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Women investors leading the way: Ingrid Macintosh
Ingrid Macintosh, Vice President Wealth, TD Asset Management, says women are out-learning their male peers, so why aren't they out-investing them?
Ingrid Macintosh's career in the investment business has given her a unique vantage point to observe the differences between men and women in their approach to building wealth, and what she has seen is startling: Despite representing close to 50% of the workforce, data suggests women are retiring less wealthy than men. Which got Macintosh asking, what needs to change?
The Toronto-based senior executive and mother of four believes a lack of financial literacy has a big impact on a woman's ability to feel truly confident about her financial decisions. She spoke with Susan Prince, editor of MoneyTalk DIY, about why financial literacy is so important — and the hurdles women can overcome to be better prepared financially. The conversation began with a look at some myths that hold women back.
“People spend more time planning a holiday than they'll spend on their financial plan or putting money away.” – Ingrid Macintosh
Q: You've said there are three money myths that hold women back: not enough time, not enough knowledge, and not enough money to start building wealth. Why are these myths so persistent?
Ingrid Macintosh: In the first instance, the concept of not enough time, when you think about your career journey as a woman, is very often concurrent to the early years of your career, where you start to have potentially some disposable income that could be used for investing.
There's a lot else going on in women's lives. Maybe they've entered a relationship, maybe they're married, maybe they're starting their family at this point. So that myth of time is “I don't have enough time to spend on this.” People spend more time planning a holiday than they'll spend on their financial plan or putting money away. But if you're distracted from starting that journey early on, it isn't just something you simply defer for a year. You've foregone the growth of that money and the compounding it can achieve over time.
Q: How do you think dispelling these myths can improve financial literacy?
Ingrid Macintosh: When I think about financial literacy, I think of literally building that muscle with women. It helps to understand that a financial decision is not just a saving and investing choice, but also a spending choice.
Here's an example: If I buy boots for $300, I'm going to feel fabulous on Saturday, and then they're going into my closet and I may regret buying them. If instead I saved that $300, 20 years from now, that might be $1,000 in my investment account. That's what I mean by financial literacy — helping people understand that small financial decisions can make a huge difference over time.
Part of financial literacy is about creating a numeracy, right? It's about understanding the impact and consequences of financial decisions, both active and passive. What is the impact of investing even a small amount and having it compound month-over-month, time-over-time? But also, what is the impact of not saving every month?
Q: And do you believe there's a knowledge gap?
Ingrid Macintosh: The myth of not enough knowledge can be devastating in a couple of ways. For an individual woman, they may not think they know enough. You know, we don't like to rock the boat. We don't like to ask a lot of questions. We don't like to demonstrate where we don't know things.
That lack of confidence can lead to a lack of action. Back to square one, not benefiting from the time and compounding value of money.
The third myth is: not enough wealth to get started. Many women may think they don't have enough money to move the needle and make a difference. Any time that we can help people understand that small acts really compound to much larger success over time, particularly the importance of simply getting started, that's incredibly powerful.
Q: What do you think are the three things every new investor should embrace?
Ingrid Macintosh: I think they should understand account types, like the power of a Registered Retirement Savings Plan (RRSP) and Tax-Free Savings Account (TSFAs) and how they fit into an investor's personal financial situation to help maximize the growth of their money.
I think they should understand the concept of time horizon and risk. Understand that short-term risk and long-term risk are very different things.
And thirdly, I'd say they should understand the value of time and compounding. The sooner you start — no matter how much you have — you may have a higher potential for reaching your financial goals.
These are all accelerators. Compounding is an accelerator. RRSPs and TSFAs are accelerators. And understanding your risk tolerance and making sure you are comfortable taking the appropriate risk can be an accelerator to the growth of your portfolio.
Q: You have a great phrase "Women are out-learning, up-earning and outliving men." How does this statement guide you?
Ingrid Macintosh: That statement may be a scary thought, but I hope that it helps to create the mindset to empower women and drives them to lead the path for their own success. When I'm pounding my fist on the table on the importance of banks like TD putting a focus on women, the tone of the narrative is that women are now completing higher levels of education than men. Thirty years ago, 15% of us had a degree. Now 56% of undergraduate degrees are obtained by women. Women should feel empowered by that. It means our earning curve is coming up. We're not there yet, but longer-term, higher earners will likely be women.
And we're up-earning. Women don't yet have wage parity, but we're getting there. And women are outliving men. This means that, whether or not a woman is currently in a financially shared relationship with a man, the landscape of the wealth portfolio, where the money lives, will likely one day be in the hands of women.
Q: And you say women need to be ready to take the financial reins.
Ingrid Macintosh: Yes. If you haven't taken control today, at some point you are going to be the financial decision maker in your relationship. By 2030, it is expected that the share of Canadian financial wealth controlled by women will increase from 39% at the end of 2020 to 47%. So even if you haven't had to before, figure it out. You're going to be accountable. Build your confidence now because if you don't have it, you're not going to be in a good position.
That's my rallying cry to women.
Q: You are very involved in TD's Women and Wealth Program. What are some of your goals for the initiative?
Ingrid Macintosh: Our focus is on the impact of financial literacy for women. Supporting women to help overcome self-imposed biases they may have about not being “good at money.” When you think about life events, we'd all love to believe that, if marriage is our path, we'll get married and we'll make decisions based on an assumption of eternity. And that doesn't always happen, either through divorce or widowhood. So, I really want women to have their own voice, no matter how healthy their relationships are.
At TD, we think the tools to create wealth should be accessible and available. On the TD Wealth for Women website, we make a variety of tools and resources available in one place, along with the options women want to consider in building an investing plan.
If you're looking to start investing on your own, TD Direct Investing has resources to help you build confidence and manage your investments. Visit our New to Investing Resource hub to learn how you can invest for yourself, not by yourself. You can learn more about our extensive educational resources here, or access market data, content and reports here.
This interview has been edited for length and clarity.
