Do you GIVE money to friends?

By now, author Elizabeth Gilbert's EAT PRAY LOVE book has been an international best seller and a movie staring Julia Roberts & Javier Bardem.

In the book, Gilbert recounts the story of how she raised money from friends to give to her friend/healer Wayan to build a home for Wayan and her daughter.

After the book came out, Gilbert has amassed a personal wealth of $25million.  Enough to build many homes many times over. 

But what happened when Gilbert decided to share some of her personal "good fortune" with close friends?  When is it a good idea to help out a friend by gifting money? 

What do you do when it comes to money + friends?

 

Letter to the Millennial Woman

These days there's so much scrutiny on all aspects of the Millennial generation's financial habits.  Yet, listening to many Millennial women, they genuinely want to make sound financial decisions.  They just don't know where to turn for information that's actually RELEVANT for their stage of life and/or don't know how to balance their major life choices with their financial ones.

We recently met a young woman who was struggling and seeking help with her financial choices in a room full of older women. 

This is our letter to her, sharing what we wish we had figured out about money in our 20's

BEST guide on Prenups & honest financial conversations before marriage

Congratulations!  You're engaged or thinking about saying "YES!"...or maybe you're the one thinking about doing the ask, having found the right one.  (Well done!)

But hold on.  You are making one of the biggest decision of your life.

Before you start thinking about the who-what-when-where-how's of your wedding, consider for a moment what will be the financial impact of marriage on your life.

If you're even considering a prenup, have an honest (and perhaps brutal) conversation with your significant other about money BEFORE the wedding.  And even if you're not considering a prenup, STILL have the conversation.  Likely several conversations before you both bind yourselves in legal and financial union. 

This is the BEST guide we've seen on prenups and how to have a serious discussion about money between those who want to get married. 

Send it to your sisters, your girlfriends...send it to anyone who's thinking about getting married.

Psst...Insider Info on Investing in Property

This week, we share key learnings from the last of our London 2016 Forum breakout sessions.

Jo Eccles (of London-based Sourcing Property and columnist for The Sunday Times) led the discussion on property investing, giving us a comprehensive summary of the London property market post-Brexit.

Even if you're not buying or investing central London property, there's still useful info below on "What You Might Not Know About Investing in Property".

Post Brexit, central London property prices have dropped 5-8% and most expect them to stay fairly flat for the next five years. 

That said, if you are looking to buy or invest in a property...

  • Everything's negotiable, BUT get it in writing:  From parking spots to types of upgrades for materials and finishings to even changes in the layout, you can (and should) negotiate everything. This is where it helps to have the experience of a property sourcing expert like Jo Eccles on your side to help know what to ask for and what to watch out for.  (Jo's even seen developers use shorter beds to make a space look bigger!)  Oh, and make sure to get an experienced solicitor on your side before signing over any money and CHECK their work.

  • It really is about LOCATION LOCATION LOCATION:  With rental yields (rental income minus mortgage and management costs) in central London rarely topping 2-3pc these days, location trumps nearly all else when it comes to property values in competitive city areas.  Further out in surburban areas there are more variables that matter, but in cities, it's usually about the comparable "price per square foot/meter" number for the local area.

  • Think through all the scenarios before buying with family / friends:  Pooling funds together to jointly buy a property together with relatives or close friends may be a good idea...but in practice, who will manage the day-to-day maintenance and admin logistics?  How will costs be split?  Who decides on the tenants and what happens when one of the buyers needs to cash out, but the others don't want to sell?  These are only some the issues to consider and discuss before investing in property with others, and a good solicitor has often seen them all before.  So ask for advice and potentially draft a joint buyers agreement that spells out the logistics in advance. 

  • Watch out for costsBuying a property usually means you're locking up a significant part of your funds in one illiquid asset.  Before committing your funds, think carefully about ALL the fee costs and capital outlays for renovations and emergency repairs, not to mention how you may be financially affected if mortgage rates increase. Expect to pay 1.5-2pc for a buyer's agent success fee as a one-off cost (if you're seeking help in finding the right property), plus approximately 10-15pc in letting and management fees in the first year if you plan to rent out the property for income.  Always read the fine print:  watch out for extra fees charged by agents (inventory charge, vacancy/renewal fee, etc).  

What's been your experience when it comes to buying / investing in property?   What advice do you have for other women?  Please share your thoughts with us on Facebook here.   

Money + Starting Your Own Thing

It's week 4 and we're continuing to share what we learned from London 2016 forum breakouts.  This week, it's about the challenges of managing your money while starting up your own business.  

Andrea Sommer of Hiver & Sarah Haque of Urban Species led this year's breakout session on "Taking the Financial Risk to Starting Your Own Business".

Taking the Financial Risk to Starting Your Own Business

  • Start with support:  Look into local business startup groups (including local councils and libraries) for business guidance, legal advice and mentorship. There's a lot of free resources out there to help you get started without having to "reinvent the wheel" from scratch.  If you have investors, utilise their experience and connections to further your business. Leverage your network and talk to as many people as possible for insight.  This is your potential customer/employee/investor base, and you’d be surprised who comes out of the woodwork to be able to help. 

  • Seek (whenever possible free) professional advice : Many business owners say that their accountant is the most important adviser they have.  The services of a professional adviser can be invaluable and can make the difference between success and failure in understanding how to manage the bloodline of your new business: cashflow!  As you go through the interview process of finding the right adviser, extract as much free advice as you can to set your business up right. 

  • Maximise your credit:  Get your personal credit score as high as possible, take out equity in your home, increase your bank overdraft and credit card limits all while you’re still earning a salary (i.e. before quitting a job to start a business).  As with any type of a career break, getting credit will be much more difficult if you don't have a steady stream of income. 

  • Think about the end gameHow you exit a business can be just as important as how you start a business.  What are your end goals and aspirations?  You need to operate your business with the mindset that you may potentially sell the business.  If so, what are the actual valuable part of your business that will be attractive to buyers?  Physical Assets?  Market Data?  Websites and other technology?  Also watch for the 4 D’s: Death, Disability, Divorce, Departure.  How are you protected?

What are your thoughts?  What advice can you share from your experiences preparing for your life's major financial moments?  Please share your thoughts with us on Facebook here.   

This One's for all the "Non-Typical" Partners

This week our message is for all the women (ex-pats, common-law/same sex couples) who have "non-typical" financial concerns living here in the UK. 

There's no doubt about it, navigating the tax landscape in the UK as an Expat, Non-Domiciled individual, or part of a Same-sex partnership is challenging. At different phases of life in the UK, the tax rules suddenly shift, making non-typical individuals more vulnerable to tax complexity. Understanding when these tax changes happen can help you plan ahead to be financially prudent, and NOT run afoul of the HMRC or its equivalent abroad.

This is one area were we STRONGLY recommend you don't just rely on word of mouth and SEEK PROFESSIONAL ADVICE.  (Please.  For your own sanity.)

Below are the key takeaways from London 2016 Forum breakout discussion on “Overcoming Financial & Legal Challenges for Non-typical Partners” led by Tor Flonaes of Maseco Private Wealth. 

New UK tax changes make it harder to keep offshore money off the tax grid.  For example, effective April 2017, HMRC will levy tax on your worldwide assets and your global income if you have been resident in the UK for more than 15 out of 20 years.  With this new change, individuals are also exposed to inheritance tax on worldwide assets as opposed to just assets based in the UK.  Be careful if only one spouse is domiciled and the other is not - special provision must be made for transfers between spouses to not bring about a tax charge.  

Americans: Get a US/UK accountant who can take care of tax filings for both.  Being an American abroad is especially complicated as the US mandates global taxation on citizens even when living abroad. Having someone who understands both the US and UK tax rules is critical for reliable advice before making financial transactions and considering the timing of US and UK tax years (e.g. you can potentially have favorable tax treatment filing gains in one country first, and then the other). 

UK Common-Law Couples: Did you know?

  • If you're married, WITHOUT children: whole estate passes to spouse outright
  • If you're married, WITH children: spouse receives half of the estate, children receive remaining 50% 
  • If you're not legally married, WITH children: entire estate passes to children, surviving partner has no entitlement

Ultimately, ask around (including on our Facebook page) to find recommended professionals for advice if you are not sure of your domicile/tax situation.  Sites such as VouchedFor and Unbiased can also be useful resources in beginning your search for the right specialist advisor(s).

(*NOTE:  We have no relationship whatsoever with VouchedFor or Unbiased.  They are simply mentioned here as a possible source of useful information.)

What are your thoughts?  What advice can you share from your experiences preparing for your life's major financial moments?  Please share your thoughts with us on Facebook here.

Life's Major Financial Moments

This week, we share the key takeaways from our London 2016 Forum breakout on “Preparing for Life’s Major Financial Moments”, led by Margaret Kelly of Josiah-Lake Gardiner Solicitors & Ruth Sturkey of The Red House.

  • Entering into Marriage or Partnerships:  Consider getting a pre-nuptial agreement.
    • Before you get married, discussions about a pre-nuptial agreement can help you and your partner determine how to sort your finances if the relationship does go awry.  It’s like life insurance; hopefully you never need it but at least you know you are protected if things do go wrong.  More importantly, discussions around the pre-nuptial can help to work out future "kinks" in your relationship.  Money is the number one reason for arguments between couples.  Working out a system of financial understanding beforehand can help reduce the need to trigger the pre-nuptial agreement.  
    • If you’re not planning on getting married, it’s even more imperative that you have a legal agreement in place with your partner; a woman can’t just assume that she is a “common law” wife. 
    • And for those of you who are married, a post-nuptial allows you and your partner to settle your affairs and assets in the event of a separation or divorce. In general, it’s always better to be up front about things with your partner as soon as possible and discuss things while the relationship is still “looking up”, as they say.
  • Caring for Elderly Parents:   Set up Power-of-Attorney and Medical Directives.  
    • Introducing the topic of a Living Will may be a good way to open the conversation with elderly relatives on what their wishes should they become incapacitated and/or when they pass. 
    • Specifically, put a legal Power-of-Attorney in place while your relatives are still sound of mind. This will allow you to make decisions on their behalf.
    • While putting in place a Power-of-Attorney, also set up a Medical Directive at the same time.  This will allow you to make medical decisions on your relative's behalf. 
    • If your relative is receptive, discuss the concept of Last Will & Testament, or at the very least have him/her update beneficiary forms across their accounts.  (This applies to partnerships as well.) 
  • Caring for your loved ones:  Set up your legal Will.  
    • If you have a very straightforward situation, there are online services that can produce a Will for as little as £200-300.  Though if your budget allows, it is best to seek personalized legal advice. 
    • You may need multiple Wills if you hold assets in different jurisdictions.  You will need to seek local advice from each country or a specialist who is familiar with the legalities of each country you are dealing with.
    • While personalized legal advice is still the preference, using an online service is still better than doing nothing at all. 

What are your thoughts?  What advice can you share from your experiences preparing for your life's major financial moments?  Please share your thoughts with us on Facebook here.

Money + Family = ?

One feedback we heard from our London 2016 Forum attendees was that they wished they could have attended more (if not ALL) of the breakout sessions.  So we thought it would be useful to summarize the key takeaways from a different breakout session each week, focused on a topic relating to how to manage money around major life events. 

This week, we share the collected group wisdom on "How to Manage Money with Family/Partners/Kids", led by Anna Sofa of Addidi Wealth

  • Focus on Setting Shared Goals.  Your partner or loved one can have a very different approach to money than yourself.  There is no one right approach, but do set aside time to agree on what's practical for both of you and will get you to your shared goals.  For some it may be separate accounts, plus a joint account for certain expenses.  For others, it may be joint accounts with agreed spending limits and target savings levels.  Communicate and agree on what you're comfortable with and keep communicating to make changes as needed in the future.  Note: if you are a caretaker, you deserve to be paid for care-taking/domestic work (talking to you stay-at-home moms).  Value your own contributions to the family. 
  • Be Sensitive to Generational Attitudes Toward Money and Discussing Money.  Many elderly parents are actually relieved to be able to open up about death and their plans for after they pass.  Opening the discussion around setting up a Living Will can help pave the way to discuss the sometimes more complicated conversation around passing of assets.  
  • Managing money with kids: there are different ways of setting up ISA's (Independent Savings Accounts) and Trusts to control when your children can access the money.  Be aware that an ISA in your child's name automatically gives them control once they reach legal age at 18.  Are you sure you want your children to have access to money at an early age?  What boundaries might you want to set for children so they understand your intentions for how they are to use the money?

What are your thoughts?  What advice can you share from your experiences managing money with family?  Please share your thoughts with us on Facebook here

No more excuses. Nope. None.

You know that voice in your head?  The one that tells you when you're procrastinating or when you're making excuses that you already KNOW are poor excuses?

Well that voice wrote down what she wants to tell you when it comes to why you're NOT INVESTING.

And you know she's so right...so listen to hear and motivate yourself to start investing!

How to talk with your kids about the M-word?

Do you remember having the dreaded "S" talk with your parents or kids?  What about the "M" talk about money?  Don't remember ever having one?

If so, you're not alone.  Many people find it uncomfortable or don't know how to talk about money with their kids.

How about starting by writing a letter?  Here's some valueable lessons on managing money from parents to their children.  

While you're thinking about the topic, here's more on why moms SHOULD manage the money...

Do You Know How Much Money Your Spouse Has?

Quick! Do you know how much income your partner makes in a year?  What about how much retirement savings s/he has?  If the answer is no to both questions, will you ask to find out?

Recent research shows that amongst newlyweds “20 percent [of men] had secret financial accounts their partners didn't know about, compared to 12 percent of women.” 

The difficulties of talking openly about money seems to common to many relationships.  How financially open are you in your relationship? 

Divorce

Divorce can be devastating enough without having to worry about how to fund your divorce...not to mention how you'll manage your living expenses until the division of assets are finally sorted out.  All of which could take years.

What if someone could give you roadmap to guide you through a divorce?  And help you envision your life after?

Well, here it is...from Maseco Private Wealth in London.

Robo Advisors...Do We Need Them?

Do women need a robo advisor just for us?  Former head of Bank of America's Global Wealth & Investment Management division, Sallie Krawcheck thinks so! As one of the most senior women on Wall-Street and the co-Founder of Ellevest, the new automated online investment advisor for women, Sallie shares her reasons for why women need to invest more

Saving your way to retiring in your 30s

It almost seems like it's an insane idea...retire in your 30s?! Only if you win the lottery or join a fantastically successful tech startup, right? 

Actually, no. 

You CAN save to retire in your 30's and here's how one "normal" couple did it.  Their personal journey may be extreme, but it still offers interesting options for reaching your own financial goals.  Lots of useful ideas here for reshaping your life to be financially free.  

The Gender Investment Gap

It's not enough that we think about the pay gap between women and men.  Over a career lifetime, the pay gap leads to an even bigger investment gap that can have a dramatic impact on a woman's financial freedom post-career. This can be as much as $2.1m!

Take a look as Sallie Krawcheck of Ellevest runs through the numbers.

 

Discussing Your Financial Future with Your Partner

When was the last time you and your partner had a chat about your financial future?  Do you know where your money is invested and how to access the funds if something were to happen? 

There's no one right way to manage joint finances, but having regular discussions with your partner about your finances can make a big difference to your financial future.