A Woman's Guide to Growing Wealth | Abacus Wealth Partners

Episode Summary

Women don’t always have it easy when it comes to growing their wealth. Today on the If Money Were Easy podcast, co-hosts Mary Beth Storjohann, CFP® and Neela Hummel, CFP® address some of the unique financial challenges women face, how women can leverage their voices to take more control of their financial future, and explore strategies women can embrace in their 40s, 50s, 60s for growing and protecting their wealth, and how women can approach retirement with a newfound confidence.

Growing wealth for women doesn’t have to be complex. It can be fun, exciting, empowering and something genuinely enjoyed. Listen to this episode to learn how women can better understand their present and future needs, and build a better plan for their financial future.

What You’ll Learn in This Episode:

How money is unique for women
A study showing the compounding factors affecting women’s financial well being
The best superpower to find in a financial advisor (it might not be what you think)
How women can grow wealth in their 40s and the pressures they may face
A great place to start when growing your wealth
How to prioritize where you allocate your money
Retirement strategies that help keep you on track
The mindset shift that should happen as you move into your 50s
A good rule for that next great investment you might hear about
How to plan now for future expenses (especially if you have or are considering children)
The importance of earmarking money for a future expense when large purchases or expenses are on the horizon
What role life and disability insurance plays in your financial future
How to avoid “the freakout” once you reach retirement
The importance of keeping community once you’ve reached retirement
Adjustments to make on your insurance policies when you approach retirement
Your financial journey is like a roller coaster, and that’s okay!
A few episode takeaways and how a reverse bucket list can guide you toward reaching your financial goals

Resources Mentioned on the Show:

Additional Resources:

Stay Connected:

Join the Abacus community by connecting with us on Facebook, Twitter, Instagram and on LinkedIn.
Connect with Mary Beth on Twitter, Instagram, and on LinkedIn.
Connect with Neela on Twitter, Instagram, and on LinkedIn.

Transcript of Episode

Neela (00:15):

Hey there. Welcome to the If Money Were Easy podcast, the show where we teach you how to expand what’s possible with your money. We’re your hosts Neela Hummel

Mary Beth (00:24):

And Mary Beth Storjohann,

Neela (00:25):

Certified financial planners and co-CEOs of Abacus Wealth Partners. Today on the show we’re going to talk about a woman’s guide to growing her wealth.

Mary Beth (00:35):

But before we jump in, a brief disclosure from our compliance department. This podcast is for educational purposes and is not intended as investment, legal, or tax advice. Any opinion shared is not an opinion of Abacus Wealth Partners. Let’s jump in. Alright. Neela. Wealth, women growing wealth as women ages. Let’s talk about it.

Neela (01:00):

Let’s dive in. Okay. In the interest of complete transparency, we have to establish that women itself, we are not a niche, right? We are 51% of the population and yet as financial planners, we have seen some things that are kind of consistent across the board that are unique financial aspects that impact women. So what are some of those ways that money is unique to the female demographic?

Mary Beth (01:31):

So a couple of things that hit women hardest, and we talked about this in previous episodes. So first, the average woman in the United States lives five years longer than the average man, and that gap increases to seven years internationally. So women are living five years longer than the average man. That means their money needs to last for that longer time period as well. So we have a longer life. However, women and men still aren’t paid the same. Recent studies show that women of color make significantly less for every dollar than their male counterparts make with women as a gender group making an average of 77 cents for every dollar their male counterparts take home.

Neela (02:08):

Let me get this straight. We are living longer and we are making less. And yes, you’re telling me that has financial ramifications.

Mary Beth (02:18):

Yes, it does. That compound over time. Shocking. So we have the financial issues that women face just by being women. Just by being women. We carry around the longer lives, the gender wage gap, the being in the sandwich generation, taking care of children and parents and being outta the workforce. And we are an often underestimated group by the financial services industry. We are underestimated and we are overlooked. However, stats show that by 2028 women will control 75% of discretionary spending worldwide. That’s a whole lot of power that women have.

Neela (02:56):

So much. I love that. I think, think that, you know, as we think about these are the obstacles that we are facing as a group, and yet the corollary of that is this incredible economic opportunity that women as a whole are gonna have. Thinking about all that spending power, all of that economic weight that we’re gonna be able to throw around that money is power. How in the heck do we leverage that?

Mary Beth (03:23):

Exactly. And I think the other thing, going back to your first comment where women are not a niche. I think it’s the unfortunate part of this industry, and I’ve seen it over the 18 years I’ve been, it is, again, we are an underestimated and often ignored group, but I know we talk a lot about this as Abacus is making sure we’re talking to both spouses. We obviously prioritize women, however, wives, spouses, breadwinning women are just often ignored. You see it in that men are addressed first in the meeting. They have, the reports are shared with them. They come first on mailing all of the things. And I think women are underestimated in their desire for financial advice and their interest in investments and growing their wealth and how good they are at it. Statistics show women are better than men at investing because they don’t let their feelings get involved.

Neela (04:08):

Hear ye hear ye. And you know, the other piece on top of that is the way we want to receive and talk about financial information might be different. I mean, every woman who is listening here, raise your hand if you’ve ever been mansplained to about some sort of an economic concept. We don’t need to be talked at anymore. We need to be listened to. You and I talk about this a lot, the number one best characteristic of a financial advisor is empathy. That is a superpower.

Mary Beth (04:40):

Exactly. And I think there is so much to be said for meeting clients where they are and bringing them along on the journey. And the empathy is huge, right? It’s about the clients, it’s about us as women, it’s about our unique needs in financial planning. It’s about the client’s unique perspective. What are they looking to accomplish and how do we get them there as opposed to, hey, let me show you this financial report, these 25 pages and the back projections to prove that I am right in my recommendations to you. Right? It’s often not about that. There is some underlying money script narrative, fear there that we are. It is our job to keep the clients on track and women in general. We carry around a lot of pressure. And so let’s dive in, right? Because we carry around a lot of pressure. But I don’t know a woman out there who isn’t really interested in growing her wealth, right? Growing her net worth and learning what that’s about and how we can do that. So one of the things we wanna talk about today is how we can do that over the decades as we grow. You’re in certain life phases and how do you keep your wealth on an upward trajectory until that time as to which you need to start to spend it down.

Neela (05:40):

Right?

Mary Beth (05:41):

Let’s kick it off.

Neela (05:42):

Yeah. So if we start with, let’s dive into your forties and maybe you call in your early forties, but what is the best way for women to really start growing their wealth in that decade and and what do you think some of the pressures that you mentioned that women are really, really facing in that decade?

Mary Beth (05:58):

Yeah, I would almost probably batch your forties in with your late thirties. I think this is the point in time you’re seeing and that you want it first, if you have never done it, you wanna check on your net worth, right? This is the best way to check on your financial health is to understand your net worth because that is a look at all of your assets. You’re adding everything up, your cash, your real estate, your retirement accounts, your outside investments, and then you’re subtracting all of your debt, your mortgages, your student loans, your credit cards. And if you have never done that in your life, that’s obviously the first starting point to measure because you’re creating your starting line. So everything going forward is gonna be off of this initial net worth statement. I can tell you I’ve been tracking mine for over 10 years and have a very fancy spreadsheet with multiple tabs on it. <laugh> But I think starting with your net worth is a great way to get a snapshot, first of all of your accounts and assets and liabilities into one place. And then you have that clear starting line. That’s where I start. How about you?

Neela (06:52):

Yeah, to just add onto that, I think that’s so important because sometimes it’s easy to hide from the numbers, especially if the numbers aren’t quite where you want them to be, it’s easier to just ignore them. So I love your recommendation of just figuring out what the starting line is because then you actually know where you can go from. I think the other thing that I would expound upon is you are in this phase where you’re probably in the middle of your working years. You’re maybe a little further along in your career. And so this is a really good time to hone in on the habits to make your plan successful. Make sure that you are saving regularly. Are you paying yourself first? Are you taking a look at the non great debt that we see that can often kind of erode wealth over time? Are we paying off our credit cards in full every month, for example? So just make sure that you’re getting a good system in place so that the benefits can expand and compound over time.

Mary Beth (07:47):

I love that. I have a financial planning question for you.

Neela (07:51):

Ooh, hit me.

Mary Beth (07:51):

Let’s play, “What if,” okay? What if someone is in their early forties, they’ve got a mortgage, they’ve got kids, they have retirement, they’re what they’re trying to save for. They’ve got some credit card debt, let’s say maybe they, they have their credit cards, they pay it off every month. But how do you prioritize saving for retirement, saving for kids’ college? Which one am I doing first? What do I need to have checked off before I move forward?

Neela (08:18):

Yeah, I often think about it in terms of needs, savings, wants. And so if you think about your needs, you mentioned a mortgage, you have to pay for your housing, you’ve gotta pay for food. You’ve kind of keep that foundation solid. And then the next tier really on that pyramid would be the savings. And we get this question a lot, especially when it comes to splitting savings between college planning, retirement, et cetera. And you know what I would say to that is you always have to put your oxygen mask on first. So make sure that you have a good plan in place for your own retirement funds really before you start saving aggressively for college planning. I think for a lot of people who might wanna get started on college planning but don’t necessarily feel like they’ve made as much progress as they want to on the retirement side, opening up a college savings account and starting with a really small contribution and honestly redirecting grandparents and birthday party invitees to say, Hey, we don’t need any stuff, but uh, we’d really take some help sending junior to college.

Mary Beth (09:22):

Yeah, I love it. I also say that even if you can’t do what you’d like towards college at this point in time looking forward, you could always help them from cash flow with tuition when they are there. And you can always help them in the future to actually pay off those student loans if necessary as well. So even though you might not be able to do what you want today, assuming you have yourself set up financially and you are saving for your future, you may be able to do that in the future to help them. So you need to take care of yourself so that they don’t have to take care of you right, later on.

Neela (09:51):

Right.

Mary Beth (09:52):

That’s the goal.

Neela (09:53):

And so we talked a little bit about retirement savings at this point in somebody’s career, a woman’s career, late thirties, early forties. What are some of the retirement strategies that you would recommend that can really set somebody up to be on track?

Mary Beth (10:06):

You know, I’m always looking for, are you maximizing your 401k? So obviously taking any match that you have from your employer and, and not leaving any money on the table there, but looking at your 401k, does a traditional or a Roth contribution make sense depending on wherever you are for your tax situation, hitting that first and then looking at any other employer incentives, if there are ways for you to stash away additional funds depending on where you work. And from there, after tax investments, I’m always looking for, like, what are your options? Like what are you looking to save for, so we start with the retirement and retirement is great and not to scare anybody. I think maxing out your 401k is fantastic, but when you do run the numbers and you’re looking at the longevity ahead of you, a lot of times we do need to do more than our 401ks like that. That just is what I found. I dunno if you’ve seen anything differently, but I find that the 401k is fantastic, but in order for you to truly live the lifestyle that you may want, you’re likely gonna have to go above and beyond,

Neela (10:59):

Right.

MaryBeth (11:00):

So I think that ties into retirement, the 401K or employer sponsored plan, any additional depending on what you need into an after tax. And then if you’re freaking out about getting there and concerned about, oh my gosh, this is so much money back into the focus on career growth, right? How do you focus on growing your income? This is the age, your human capital, your ability to earn an income is your greatest asset at this point in time for many, many people. And so how do you get that income up over time?

Neela (11:28):

Right? And you know, I’m so glad you mentioned that career capital, because you think about it, how many more years are you gonna work? What is the actual current day value of those future earnings? That has to be your biggest asset. And so you also think about how can I protect that? How can I protect that by growing my skills and also making sure that I’m covered with things like disability insurance so that if something did happen to me, I would be covered and be able to continue taking care of my family.

MaryBeth (11:55):

Yes, definitely. I think the risk protection, the risk management is huge for this age as well.

Neela (12:00):

Right. So moving on to the next decade, the fifties, what do you feel like starts to shift between the decade we just talked about as you hit this golden decade?

MaryBeth (12:13):

Well first tell me what makes it a golden decade.

Neela (12:17):

I don’t, I just feel like you see pictures of these incredible women in their fifties and everything’s bright and shiny and I just feel like they’re on a beach somewhere. So I might have just made that up, but I’m gonna go with it.

MaryBeth (12:28):

I mean, I think maybe their kids are older and they’re not tired. That’s why I’m gonna call. That’s the golden. They look more awake, these women in their fifties.

Neela (12:34):

So you’re telling me they weren’t up with a 2 year old between the hours of 2:00 AM and 5:00 AM last night? Is that what you’re telling me?

MaryBeth (12:40):

I’m hoping. I’m hoping that’s what we have to look forward to. <laugh>. So we’re gonna call the fifties golden decade.

Neela (12:45):

You heard it here first folks.

MaryBeth (12:47):

We’re here for it. <laugh>. But I will say, I think I’m joking, but, but really this is the transition phase of okay, your kids are older, you’re a little more steady, you have more time on your hands. And so your career really does, you hit like a peak stride in your fifties into your sixties where your income, your top of your income game and you have a little bit more of that time on your hands to invest in your career or in your self-care however you want because you, your family is a little bit, your children are a little bit more grown typically on average. And so I’d say when you hit this stage, you’re almost straddling because you’re moving out of this constant checking on your cashflow and making sure you’re stashing away every single penny. And you’re starting to look up like, oh no, okay, that retirement’s kind of on the horizon depending on how you’re planning. You could be looking at retiring in your fifties, sixties, and that’s coming up around the corner. And so the first thing you wanna do is really take stock of, what does it look like for me to transition into this work optional or retirement period. I would say that would be my recommendation. First is, I wanna be really clear on what I’m going to, if it’s coming around the corner in the next 10, 15 years, what do I want for myself? And I need to make sure I’m, I’m ramping up to ensure I have the plan in place to get there.

Neela (13:54):

Yeah. Yeah, I love that. And thinking through too, what is the end game? What is the transition point? And am I already there? Is there a career switch that I’m thinking about making that might delay how long I work, but will bring me a lot more enjoyment? I think that’s a really fun thing to explore too, because you’re right, all of a sudden you maybe have more time, you might have reached a point in your career where you’ve developed a certain level of responsibility and if you have put those good habits in place from the previous decades, a lot of your stuff’s kind of on autopilot. And so you exactly start to see where, where things are going. And that next chapter is looming a little closer than it was before.

MaryBeth (14:35):

Love it. I would say, you know, and moving into that, that phase also, you’re looking at all of the standard things that you should be doing on almost on an annual, we’re calling it a decade basis, but ideally you’re checking on your net worth every year to make sure it’s moving in the right direction. So you’re seeing that trending progress. If you have not moved up from your forties to your fifties, there is likely a huge life transition that you had or something that needs to be addressed. And you want it to be moving at a general upward trend. So you, you wanna pause to reevaluate if you, if you’ve gone backwards. You wanna reevaluate your current cash flow needs to make sure that you’re still on track for all of that autopilot. You’re still able to save to up your savings if possible as well. Reevaluate your goals. What does life look like in your fifties? You do have more time, which means you might have more time to spend your money too. Your travel goals might increase. Your spending might increase. You might have those kids who are in college now and if you don’t have the 529 plan, maybe you’re paying for an apartment rent for them. So again, looking at your cash flow, understanding what needs are coming up and making those adjustments accordingly. I would say the other thing just to consider in terms of growing your wealth along the way, tell me how you feel about opportunistic wealth growing. So in terms of hot investments, hot tips, buying that rental, real estate, investing in that next hot stock, how do you approach it for clients who come to you with their next great investment idea?

Neela (15:59):

Ooh, what a tee up <laugh>. So in general, I could spend days talking about the role financial media plays in the individual investor’s life. And my, my simple rule of thumb that is absolutely where I start is if it sounds too good to be true, it is that when it comes to any kind of a hot tip that is a significant deviation from a pretty solid diversified asset allocation strategy, that it’s more of a gamble and it is hard to isolate the gambling aspect from the risk adjusted return. So as we were talking about what to do throughout the decades, I think one other thing that is so important for women to examine is how are our investments actually set up? If we are living longer, we need to make sure that our assets are gonna keep up. And so are we investing with that time horizon in mind? So when it goes back to this idea of a hot tip, it’s great, how does that fit in your overall plan? What happens if that tip goes to zero? Are we ready to deal with that? Is it a goal or is it, is it a shiny object? And I think identifying where it really fits, there’s often not a great spot for it in the financial plan, but maybe there’s a fun account that we can invest in. Like I will tell you, I enjoy going to Vegas every couple of years and I will put some money in blackjack and know that I am ready to walk away from that money, but I have that money mentally earmarked as fun money. So I don’t wanna play that game with money that I need to be there when I’m ready to use it.

MaryBeth (17:43):

Yeah. And I would say that’s exactly right. I think having the parameters on how you will use the funds and knowing, okay, this 5%, this fixed amount, whatever it is that you’re going to invest. And then I always say, take it to Vegas, treat it like you’re going to Vegas and if you get joy outta this, fine. If you’d get joy outta Vegas, go to Vegas. But if you’re going to do this, at what point do you sell? How do you know you’ve made it, what do you pull the funds back out? And that’s always my ask, cuz how much are you looking to make? What is the joy or the thrill that you’re trying to get? Is there a fixed amount? And it always goes back to, you know, what’s your sense of enough? Like what is, yeah, what is your enough going to be from this investment? And you know, a lot of times people are looking for that quick turnaround and I’d say being aware, agreed, being aware of where your money is invested in understanding how it’s working for you over the long term is really important. And if you need the money in the short term, you need to either have it set aside in a short term investment account or something in cash.

Neela (18:41):

Yep. Absolutely. Making sure that every dollar really needs a job. And what is that job? Is that job part of your fun future or is it part of, like you said, treat it as your, as your Vegas account and act accordingly?

MaryBeth (18:52):

Yeah.

Neela (18:54):

Anything else in your fifties that is maybe some low hanging fruit for your typical female investor?

MaryBeth (19:00):

I’d say equity compensation, but that’s any decade, right? So if you’re looking at equity compensation is low-hanging fruit, anything where you could be leaving money on the table, take all of the quote unquote free money that we talk about. Where are the rewards maximizing your employee benefits? The catchup contributions I think are really important for your retirement accounts, for your ira, your 401k that allows you to really speed up and accelerate what you’re setting aside for your future. I think that’s a great one. What are we missing?

Neela (19:26):

I think those are the big ones. I mean, you talked about cash flow, I’m, I’m always someone who wants people to examine their cash. I see that often that there’s a tendency to build up cash when you’ve built these systems, you’ve got your expenses that are pretty steady. Sometimes there’s a tendency to hold onto more cash than we need. And as we know, cash just kind of loses money over time when it comes to inflation.

MaryBeth (19:51):

Yeah, I think it’s interesting. I will say growing your wealth in your forties and fifties and it’s recognizing, you know, some people choose to start a family and some people choose not to start a family. And I respect either way you go and it’s understanding the way that choosing to start a family can relate, let’s be honest, negatively impact your wealth through growing opportunities. There’s a lot of funds that you’re just pouring out between childcare, daycare, private school, if you choose that option. Uh, just the amount of food and groceries in general. And so thinking about the growing your wealth in your fifties, one of the things that I really see is this idea of setting up accounts for future expenses for your children. So if you’re gonna buy them a car in the future, if you need to pay for a wedding, whatever those things are that you help them launch a business, the best thing that you can do is to make sure that you’re earmarking funds now for those expenses and planning in advance. And if they come back into your plan for yourself personally, fantastic. But you’re not taking away from your own personal earmarked wealth for your retirement when those things come up. I like to have clients set up those accounts in their forties, early fifties. If you’re a person who’s paying for a hundred thousand dollars wedding because that’s the kind of experience that you want, you probably wanna earmark that and start setting aside for it.

Neela (20:57):

That’s such a good idea because I think also sometimes we can be really hard on ourselves in giving ourselves permission to spend money in certain places. And when you have an account that’s dedicated to a particular reason, it almost makes it easier to say, no, no, no. I saved for this, so now I’m gonna take this money out for that instead of this idea that every single dollar needs to be saved no matter what.

MaryBeth (21:21):

Exactly. And going back to the one thing that I think we hit on, we did talk about the risk management, and this is more protecting wealth than it is growing wealth. But if we’re talking about even generational wealth opportunities, having disability insurance but also having the appropriate amount of life insurance for your family is important. Because going back to that human capital, if your ability to earn an income is your greatest asset, and if your family is counting on your income and you do have children at home, making sure you have the right amount of insurance through a term insurance policy is really important. Right? Because what, what happens to your family if they lose your income? That’s not comfortable to think about, but it could be really drastic. And so ensuring you have the appropriate amount in place to get them through is important.

Neela (21:59):

Right. Great point. And so if we think about moving on to the next decade, the sixties, now that I’ve used all of my chips on the, on the golden decade of the fifties,

MaryBeth (22:10):

I know.

Neela (22:11):

Now I don’t know what to call the sixties, but I’m gonna, I’m gonna call them the glorious sixties for now.

MaryBeth (22:15):

I was gonna say, this is gonna be where we get listener feedback.

Neela (22:17):

Listener feedback, help us out, help us out. So as we think about this decade, what do we think are some of the priorities for women at this space?

MaryBeth (22:26):

Number one, you’re gearing up for, this is the decade you’re looking at social security, you’re looking at Medicare, these are the things that are coming up and you’re starting to think about, okay, am I gonna continue on this path? Am I transitioning to retirement? Am I making work optional? This is the point where a lot of people get to choose a new career. You get to slow down. There’s a lot of different places and pivots you can make in your life during this decade. So I think the very first thing that you do is just consider what do you want life to look like and what would truly make you happy? One of the questions we talked about again, where do I wanna spend my time? What do I wanna spend my resources on? Like what fills me up? Not with the financial piece on your mind, but how do you want to design your life? What are you looking for? And getting clear on that. I think really spending a lot of time there because we see it, people are gearing up and they’re so excited about retirement and then they hit retirement and if they don’t have a plan or a vision for what it looks like, a lot of people kind of freak out. Whether they go back into work or they’re unhappy, they’re unfulfilled. And so really spending that time to envision what you want life to look like in this decade and going forward is important because it’s major life transitions that happen at this point in time.

Neela (23:35):

Absolutely. Yeah. And, and you know, thinking about those transitions, is a big transition something that you’re hoping to make or is maybe a smaller transition? Is it going from full-time employment to no employment? Or is it full-time employment to part-time employment? Those are two very different paths. Identifying what you want your life to look like. What is the enough number you need and are there multiple ways of getting there? Is your number maybe a little less because you’ve opt to add a couple years of part-time work, doing something that’s incredibly emotionally fulfilling, that’s a great way to head towards a much more work optional period of your life.

MaryBeth (24:19):

Agree. And I think viewing your future through the lens of legacy and impact and what you say, what you wanna be remembered for. But I think a lot of people find fulfillment in this life stage by one, what their goals are, but still staying connected to community. I think community is, or family is still very important for this generation because it’s what motivates you to keep going forward. So whether you’re volunteering your time, you’re doing nonprofits, you’re working part-time, I really think it’s important to find community and to stay connected to people because data shows that’s what keeps you living a longer life. It’s having those connections and those relationships.

Neela (24:56):

It’s such an interesting point because I’m, I’m sure you’ve seen this, but you’ve had people who decided they wanted to stop working and they’re gonna sell their house and they’re gonna move to a totally new community where they have no connections whatsoever. And knowing that you’re doing that, that you are leaving some community behind and that wherever you’re going, hopefully there’s the infrastructure and the setup to rebuild that community because you need it wherever it’s gonna be. Whether it’s where you are now or where you’re gonna end up. You need to find that community to really keep a rich life.

MaryBeth (25:28):

Agreed. I think many of us in general just underestimate how much work and time it does take to build community, right? And to build those relationships. And so sometimes quick decisions are made to pick up and move locations and to reestablish, but there is a time commitment involved and you are leaving something behind. And so when you make those, I’m not against adventure, but it’s making sure that you do prioritize those commitments and finding new relationships and not waiting for people to find you, but that you’re seeking them out on the other side.

Neela (25:56):

Right. Absolutely. And then, you know, you made some great points about risk management and the importance of that during your bigger earning years. But as you get closer to maybe a work optional and that you’re approaching whatever your enough number is, what role do you think things like disability insurance and term insurance continue to play?

MaryBeth (26:17):

Once you transition out of the workforce? The disability insurance is meant to protect your income stream. If you don’t have an employer sponsored plan and you happen to be an entrepreneur or have a private policy, those things can typically go to the wayside. You can’t even prove that you have an income stream at that point in time. So that policy is probably moot from your disability insurance policy. And same thing with term insurance policies. There are some great ways to actually ladder, which is called ladder, a laddering strategy for your term, term insurance policies. Which basically you have multiple policies, they are set to expire at different times depending on how much income needs to be replaced. So that you may have higher premiums while you have three policies in place in your forties, early fifties. But they start to expire over time as that amount of income that needs to be protected decreases. So I think once you hit your sixties, those insurance needs go away. And then you have the health insurance, long-term care insurance and other things that come into play in terms of how are you caring for yourself, what happens for your healthcare over the long term? And this is what you’re thinking about in your fifties and sixties, to be honest of what it looks like in your seventies, eighties, and nineties. How are you gonna pay for that healthcare assisted living if necessary? You don’t want to think about it. It’s not fun to think that our bodies might stop working on us, but it’s the reality that many of us face. And so it is that you would live with your family, you would pay for a live-in care, you would want to be in a private facility. Those are all things that you’re thinking about really you should be thinking about in your fifties to make sure that you’re planning for that you have the resources for if possible.

Neela (27:44):

Yep. And I’m glad you mentioned long-term care cause that is something we talk about women also being more likely to take time out of the workforce doing some of this unpaid caretaker work. We talked a little bit about families with young children and some families that don’t. Many women also in this period are looking at balancing the needs of their parents. Now all of a sudden you have this aging older generation and you know, nine times outta 10 they’re looking at you saying, Hey, are you gonna be the one who’s helping here?

MaryBeth (28:12):

It’s always the woman. I will say even always, even do you have it now? Even with my friends now, there are brothers and sisters, and it’s always the sister who is looked towards to handle the in-home care. Right? And that’s the labor of the care.

Neela (28:25):

Right. That’s the other emotional concern. You’re seeing your parents aging in front of you, but there is a financial component there. Then you’re looking at the cost of, okay, do they need help where they’re living? Should we be looking at living together? What kind of care might they need? And so there are those extra expenses that can sometimes be a little bit of a moving target as we think about our own financial plan and, and how do we make sure we are helping take care of the community and not leaving anybody really struggling.

MaryBeth (28:56):

Yeah. You know, one of the things that just crossed my mind is this idea. I did say, you know, you do want your wealth on this upward trajectory over time, but really it’s like a rollercoaster, right? There are ups and downs, although we do want our net worth to grow over time and we need to improve our wealth does need to grow in order to support us in this drawdown period where we don’t work and we’re living off of our assets. It shouldn’t prevent you from making pivots in your life if you decide you wanna change your career in your forties. If you do the planning and you know the salary that you can earn or you make the adjustments to reduce your lifestyle or make the investments and you know that your income can grow as long as you’re doing the work to plan accordingly for those pivots, I don’t think that you should not make those life changes. Even if they might make a short term ding in your net worth that you’ll recover from. I think a lot of times just thinking about women in general and how hard it can be on ourselves and how we wanna have a plan and we wanna drive ourselves forward and if there’s any other type A overachievers out there, you wanna keep making progress. So often we don’t allow ourselves to take that risk or to bet on ourselves because we’re worried about the future, we’re worried about others and we’re worried about the wealth that must grow. I need to take care of future me. So I can’t allow myself to enjoy in the moment. And I think it’s important to look at those investments in those pivots. Some of the best, most rewarding client work I’ve done is is working with clients through those career transitions when they’ve made those pivots and you’ve seen the salary grow or they’ve made an investment in themselves and taken a sabbatical because that’s an investment in their self-care and they’re willing to double down on work when they get back. So I think it’s important also, and we’re talking about growing wealth, that we’re also making sure we’re prioritizing some self-care in there as well and allowing ourselves to take some risks, assuming we’re thinking through the financial implications and planning around it. I’m not, I’m not condoning not planned financial risks, but I think if you can plan around it, don’t hold yourself back from that.

Neela (30:52):

I just also love the language that you use there. You’re not talking about taking money out to spend on yourself. You are taking that money out to invest in yourself. What do you need to take it to the next level? Are you stuck in a career that you are not enjoying but you happen to be making a lot of money? What are the levers that can be pulled so that you can make that pivot? Maybe it is to live in a different area, live with other people, change some other circumstances, but how can you take some of that money and make sure that you are investing in the most important person, which is you.

MaryBeth (31:24):

Yep, exactly.

Neela (31:25):

So if we were to wrap it all up and put a bow on it, what are some of the overarching takeaways that we would want some women to take from this episode?

MaryBeth (31:36):

I mean, I don’t know if we hit on it enough, but I’d say your investment allocation is a key driver in the growth of your wealth. And so understanding how your investments are allocated, whether it’s in your employer sponsored retirement plan, your own personal investments, having a high level idea of the allocation and if it’s appropriate based on your age in time horizon until you need the money is very important. I think that’s a key takeaway. What do you think?

Neela (32:00):

Yeah. And I think that’s a huge one and, coming back to this idea that we keep hitting on “enough” and what’s it for? What is the goalpost? Where are we moving towards? And making sure that we understand that “why” while also recognizing some of the risks that we face so that we can make sure we are invested in saving to prepare for those.

Mary Beth (32:20):

Yeah. And I’d say understanding your cash flow every year, every decade we have lifestyle creep, we all have it. Even as your income grows, life gets expensive. We’re in a peak inflation period right now. And so just taking a look at it every now and then, you might reach a point where you’re privileged enough to not have to worry about it, but even looking at it, just checking in on it to make sure you understand what you’re spending. Cuz it might be a gut check. Or you might find that you’re oversaving in some ways and you aren’t investing in yourself. So I think it is important you don’t necessarily have to go mint.com and categorize every dollar, even though I know you said every dollar does have a job, but understanding what your spending is on an average monthly annual basis and how does that feel to you? Is it enough? Is it not enough? Checking in on that I think is an important thing to do.

Neela (33:09):

Yeah. And I think also giving ourselves permission to make progress and not have it be perfect because there’s always something more that you can be doing. If you’re sitting and listening to this and saying, oh my gosh, I haven’t done any of those things, that’s okay. How can we get started? What’s the first step that you can make in that right direction to get you on that trajectory?

Mary Beth (33:33):

Yes. And I would say one of the things that I have found that’s been wonderful along the way personally and with clients as well, especially because as women, we don’t celebrate and allow that progress enough, is to create reverse bucket lists. So not, not a bucket list of where I want to go, but actually allowing myself at the end of each year to pause and jot down a quick list of what are my five financial wins this year. What have I done right now? What progress have I made? And those compound over time when you get to look back annually, but I think a reverse bucket list allows us this time to celebrate and look back and think, huh, I negotiated that raise, I stashed away 50,000, I opened the college account, I started my 401k and put it in enough to take care of the match, whatever that is. I think celebrating those wins big or small and doing a reverse bucket list is very helpful perspective.

Neela (34:23):

Oh, I love that. It’s not only putting the tools in place, but also taking some time to reflect and, and give yourself a pat on the back of, Hey, I did some, I did some cool stuff.

Mary Beth (34:33):

Yeah, exactly. That’s it. Anything else we’re missing here?

Neela (34:37):

I think those are the big ones. I think just wrapping on that, on that idea that, you know, at every different decade, women face some unique considerations. And going back to where we started is that also means we have tremendous financial power. And so how we choose to use that power where we choose to spend our dollars, how we choose to invest those dollars matter, we need to use it.

Mary Beth (35:02):

Yeah. And I would just say that all of the statistics, everything that we’re looking at from the financial media right now, everything we’re seeing tells us a story that women today are more confident than ever in their financial lives and they’re laying a really strong foundation for future generations. So I think there’s a lot of opportunity for women. I

Neela (35:18):

Love it.

Mary Beth (35:18):

Thanks y’all.

Neela (35:19):

Thanks everyone.

Mary Beth (35:22):

Financial knowledge is for everyone. If you enjoyed today’s episode of If Money Were Easy and you’re looking for more tools and resources to expand what’s possible with your money, head to www.LearnWithAbacus.com. Abacus Wealth Partners e-learning platform, offering a variety of courses to empower you in your financial life.

Cookie	Duration	Description
cookielawinfo-checkbox-analytics	11 months	This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics".
cookielawinfo-checkbox-functional	11 months	The cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".
cookielawinfo-checkbox-necessary	11 months	This cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".
elementor	never	This cookie is used by the website's WordPress theme. It allows the website owner to implement or change the website's content in real-time.
viewed_cookie_policy	11 months	The cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.

Cookie	Duration	Description
__cf_bm	30 minutes	This cookie, set by Cloudflare, is used to support Cloudflare Bot Management.
test_cookie	15 minutes	The test_cookie is set by doubleclick.net and is used to determine if the user's browser supports cookies.
VISITOR_INFO1_LIVE	6 months	A cookie set by YouTube to measure bandwidth that determines whether the user gets the new or old player interface.
wordpress_google_apps_login	session	This is a functional cookie used for WordPress.This cookie allows the users to login to the site with their Google account.

Cookie	Duration	Description
_ga	1 year	The _ga cookie, installed by Google Analytics, calculates visitor, session and campaign data and also keeps track of site usage for the site's analytics report. The cookie stores information anonymously and assigns a randomly generated number to recognize unique visitors.
_gat_gtag_UA_1882163_6	1 minute	Set by Google to distinguish users.
_gid	1 day	Installed by Google Analytics, _gid cookie stores information on how visitors use a website, while also creating an analytics report of the website's performance. Some of the data that are collected include the number of visitors, their source, and the pages they visit anonymously.
CONSENT	1 year	YouTube sets this cookie via embedded youtube-videos and registers anonymous statistical data.
YSC	session	YSC cookie is set by Youtube and is used to track the views of embedded videos on Youtube pages.

A Woman’s Guide to Growing Wealth

If Money Were Easy

Hosted by Mary Beth Storjohann and Neela Hummel