CommentaryMarch 2018 Newsletter

Do You Have Bag Lady Syndrome?

Here’s an exciting statistic that came from The Richer Sex, a book by Liza Mundy: research is showing that for the first time in recorded human history, women under the age of 30 who have equal education and experience as their male counter parts and who have not yet had a child are making more than their male counterparts. And this is happening all over the world and at all economic levels. How’s that for a potential culture shift that could change the structure of families, work, and communities? We think it’s fascinating. It’s especially so, because women of all ages seem to have what we call “Bag Lady Syndrome”. No matter how much they earn, no matter how much they save, no matter how smart they have been with their money, they fear being poor and living on the streets someday. We have also seen, in our experience, that the wealthier women become (especially if they have earned the bulk of the money themselves) the more this comes into play. What is going on?

Well, first, a little confession, we all have it here, too. We can completely relate to feeling this way, and are usually able to laugh about it with our clients. We think it comes from a few places. First, any woman from Generation X or before was raised in a culture that was openly telling us that men made more, that they were smarter with money, and that we would make less and have more responsibilities at the same time. We’d argue the Millennials have had this as well, it’s just been a little more subtle (not much). Further, while women can now grow up to be anything they want to be in theory, without the leadership at the top being 50/50, it’s still a challenge. Responsibilities at home still haven’t shifted to 50/50 either. Until they are, women can’t put in the time to their careers men can, and that makes an emotional difference as well as a financial one. Women are still not guaranteed equal pay for equal work, and that weighs us down as well.

Those are some of the external factors that come into play, but internal ones create these fears as much as the external ones. Bag Lady Syndrome also tends to come from women who have an inner drive to never fail. Maybe they feel like the world depends on them. They are often the bread winners in their family and feel like the burden falls squarely on them, and they are not normal. Maybe they have never felt like they are in control of their finances because of perceived complexity or because the relationship with money is emotionally complex. They may have a past that may or may not have been filled with the support they needed or maybe they have a past where there was no expectation for them to do anything- both can trigger feelings that the wealth will be taken away because they don’t deserve it, won’t know how to handle it, or the “luck will run out.” Women who have had men as the caretakers of their money who suddenly find that the man is no longer there can also be subject to Bag Lady Syndrome.

How do you alleviate the worry? Well, the first thing you need to do with any worry is to find out if it’s based in fact. Quite frankly, we’ve met some women who should have had more Bag Lady Syndrome- but sometimes instead they had “Entitled Lady Syndrome” which is a topic for another day. If you are scared that you are not being a good steward with your money, looking at it objectively with someone who is paid to be honest with you, can help a lot. We have more than one client who laughingly says regularly, “I come to meetings just so you can tell me I’m not broke!” Get a true logical understanding of how your net worth relates to your income. And talk through every possible scary situation that you can think of (we’ll add some fun ones, too, if you want) and what you would do to get through it. You don’t pack up and leave the Midwest just because we have tornados- you make a plan and live your life, for the most part, without fear. The same needs to be true with regards to your money. Explore your relationship with money. Think about how you learned about it- what those early life lessons were. When we work with our clients we find out what that history is, and we document it. If we have a client who is panicked, we can remind them that it may be because they lost their house when their parent died, or had a parent that was a spendthrift, or who divorced a spouse who gambled. Those life experiences are key to understanding how you make decisions about money.

Finally, a word about men. Men have fears. They may not talk about them out loud the way women do, but they are there. If you are a man, or married to a man, be aware that Bag Lady Syndrome can exist for you as well. And when one of our male clients expresses it, it can be just as deeply ingrained in them, if not more so, than in women. How it got there may be a little different, but it still comes from a combination of external and internal experiences in your life. The conversations may be slightly different than they are with our female clients, but they can provide an equal if not greater amount of relief for a man who just feels like he won’t have enough to take care of those he loves.

The keys to curing Bag Lady Syndrome are acknowledging it out loud, discussing where it came from, seeing if there is any basis for it, and finally overcoming any factors that may contribute to it- whether financial or emotional. It never goes away entirely, but you can get control of it, so it doesn’t ruin your one and only life.


80% confess they have refrained from discussing their finances with those they are close to. (Hope + Money Blog Referring to Prudential’s 2014-2015 Financial Experience & Behaviors Among Women Study and Fidelity’s 2015 Investments Money FIT Women Study)


Business Risk is Real

By Stephanie Guerin, CFP®

What if we told you that you were going to own a part of a company. You have no control over that company, you have no control over the economic conditions that could affect the company, and you have no time to keep an eye on what is happening to that company. And, you had to give us your hard-earned money to buy part of that company. We bet your answer would range from, “depends on the company,” to “not on your life”. Buying an individual stock is the same as the above. If you are a small shareholder in a company, all of the above is generally true. And if you are a busy person who doesn’t have time to pour over company reports, not to mention going to meetings, it’s doubly so.

That doesn’t mean you can’t own companies or stocks, and we believe there is tremendous upside benefit to doing so. We do think in this day in age when information is so abundant and moving so fast that it’s wise to diversify to help reduce business risk. Business risk is the risk that stems from a business going down in value or out of business entirely. Diversification can help reduce this risk tremendously. This can be done by buying lots of different companies on your own, or using some sort of exchange traded fund, an index fund or a traditional mutual fund. All of these are ways can reduce the chance that any one business or company can affect your portfolio.

There are lots of risks in managing your money- but there are also lots of risks to living. The key to doing both well is knowing what those risks are and how to reduce them without giving up the ability to grow.


“You are going to let the fear of poverty govern your life and your reward will be that you will eat, but you will not live.” ~ George Bernard Shaw


Market Update: February Fun

2-28-18 YTD Dow: 1.7%
2-28-18 YTD S&P 500: 1.8%
2-28-18 YTD World EX US All Cap: -.1%
2-28-18 YTD US Agg Bond: -2.1%

Anyone see that truck that ran over the market for about a week in February? Good times there. However, as you can see, we had such crazy gains in January, that both the Dow and the S&P are still in positive territory at the end of February. You wouldn’t have guessed that based on media panic. As usual, you all remained calm. We appreciated the handful of clients who asked us mockingly where their “Don’t panic email” was in advance of us sending it. It just goes to show you we are consistent, folks. The bottom line is, we’ve got some dramatic economic forces at work right now and we could be in for some volatility. You can’t avoid it entirely and still expect to have any growth at all- that’s the nature of investing. However, you can mitigate some of it by keeping your cash flow in check and strong liquidity and flexibility in your planning. Otherwise, all you can do is sit back and enjoy the ride.
The Planned Approach, Inc.

420 W. 98th Street
Kansas City, MO 64114
(816) 941-0098

Our Disclosures/CRS FORM
The Planned Approach, Inc.

420 W. 98th Street
Kansas City, MO 64114
(816) 941-0098

Our Important Disclosures

Insights for Your Life Stage

The Planned Approach, Inc. is an Investment Advisor registered with the Securities and Exchange Commission. No client or prospective client should assume that any information presented or made available on or through this website, is a receipt of, or a substitute for personalized financial planning consulting advice. Financial planning consulting advice can only be rendered after the following conditions are met: 1. Delivery of our Form CRS, Form ADV Part 2A and 2B to you; 2. Execution of an Investment Advisory and/or Financial Planning Engagement Letter between us. You may obtain a copy of our ADV Part 2A Disclosure Brochure containing similar information by sending a written request to The Planned Approach, Inc., 420 W. 98th Street, Kansas City, MO 64114. Additionally, please note that hyperlinks included throughout this site are provided as a matter of convenience and we disclaim any and all responsibility for information, services or products found on websites linked hereto. Please contact the firm for further information. The Planned Approach, Inc. is not engaged in the practice of law and does not provide legal advice. Always consult with an attorney regarding your specific legal situation. The Planned Approach, Inc. is not engaged in the practice of tax consulting. Always consult with your tax advisor regarding your specific tax situation.