You've reached the Virginia Cooperative Extension Newsletter Archive. These files cover more than ten years of newsletters posted on our old website (through April/May 2009), and are provided for historical purposes only. As such, they may contain out-of-date references and broken links.

To see our latest newsletters and current information, visit our website at

Newsletter Archive index:

Virginia Cooperative Extension -
 Knowledge for the CommonWealth

Investment Tips for Women

Farm Business Management Update, February 2000

By David M. Kohl and Barbara J. Newton

In the agricultural arena, the trend is toward more shared decision making between spouses concerning financial and investment matters. A recent study conducted by the Department of Agricultural and Applied Economics at Virginia Tech found that in farm business, women were making or had major influence in 63 percent of loan decisions. Concerning investments, they influenced or were decision makers in 80 percent of transactions. Why the heightened interest and concern by women, particularly in the agricultural domain?

Just the Facts!

Many producers or small-scale business people are solely dependent upon the sale or lease of business assets as a means of financial support in retirement years. Losses on their income statement can quietly erode equity, which can play havoc on any couple's financial plans for retirement.

Women have a larger stake financially because, on average, they will live seven years longer than their husbands. Men, on the other hand, tend to marry three years younger. The result is that a surviving spouse has a decade to be a sole provider for financial support.

Additionally, documentation shows that women earn less money than men do, change jobs more frequently, and have more erratic earnings streams because of child or parental responsibilities. These differences, in turn, reduce social security benefits and possible retirement benefits with the business or employees. Many are employed part-time or seasonally resulting in lower probability that an employer has provided retirement benefit.


A woman who reaches 50 years of age has a one-in-three chance of living to be 105 years old. The averages for females indicate that once they reach 65 they can expect a life expectancy of another 18 years. This perspective suggests that a much more aggressive investment strategy is needed to assure financial independence in the retirement years.

A simple equation for investing for women is to take the number 120 and then subtract their age. For example, a 40-year-old with $2,000 to invest this year and a $50,000 total investment portfolio would allocate assets the following way. Eighty percent would be invested in stocks and mutual funds with moderate or aggressive growth expectations. (120 minus the age of 40 is equal to 80). Of that 80 percent, she would invest up to 25 percent in international fund or growth stocks, such as small companies. If one is more adverse to risk, a conservative mutual fund or blue chip stock might be more appropriate.

The remaining 20 percent would be allocated in investments having a lower probability in the loss of principal that is invested. These investments would include bonds, especially inflation linked bonds, annuities, and in some cases, certificates of deposit.

What About Land?

Seventy-one percent of all farm business assets are in land. While not providing high cash returns or dividends, land has historically resulted in high capital appreciation rates, which in total have trailed stock returns by approximately 1 percent.

Land is often a good investment, even for women. However, a higher degree of liquidity may be necessary particularly in economic downturns. Working capital or cash liquidity provides the resources to ride out the economic storm until the land can be sold at a premium.

If land is in part of the portfolio, the land owner needs to consider its development or recreational potential. For example, is the farm destined to be a hunter's refuge or housing for many more families? Based on the value of surrounding farms, where does the land fit in the long-term value scale? Finally, if they were poorly managed, buildings and improvements or past agricultural practices related to manure and fertilizer management can reduce the value in the perception of potential buyers.

Final Tips

The first step in investing for women is to always pay yourself first and then pay attention to diversify your portfolio. Ninety-seven percent of wealth creation is not through timing of the markets but diversification. Second, she needs to monitor annually her Social Security contributions and possible returns in her retirement years. She can do that by contacting the Social Security Administration. Third, if she is above 45 years of age, she needs to evaluate long-term care options. Forty percent of women will eventually need assistance sometime in their lives.

Finally, she needs to select an investment strategy and financial advisor with whom she is comfortable.

Contact the author at .

Visit Virginia Cooperative Extension