Successful Women and their financial plan.

successful women

In light of women’s day tomorrow and August generally being the month to celebrate the women in your life, I thought I would touch on a few points that the successful women clients that I work with have always addressed and emphasized as being critical to their financial plan.

  • Building and protecting their Legacy:

This covers a few aspects of the financial plan, but it centers around their heirs (typically the children or those children they claim responsibility for ), and ensuring that all the measures are put in place to ensure that they while the client is alive that sufficient provision is made for the current and future education and lifestyle needs of the heirs, and should they pass, that the same standard of education and lifestyle current and future can be maintained. It also addresses the aspect of guardianship should the client pass, typically the spouse will fill this role, but it’s important to ensure there is a responsible and caring person nominated to fill this role, should there be no spouse or should the spouse pass too, this is elected in the Will. The most important document to have in place when wanting to protect your legacy is the will. The Will addresses whom should receive your estate, how they should receive it and what your wishes are for your heirs. Most women cringe at the thought of their heirs or the nominated guardians receiving this estate as a large cash windfall, the thought of them squandering the funds haunts them. Luckily this can easily be overcome by nominating a testamentary trust to manage and oversee the administration of the assets for the benefit of the heirs until such time they can do it themselves. Key is to also ensure all beneficiary nominations are up to date, aligned with your Will and in place. This can be a massive saving on your estate, if you can nominate a beneficiary, make sure you do. If the estate is nominated or becomes the beneficiary by default, the executor then has to deal with it and that comes at a 4.025% fee. Legacy also refers to those philanthropic events you currently dedicate your time and efforts to outside of building your career are continued to be supported in your honor.

  • Building and protecting their net worth:

Women being the unselfish, thoughtful, caring beings that they are, tend to address the needs of themselves only after they are certain the needs of those around them have been successfully catered for, unlike their men counterparts who tend to want address their long term wealth creation first. Building their net worth generally comes in the form of getting a broad idea of what tools are available to achieve this. Initially the emphasis is on capital preservation, but that slowly changes to a healthy mix of long term growth assets as well. In Building long term wealth, we efficiently utilise their remuneration package to structure the different wealth building blocks, ie: surplus cash flow is used to build up the emergency fund, cash bonus is used to diversify into foreign markets, share scheme incentive is used to diversify into local equity markets. Importantly though, all of the above building blocks are determined by an asset allocation which is achieved through the Lifestyle Wealth Design Plan we build. Once the plan is in place, it becomes really easy, efficient and the effects of compounding start to kick in. When putting all of these in place, it’s always wise to do so in such a way that we can protect what we have built up and we do that through the use of the different tax and cost efficient platforms.

  • Building and growing their career:

This point takes on a very different meaning when comparing to that of men. For men it usually means constantly wanting more, more authority, more respect, more money, more power. For women, it typically means enough, enough responsibility for the role I’m in, enough authority to enable the outcomes I need, enough money for the work that I do and to achieve the above two points. The enough mentality is powerful stuff, it enables a sense of fulfillment, knowing what there is enough means being satisfied, not to be confused with being content, the enough number still gets more, but there is an understanding of what is actually enough. So when we address the growth and trajectory of their careers, we do so with the enough number in mind and not the more number. If they aren’t getting enough for the amount of time and effort they afford their role, then we see how we can change this and typically it’s done through raising the question with the employer. If its not well received, then they tend to look for an employer who can satisfy their enough number. It’s a funny thing but once the enough number is reached that too tends to snowball and compound, which then feeds into the above points.

Having the above in place,provides peace of mind and ensures that the important things are taken care of, everything else from there on out really just solidifies the above three points, excess funds are used to build long term wealth, which leads to building inter generational wealth, we all want the best for our children, and if we can put them in the best possible situation to achieve this, then why not. I salute the successful women with the enough mentality. Have a lovely women’s day.

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