Women and Investing: POWER

In my previous blog, Women and Investing: Seize Your Power, I challenged you with the most important task: START. Below I’ve mapped out exactly what you need to do to achieve your POWER!

A Center for Talent Innovation (CTI) research study found that both men and women view wealth as a way to provide them with financial security and independence. But after those goals are reached, women want their wealth to provide for society at large. The POWER steps below work for both men and women. The point is to employ a plan. A plan is your key to financial security, independence and more. Fifty-three percent of those women surveyed said they did not have a financial advisor. Of those who did have a financial advisor, 67% said they felt misunderstood. This translates into underleveraged assets which represents a lost opportunity for women to meet their hopes and dreams.1              

In my practice at Maxima Wealth Management, I guide all my clients through the steps below. I highly recommend you establish a relationship with a financial advisor who will walk you through these steps or steps similar as you realize your POWER. Recognize what’s important to you in a relationship (i.e. understanding, trusting, educational, 2-way communication), interview a few options and pick the advisor who speaks to you.   

Present Situation

In my opinion, the foundation of all financial plans is to clearly assess your current financial situation. This will include creating a balance sheet that shows your assets and liabilities, completing a budget as an honest picture of where your money comes from and where it goes and accomplishing a risk tolerance questionnaire. The first step of most important projects can seem overwhelming, but I promise you once you accomplish the above-mentioned tasks the remaining steps emPOWERing you to financial freedom are less complicated.

Objectives and Goals

Now, I didn’t say the next steps wouldn’t require some thought, but hopefully this step is fun and inspiring. Once you’ve clarified your current financial situation, the next task is to specifically identify what your goals and objectives are for your future. This includes exploring and understanding what your values, lifestyle and attitudes around money are. It’s also your opportunity to put on paper what your dreams are, what your hopes and fears are and what you want your legacy to be. This task is where you get to define your POWER. Embrace it.

Willpower, Discipline and Dedication

This next step can sometimes be the most difficult but you can recruit support. Once your personal plan has been developed, you will need to vow to be disciplined and dedicated to stay on track. Willpower is key and you must pledge to yourself to exercise it. If you are devoted to meet your goals and objectives, you will be successful and realize the POWER you have. 

As with any goal in life (i.e. weight loss or preparing to run ½ marathon), strength and support can be key to ensure you overcome any challenges along the way. This is when having an effective financial advisor can be your most intangible strength. As with any important and long-term relationship, I recommend you choose a financial advisor who understands you, who you trust, who communicates with you in your language, who will cheer you on to meet your goals and who will guide you through the difficult times. In my practice, I devote the first meeting with all prospective clients as a time of introduction and “getting to know” each other. It is very important to me for my clients to trust me and to be comfortable with my style. In turn, I want to be comfortable with my clients and their expectations. I commit to be their advisor and cheerleader and this doesn’t always stop at the door of investments.

Execute the Plan

The next step is to put your plan in play – execute it. This may require completing paperwork and establishing automatic investments or expediting a more aggressive payment plan for your liabilities, i.e. mortgage. Once this step is complete, you are on the road to the financial future you’ve envisioned.

Review Periodically

This final task is one that will be ongoing. Periodic review of your progress enhances the achievement of your goals/objectives. And, with so many things in life, your situation may change and new challenges or opportunities could emerge causing your plan to be revised accordingly. So, make sure you get with your financial advisor and review your plan periodically.

If you need a financial advisor or know someone who would benefit from one, please send them my contact information along with this blog.

1 Harnessing the Power of the Purse: Female Investors and Global Opportunities for Growth, Talentinnovation.org/_private/assets/PopHealthcare_ExecSumm-CTI

Women and Investing: Seize Your Power

I am sure you have thought of a million reasons to keep putting retirement planning on the backburner. But actually, there are 65 trillion reasons for you to seize your power and start planning for your retirement now. Read more about Women and Investing.        

Women and Wealth

Women create, control and influence over $25.4 trillion of wealth in the United States. This equates to 39% of the nation’s estimated $65 trillion investable assets and by 2030 it is estimated that women will control 66% of United States’ wealth.1 Women are an economic source of influence and power. We are not just impacting the growth of wealth, but making important decisions as to how it is allocated.

Considerations for Women

Statistically we know that women live longer than men. This raises unique risks women face during retirement compared to men. The top five are: health care and extended care expenses, outliving assets, losing a spouse’s retirement assets, inflation, and living on a fixed income with less spending power.

Another consideration is that men and women are retiring earlier as well as over 1/3 of women retire just because their spouse does.2 This forces them to dip into their retirement assets earlier and still require it to last a lifetime.

Women also tend to take breaks from their careers to attend to family situations – such as having children or becoming unpaid caregivers to older parents. This decreases contributions to retirement accounts, reduces household income and may even make re-entry into a career challenging.

When it comes to money and finances studies show that women, like men want security, independence, and freedom. But after that, they want more. A Center for Talent Innovation (CTI) research study found that 79 percent of women surveyed in the U.S. “want to invest in organizations that promote social well-being.”      This investment can be done in many different ways, but the result is the same: women want the use of their wealth to match up with their values.

Gain Confidence and Seize Your Power

So, what’s stopping you? Studies show that women in the U.S. are 44% less likely then U.S. men to think they are knowledgeable in finances.1 When actually we are the most financially literate women in the world. This lack of confidence is a big factor in how women invest and how much risk we assume. But this is something that can be addressed with education, guidance and experience.     

How to Start

1.Make a list of your planning goals and objectives – i.e. at what age do you (and your spouse) want to retire, do you want to travel, do you want to leave a legacy to your heirs or an organization

2. Get a good investment professional – Of course there is a lot of information available via the internet, but there can be a lot of value in having an advisor you trust. My recommendation is to interview a couple and choose someone who can support your financial goals and understand your individual situation.

The most important task for you now is to START and Seize Your Power.

1 Harnessing the Power of the Purse: Female Investors and Global Opportunities for Growth, Talentinnovation.org/_private/assets/PopHealthcare_ExecSumm-CTI&nbsp

2 Nationwide Healthcare Costs in Retirement Consumer Study. 2012