A woman's place is in the financial markets

Statistics show that 90 percent of American women will be solely responsible for their financial wellbeing at some point in their lives. It's comforting then, that statistics also indicate women are becoming financially savvy.

Nearly 40 percent of wealthy Americans -- those with more than $500,000 in assets -- are women. Women wield $1 trillion in buying power, according to the U.S. Department of Commerce.

Women own one-fourth of all U.S. companies. Women's investment clubs have outperformed men's since inception, according to a Wall Street Journal article.

Women need to consider statistics about their financial future.

* Many women have to compensate for lower salaries than their male counterparts and interruptions in their careers to care for children.

* Women tend to live longer, typically spending more years in retirement than men.

* About 90 percent of American women will be solely responsible for their financial well being at some point in their lives. That's why investing now with a goal of achieving financial independence is important.

Here are six actions to work for financial freedom.

* Define your financial goals. Determine both short- and long- term goals. Short-term goals would include a car purchase, a vacation or even day-to-day living expenses. Long-term goals would include money for a new home, a retirement lifestyle of your choice or college tuition for children or grandchildren.

When considering long-term goals, think about how your future will be affected by such factors as the rising cost of living and medical care, a longer life expectancy and the amount of time you will spend in the work force.

* Determine what you have.

Identify and review your current available assets. For example, if you turned your assets into cash and paid off all your debt, would you have money left over -- positive net worth -- or owe more than you own -- negative net worth?

Remember to factor in cash flow. Determine how much comes in, how much gets paid out and what's left for you.

* Create a budget and stick to it.

Track what you spend each month and pinpoint where you can save and redirect that money to help meet your goals. For instance, if you use credit cards, figure out where you can tighten your budget so you can pay off more of your balance faster.

* Build a cash reserve.

Save enough to cover at least three months worth of expenses -- six months if possible.

Consider putting 10 percent each pay period in a secure, liquid account that pays competitive rates. This cash reserve can keep you afloat in the face of unexpected repairs, emergency purchases or a loss of job. The goal is to avoid having to tap your savings, sell your investments or go into debt to meet your expenses.

* Invest for major goals.

Start by considering how long you have to invest for each goal. Determine your level of risk tolerance. That is, you have to decide how much investment risk you are prepared to take to achieve those major goals. Also, consider what you need most from your investments - - capital, appreciation, income or stability.

When considered together, these factors will point you to the investments that may be suited to your needs, such as stocks, bonds, money market funds, other mutual funds or annuities.

Keep taxes in mind when you invest. Depending on your tax bracket, a lower-yielding tax-free investment may make more financial sense than a higher-yielding taxable one because you can keep more of what you earn.

* Purchase life insurance.

Life insurance offers a safety net that can protect you and your hard-earned assets from the financial impact of accident, illness or death. Your job may provide workers compensation and unemployment insurance. It may also offer health, disability and life insurance. If it doesn't, you can purchase these elsewhere. If you become sick or injured and unable to work, disability insurance can help replace lost income.

Though these actions apply to everyone, they're especially important for women.

A Bank of America study of 1,600 women in California and Arizona in 1997 -- the year Bank of America established its Women's Financial Initiative program -- reinforced the idea that women want more investment information pertaining to their special circumstances.

While 70 percent of the women surveyed said they handle all of their own finances, and 75 percent cited retirement planning as the most important financial issue they face, 91 percent said they had little to moderate investment experience. With women already wielding $1 trillion in buying clout, it seems inevitable that their experience will increase.

Ronald J. Burke Jr. is a investment consultant, at Banc of America Investment Services in Oklahoma City.

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