As a female lawyer or executive, your work life is unbelievably demanding. Your time is not your own. If you have a family at home, the chances are it’s a real juggling act. Really, the women I meet in my work are nothing short of miracle workers. But they’ve come to me for a reason – to help take a little off their plate, and help them achieve all their goals.
My clients are high earners and high fliers. They have an expensive lifestyle, but they’re well compensated. And they all have big dreams for the future too, whether that’s starting their own business, or accumulating enough wealth to retire early and live out their dreams unencumbered by work obligations and pressures.
Whatever their goals are, impeccable management of their finances is absolutely key to achieving them all, and one of the most important tools to do that is the ability to make wise decisions around their investment options.
Take a New Look at Your Investment Options
The world of investment can seem daunting to some. Many of my clients, when I first meet them, have only really dipped a toe in. Maybe they’ve got a retirement account which does its own thing without much of their involvement. Maybe they’ve got a high yield savings account on the recommendation of a bank manager. Maybe they’ve invested in property – always seems like one of the most safe and sensible investment options, right?
But my clients work hard for their money. They deserve to have their money work hard for them, and there are some investment options that can really help you to make the most of your money. Investing helps you to grow your wealth, but it’s not as simple as that. Your investment strategies need to be closely tied to your financial goals; potential growth as well as risk needs to be factored into your financial plan.The
Benefits of a Highly Diversified Investment Portfolio
A highly diversified investment portfolio is often a wise start – that’s the financial equivalent of not putting all of your eggs in one basket. In that way, all your goals are not dependent on one investment, so if that investment goes a little stagnant or into decline, that’s okay. Your other investments can support your overall plan in the meantime.
As well as the more obvious choices like savings accounts, the way I recommend my clients diversify their portfolios is by using stock funds and bond funds, either in the form of mutual funds, index funds or ETFs, which are low-cost, tax-efficient liquid funds. So there are lots of investment options out there and it’s all about finding what works best for you and your goals.
The liquidity, the yield, the risk – these are all factors which vary wildly between investment options, and will affect your path to achieving your goals. To decide on which investments are right for you, we need to look at what your specific goals are, what the time horizon is for those goals, and how much risk you can tolerate.
Based on those three factors, you can devise the right plan, so it’s crucially important to establish what the right investment portfolio looks like for you. And this is not a DIY thing. This is where you really do need to leverage the expertise of a professional. As professional women, you are flying in your own career, most likely having made excellent professional choices that have got you to where you are. And the best choice that you can make here is to enlist the help of a collaborative partner.
Ensure that you have a financial advisor on board who takes the time to get to know you and your goals, and tailor your investment portfolio with you in mind, front and center. Your investment strategy needs to be holistic as well as diversified. To be as successful as possible, your investment options need to be drawn together in a fairly complex plan.
Tax Efficient Investment Options
There is no point in adopting a multi-faceted investment strategy if you fail to take account of the tax implications of those investments. Therefore, I always recommend to my client that they seek the help of a CPA who can work with or complement the work done by your financial planner to help to minimize your taxes and choose the most tax-efficient investment options.
Taxes change all the time, and they are extremely complicated. A little oversight here and there can help to avoid costly tax bills. A bad or unguided financial decision can mean a tax bill can significantly eat into your gains, making your investment portfolio far less profitable than it should have been.
There are many tax efficient savings accounts – most notably retirement plans or health savings accounts that may be provided by your employer. Reducing your taxable income by maximizing pre-tax contributions to your IRA or 401k is a first step to protecting your money from the taxman. But again, don’t forget the finer details – these accounts may have more significant tax implications during retirement so it’s important to get the whole picture before you make any significant decisions.
In addition, health savings accounts are a great way to save for your future and reduce your tax bill, as they are triple-tax advantaged accounts. You can make pre-tax contributions, the investment grows tax-free, and withdrawing funds for qualified medical expenses is also tax-free. So for your money to work hardest for you, it’s absolutely essential that you are well equipped with the knowledge about all these investment options that are available to you, and how they fit into your overall financial picture.
Have an Expert Guide Your Investment Choices
There is a reason why there are careers dedicated to investment management and tax. They are complicated systems with lots of moving parts. So don’t try to go it alone; you may not make the most of your money and you may end up with larger tax bills than you really should. So I emphatically recommend enlisting the help of a tax professional with a financial planner to help you to manage your money.
Being a female lawyer or executive leaves little time and energy to devote to your finances. Not only that, but you have more potential than most to realize an extremely successful financial life. As a driven and ambitious career woman, often also juggling a family too, free up some of your most valuable possession – your time – by delegating to a team focused on your financial success. . Enlist the help of other professionals.
If you’d like to talk more about your investment options and how to achieve the goals that are most important to you, please don’t hesitate to get in touch.
