In honor of the 100th celebration of International Women’s Day, Winch Financial CEO Christina Winch, CFP®, a trailblazer in the financial planning field, offers seven key tips for women to take control of their finances. According to her, the biggest issues many women face are an unawareness of the resources available to them and a misinterpretation of safety. “All women should have at least a basic understanding of their money,” she said. “Many women who are married depend on their spouses to manage their money. They have a husband who takes care of them and that makes them feel safe. But, that’s not safe.” True safety requires understanding and that takes a little work, but the payoffs can be enormous both in monetary gain and confidence. Treat yourself to an education. Take a class, read financial literacy books, listen to podcasts. We know you’re busy, but the time you carve out for financial education will pay off in the long run. Meet with a trusted financial advisor, preferably one who will have a fiduciary relationship with you. This means your advisor will have a legal responsibility to act in your best interest. Don’t skip the meetings. They provide an invaluable opportunity for you to learn about what’s happening with your money. Ask questions. In her 37 years as an advisor, Christina has fielded all kinds of questions from clients and students. She assures everyone that the only stupid question is the one they were afraid to ask. To maximize your appointment time with your advisor, you might want to bring a list of questions to the appointment. Talk to your friends about money. It does not have to be a taboo subject. Start an investment club with your friends and combine a little socializing with some real-time education and, hopefully, portfolio growth. Who knows? You might be a natural. In any case it’s a good idea to have conversations with… | Read More »
Financial Advice for Women
The Fourth P.E.C.K. focuses on the Kids
Money is almost always a touchy topic when it comes to relationships, and it does not get easier to discuss when you get married. It is just good common sense to know about your intended’s money language, money comprehension and money fitness. This is the fourth and last installment of our P.E.C.K. pre-wedding money conversations! Our first installment spoke of the “P’s” – Practical. The second installment addressed the “E’s” – Emotional. The third covered “C’s” – Contractual. This installment is on the “K’s” – Kids All couples want their children to thrive, though this means different things to different people. Your idea of how to care for your children’s money needs, expectations and desires are so important to explore together. Let’s talk about the top nine kids and money questions to ask your intended before your baby’s first cry. 1 – How do you feel about gifts and toys? Some families have birthdays and holidays that are flowing with gifts – other families believe that too many gifts make all gifts seem unimportant. Some families feel too many toys are a distraction and others want more than enough. It’s a good idea to know where your spouse is coming from early, to help keep a unified front. It is simply practical to discuss this before your in-laws shock you with the opposite of what you expect. 2 – Do you want to send your kids to private school? Private schools can be a good family fit, though the cost can be prohibitive. If you feel it is very important that your children got to private schools, it is a good idea to speak about your hopes and dreams for your children before they step foot in school and to open an educational savings plan to help manage school fees. A qualified financial advisor can sort through the options available to you and help you choose the appropriate plan. 3 –… | Read More »
P.E.C.K. your way to financial health, a newlywed’s guide
It’s Spring; wedding season is upon us! Weddings usually bring happy thoughts of holding hands and romance and new lives. But, that is only a small percentage of what actually goes into being married. The majority of marriage is grunt work, not romance. One of the touchiest parts of being married is money – who earns it, what it means, where it’s kept, when it’s saved and how it’s spent. Money is a subject that will continue throughout your whole marriage. Before you get married, you most definitely want to talk money. It does not get easier to broach once you’re hitched. It is just good common sense to know about your intended’s money language, money comprehension and money fitness. It’s hard to do but if the tough questions can’t or won’t be answered, then you may have a much larger problem on your hands. I have heard people say that feels too awkward or out of bounds or threatening and sometimes even shameful to talk about money. But, it is simply imperative to your marriage’s health to ask each other hard questions and answer honestly. You will need to keep the money dialogue going without ridicule or eye rolling! We all grew up differently and need, expect and want different things from money. So, let’s talk about it. There are so many different aspects of marriage money that we’ve put together a series of questions for the bride and groom to be. We are calling it PECK, as in: Practical, Emotional, Contractual and Kids marriage questions that every couple needs to discuss before marriage. It might even save you from making a disastrous decision. Today we are tackling the P, as in Practical questions, you need to ask each other. We’ll cover the Emotional, Contractual and Kids aspects of the PECK program on consecutive Mondays here on this blog. We begin with the nine most bare bones, practical questions… | Read More »
Active money management means taking advantage of market volatility
At a financial planning workshop we recently hosted at MomCom Austin, we fielded the following question: with the stock market so unpredictable, should I be putting some of my money in cash? The easy answer is yes, you should always have some money in cash. We advocate having six times your paycheck, or three month’s salary, in a money market account for easy access. This is your emergency fund for unexpected expenses like car repairs and medical emergencies. Keep this account replenished. But that’s just the first level of the “should I move money to cash” conversation. We are strong believers in transparency in your investments and the continuous ability to move your money to cash positions when the market calls for it. This is the essence of active money management and it allows us to avoid being fearful of market volatility. This is important because we know that market downturns can yield attractive buying opportunities. The key is to stay poised for investment opportunities when they arise. Your age and your risk tolerance level will determine how much risk you should be taking in the equity market. In general, the closer you are to retirement, the less risk you should be taking. As an alternative to cash, we look at individual corporate bonds with less than two years to maturity. The yield to maturity rate plays a key factor in our decision to purchase these bonds. We steer clear of bond funds and we avoid long-term bonds as well because we don’t like to lock ourselves into a rate for more than two years Overall, though, we would caution against pure volatility being the deciding factor in moving your investments from the stock market to cash. By definition, volatility means the stock market is moving up as well as down and active money management allows investors to take advantage of that volatility. These conditions create opportunities for both purchases… | Read More »
Annuity fine print can cost you money.
Recently a client of ours came to us with an indexed annuity that he had just bought and wanted us to take an independent look at. We called the annuity company with him and asked a wide variety of questions to better understand the terms and conditions of the product. Our clients’ main concern was how he could access his money. What we found out was news to our client and he didn’t like what we learned. This particular product had ten-year surrender period. This means if our client needed to pull his lump sum of money out he would have been charged between 12% and 4% depending on which contact year he did so. He did have access to 10% of the contract value every year without penalty but not until the second contract year. This annuity also had a lifetime income payment benefit. The longer he waited to access this benefit the higher percentage of his benefit base value he could access. At our clients current age he could access 5.2% a year for the rest of his life. The major problem with this was that once he attempted to access this income rider, the payment amount was fixed for life, which would not keep up with inflation. This benefit was costing our client .95%. After the phone call I asked our client what he told the people who sold him this product. He said, “I want to be able to access my money when I need it.” This statement threw up a giant red flag to me because this particular annuity had plenty of limitations on how he could access his money. Then I looked at the start date of this contract and realized that he had purchased this product within the last month. I immediately thought of the free look period. Every insurance-based product has what is called a free look period, which varies by company… | Read More »