MONEY AT EVERY AGE

Did you know that women are statistically better at investing than men? Wouldn’t it be great if all women knew this and were able to build real generational wealth and craft their dream life?  

That’s what Official MoneyChick, Wendy Raizin, says and is empowering women with this knowledge.

Wendy is a former Wall Street Trader, current Chief Investment Officer, Owner of Commercial Real Estate Firm. She also has a luxury design business that keeps her creative juices flowing!  And now, co-creator of MoneyChick, an effort she’s been manifesting for years.  She’s passionate about educating women on the concepts of money, investing, being financially free, and giving them the power to get up and leave a job or a relationship whenever they want.  Because having your own money gives you boundless options. 

The theme of the issue is celebrating age, what are key things people can realistically do at each phase of life? What should a person be doing in their 30’s? 40’s? 50s?

In your 20’s-30’s 

• Budget Analysis- make sure you know to a very close number the exact amount of money you spend each month and on what. Make a spreadsheet to track expenses or, if the word spreadsheet makes you queasy, just make a simple list. Include even the unexpected expenses like gifts or car repair, home maintenance, as well as the more obvious monthly payments like rent, mortgage, car, loans, and entertainment.

• Establish Career Optional Income Strategy- If your job were to be gone tomorrow, what is your plan of action? In addition to that, even if your job is perfectly secure, what is your plan to switch lanes if you need or want to in the future?

• Student Loan Review- if you have student loans, make sure you are aware of which banks, credit unions or government institutions they are with and how much you are paying in interest. Make sure you are up to date on these loans, including deadlines and payment schedules.

• Retirement Plan options- hopefully, you are maxing out your 401K if your employer offers one, especially if they offer a match. If possible, you’ll also want to open a Roth IRA if you haven’t already done so. Try to put the maximum allowance into this account each year, $7,000 if you’re under 50 years old; $8,000 if you are over 50.

• Education Fund Planning for Kids- If you are starting a family or thinking about starting one, you’ll want to educate yourself about available education savings plans in your state. Some states offer a prepaid savings plan for the state colleges, or you can consider a 529 plan from the federal government, that allows you to save for your child’s education expenses tax- free.

• Career Benefit and Compensation Review- make sure you are taking advantage of all the benefits your company has to offer and review your compensation package to make sure it is in line with industry standards. If not, it may be time to negotiate an upgrade.

In your 40’s-50’s

• Integrate Financial Planning Strategies-If you have the luxury of a financial advisor, they will be able to help you with this. But, if you choose to manage your money on your own, educate yourself enough to be able to make an overall strategy for your current lifestyle, while keeping in mind any future plans and goals you’ll want to reach.

• Tax and Trust Strategies- At this mid-life stage, you should be aware of how taxes affect your overall income and how you might set things up for the next generation. If a trust makes sense for your family assets, consult a qualified trust attorney to create one that’s right for you.

• Conduct and insurance review- check on your insurance policies and make sure they are in good standing.

• Optimize Savings and Retirement Plan- if you haven’t gotten the most out of these plans in your younger years, look into Catch-up contributions, which allow you to put even more money away tax-free if you are over 50.
• Establish a Rollover Strategy- If you’ve left retirement accounts at a previous workplace, make sure you rollover to your current account. Do not liquidate (sell) these positions. Just roll them over to your new employer or personal account if you are self-employed.

In your sixties, you want to start to think about things like funding your passion project or projects, retirement and continued catch-up provisions. Budget analysis also still plays a role here as you figure out new income levels, as well as new standards of living and costs as you age. You’ll want to do a Social Security review and add that into your budget.  This is also the time when you may want to start think about making a wealth transfer plan. If you have accumulated some wealth along the way, how will you preserve it and pass it down to your chosen recipients when you no longer need the money. Continued tax and trust strategies will prevail here as well. Finally, you’ll want to consider philanthropic giving, if that is something you’re in a position to do.

1. This is similar to the first question but more specific: There are many options out there that can be overwhelming, should a person in their 30’s be doing the same investing/savings strategy as a person retired in their 60s? (ie, 401K, CD’s etc.

Not necessarily. While we are constantly recalculating our budgetary needs at different stages of life, each stage requires a totally different money strategy. For instance, in our 20’s we can take on more risk because if an investment goes south, we have more time to make up that loss. As we get closer to retirement age, we cannot afford to take on as must risk with our investments. Usually, we’ve accumulated more money at this older stage and putting that ‘life savings’ in too aggressive of an investment would not be a wise move. In our 30’s we might be dealing with childcare expenses and during retirement years, we might need more of an income generating strategy.

2. Is it ever “too late” to start saving/investing?

Just like it’s never too late to start moving your body, it’s never too late to start investing. True, earlier is better, but being on top of your financial situation is part of a healthy lifestyle. Money stress is still Stress and it is not good for our overall health and well-being.

3. For someone who may have a lot of debt in their lives or is using savings to launch/sustain a small business, and feels like saving money is not feasible at this time. What advice would you give them?

This is a complex question because specifics of each person’s business, debt and responsibilities can vary greatly. I would definitely recommend  that if you are in some type of high interest debt   to get out of that as soon as humanly possible. If your debt is charging you 20% interest for example, just paying that off is like making 20% return on an investment. Debt will weigh you down both mentally and physically. Even if you can’t pay off the entire amount, you can chip away one chunk at a time. You may even be able to call your creditors and negotiate better terms because at the end of the day, they would rather have some money now that wait years to get paid back.

4. Best financial advice anyone ever gave you?

Live below your means.  It still holds true. I started investing when I was 16 and someone told me then: Don’t think about what you might make, instead make sure you’ll be ok with what you might lose.

THE BIG QUESTION (one of the most popular):

Ways to start preparing for your future using only $500 (or whatever amount you think is best, I find a big issue is people think they can only start investing or thinking about future finances if they have a ton of money.

I want people to know that they don’t need a windfall of money to start. Even just $50-$100/month is better than nothing. It’s the habit that’s important. Think of your saving/investing habit like a muscle you need to strengthen and flex through practice. Get in the habit of putting away a percentage of your earnings every time. The more you do this, the more natural and automatic it will feel to you. Tiny fragments of investments add up over time like grains of rice. Before you know it, you have a decent amount to work with.

Having said that, I would not recommend risking your hard-earned money on risky investments that you don’t know a lot about. Start with an index fund like SPY, SPYG or VOO. These index funds track the biggest stocks in the market and allow you to participate in the big players without having to invest in individual stocks, which can be a bit riskier.The most important step is the first one. Don’t wait til you have a ton of money lying around. “I have so much extra money, I don’t know what to do with it”…said no one ever!