subsidizing your costs through grants and scholarships. A little paperwork could be a difference of thousands of dollars in forgiven debt.

Always consider the occasion to repay your loans. If you are currently in the middle of your college career and are already receiving loans for your education, start paying them back now. A summer or weekend job could create enough financial opportunity to pay down your loans or even borrow a lower amount. Remember, the less you borrow, the less you will owe. The less you owe the less interest you’ll have to pay once you conclude your education. A hundred dollars here and a hundred dollars there over the course of your lengthy education could make a substantial difference in the pinch your loans may create once they mature. 


We all think about graduation day as one of the happiest times of our lives. But it is also the first day of the rest of your life. Soon, you will be on your own, ineligible for further loans, and positioned to get a job and begin the process of paying back your loan.  Loans backed by the federal government generally carry a six-month deferment period after a student graduates. This gives students a little time to find a job and get on their feet before requiring them to begin repayment. During this time, students should work to consolidate their loans. Not only will it make life simpler, but student loan repayments are often based on the new graduate’s income. 

For example, if a student graduates and owes $20,000 at a 6.8% interest rate (the current Stafford Loan rate*) and the standard 10-year amortization, the payment would be about $230 per month. If the student is only earning $30,000 annually, then the student loan payment as a percentage of income is almost 10%. Most of the time, programs will work with the graduates to reduce the payment in the short term and increase it when earning increase.  Additionally, you can defer payment if you continue for an advanced degree.

Thus, the first step for any new graduate is consolidation. Once the loans are consolidated and the graduate has worked with the lender to get a reasonable payment relative to their income, then we use the same repayment principles that we always use (high interest debt is knocked out first and then lower interest debt is paid, in most cases). The good news is that most interest on your student loans is tax deductible and can be written off.  But you still have to budget. Hypothetically, someone could be locked in at extremely high rates while the current loan rate is half of what they are paying. It is difficult for them to watch loan rates decrease and their high interest rate remains the same. Someone could have major trouble paying back their loans at a high rate and it might follow them for years to come. So much so that they could be denied a major investment such as a mortgage because of missed payments and their debt to income ratio. 

The point is that a bad decision in your twenties (or even earlier) can follow you for the better part of your adult years. It is easy to fall into the attitude that you can deal with this later in life, but eventually later will become now.  And then you are stuck. Making informed and financially intelligent decisions early in the process can ensure you are positioned to handle the debt once it comes due. 

The Three Do’s… 

With an overview of the student loan process in mind, consider the three big do’s of managing your student loans…

DO… APPLY FOR FREE MONEY. Too much scholarship money goes untouched every year. Fill out the applications, write the essays and then submit them. The benefit financially over the longer term is tremendous.

DO…GET A PART-TIME JOB. This will not only help you reduce the amount of financial assistance you will need, but it will also show potential future employers that you’ve been in the work force and you can juggle many financial responsibilities. It may be the difference between getting a job or even a different loan for a car or a house.

DO…CONSIDER JOB OFFERS THAT FORGIVE OR REPAY STUDENT LOANS. There are numerous government positions that offer loan forgiveness or are willing to help repay a portion of your outstanding loans. The same is true in the medical industry. Salary should be just one consideration when accepting a job. Consider the total amount of money saved and earned with any potential job offer.

The Three Don’ts…

Sometimes what you don’t do is just as important as what you do. Consider these important landmines you should work to avoid during and after college relating to your student loans…

DO NOT…FAIL YOUR CLASSES. If you do, you’ll be stuck with no degree, student loan balances and no way to go back to college as you will not be eligible to receive financial assistance if your grades don’t reflect serious effort.  This can be one of the worst positions you find yourself in.  You will have nothing to show for your efforts but a debt to repay. 

DO NOT…ACCEPT ALL FINANCIAL ASSISTANCE IF YOU DON’T NEED IT. Doing so will cause your repayment amounts to be higher and cause you to pay back more interest than necessary. If you do not need the money, don’t apply for it. Only apply and accept what you know you have to have. Ever heard the statement, “starving college student?” Don’t starve yourself, but don’t feast either.

DO NOT…APPLY TO ANY SCHOOL WITHOUT UNDERSTANDING THE REAL COST. Not all colleges are created equal. Some are more expensive, cost more to live in, and require more of you financially. It can be beneficial to understand the whole package. Then, consider if it is worth it to you. You should never go into the process blind and feel caught off guard when that first bill comes in the mail. Remember to educate yourself and make the best decision for you and your life.

Student Loan debt never goes away–not even in Bankruptcy. If you borrow the money, you will have to eventually repay it in one fashion or another. Don’t want to repay it?  Well, that could cost you good credit and the ability to ever take a loan out again. So, take the time to consider all of your options as well as the potential earning capacity you may have after college. Then, you can truly assess the right type of loan for you. Next, assess how much you truly will need and try not to apply for a loan over that amount. The temptation of having the money may help justify the spending of it. Making intelligent and calculated decisions before you apply for your loan can minimize the impact these loans can have on you as you enter the real world. 


Cary Carbonaro, MBA, CFP®, Managing Director, United Capital of New York and New Jersey

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    United Capital Financial Advisers, LLC (United Capital) provides advice and makes recommendations based on the specific needs and circumstances of each client. For clients with managed accounts, United Capital has discretionary authority over investment decisions. Investing involves risk and clients should carefully consider their own investment objectives and never rely on any single chart, graph or marketing piece to make decisions. The information contained in this blog is intended for information only, is not a recommendation, and should not be considered investment advice. Please contact your financial adviser with questions about your specific needs and circumstances. This blog is a sponsored blog created or supported by United Capital and its employees, organization or group of organizations. This blog does not accept any form of advertising, sponsorship, or paid insertions. Certain authors of our blog posts may be influenced by their background, occupation, religion, political affiliation or experience. It is important to note that the views and opinions expressed on this blog are that of the owner, and not necessarily United Capital Financial Advisers. As a Registered Investment Adviser, United Capital does not allow any testimonials on their blog, and any comments deemed as such United Capital will remove.

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