Women who stay wealthy have learned to not only grow their money, but to protect it as well. As your financial independence grows, so can your freedom and happiness!
Women have an uphill battle when it comes to creating and maintaining wealth, and congratulations to you for being where you are!
And at the same time, there are many disadvantages women you must overcome to preserve your wealth and make smart, sustainable choices. But one thing I love about women (and being a woman) is the amazing courage and determination we have to become independent, yet so caring and generous.
So to stay independent, caring and generous, wealthy women need to protect their money from unhealthy relationships, unexpected events and the inevitable…death.
Protect your wealth from bad relationships
Women should be cautious of their partner’s money habits and patterns before getting into a relationship.
In a new relationship, it’s easy to ignore the warning signs of a financially immature person...we see their good qualities and ignore the red flags. But when it comes to money patterns, this is a time that you cannot afford to ignore the warning signs.
Love can certainly have its blinders, but make sure to keep an eye open to how he spends, if he’s in debt, and how he discusses his financial situation (or if he’s secretive).
Even if someone you love isn’t intentionally trying to take advantage of your financial health, his poor financial habits could be devastating to you. Keep your money separate and safe, and consider a pre-nuptial agreement before marriage.
Protect your wealth from unexpected events
In addition to the common events such as fire, theft, vandalism, etc., you also must protect your wealth from other important risks. One risk that often is over-looked is the likelihood of becoming a bigger target for lawsuits.
As your wealth increases, it is more likely that you’ll be named in a lawsuit even if you weren’t negligent or at fault. Because it’s cheaper to settle cases rather than going to trial, a strategy that’s often used is to single out the wealthiest person in a lawsuit.
But protection doesn’t necessarily mean you have insurance, as some risks are uninsurable. An example is the risk of not being well diversified with your investments. When it comes to managing your investments you need to find strategies that reduce the risk of loss if there were a large down-turn in a concentrated area (like we’ve seen in real estate).
Protect your wealth from your death
Even before you die, your wealth can be depleted if your health and mental capacity drops significantly. And when you do go, it is very important that you have a legacy plan for your wealth. If you want to see your money go to the loved ones that are important to you, you must protect yourself with good estate planning.
The lost dollars of unprotected assets not in a will and trusts are substantial. If they end up in probate expect 3-7% to go to probate fees and even worse, if they were hit with the full estate tax (possibly as high as 55%) then Uncle Sam will be throwing your funeral party.
But unfortunately many women overlook the need to make a plan to protect their assets because they figure that someone else will do it for them, that it’s already done, or that it’s not necessary.
And without a comprehensive plan that includes the possibility of mental incapacity and death, you will leave these important decisions up to (1) your spouse or partner, (2) your children, (3) other family members, or (4) a judge. In all four cases you’re not the one in charge, and your views will be significantly different theirs.
The bottom line…if you want to stay wealthy and you want your wealth to go where YOU want it to go after you die, then don’t let your fears and procrastination give that power away. Being prepared is essential in sustaining your lifestyle, not to mention maintaining the freedom of transferring your assets to your heirs in the manner YOU want them to go (rather than how the courts say they should go).
Read full article, “How Smart Women Protect Their Money”.
Angie M. Grainger, The Black Belt Money Master
CPA/PFS, CFP®, Certified Money Coach