Questions about Financial Advisors

I’m a big believer in working with financial advisors. But I’ve noticed that most women have a lot of questions about working with professionals, and don’t always know how to find the answers.

Here are some of the most frequently asked questions I get*:

Q. What if I inherited financial professionals from my family and don’t want to continue working with them?

A. If you don’t like their personality, values or investment style, find someone else. Remember, it’s your money now and you need to do what is right for you. You may find it more difficult to dismiss advisors who are old family friends but, if you tell them honestly that you want to choose your own advisor, most likely they will wish you well.

Q. Do I have to sign a contract with my financial advisor? I’m afraid of getting myself into something I can’t easily get out of.

A. You will have to sign a contract with any investment advisor or brokerage firm to do business with them. The inviolable rule, of course, is never to sign any document you do not thor­oughly understand. Always take your time and if any point is unclear, ask questions. For extra protection, you should review the contract with a knowledgeable friend or attorney before signing it.

Q. Every time my advisor calls suggesting that I buy something, I think to myself does she really believe this is a good investment or is she just after a commission?

A. If you feel unsure about the motives of an advisor working on commission, you need to ask yourself: Do I generally suspect people are trying to take advantage of me, or is there something about this particular advisor that makes me uneasy? If you tend to worry that people are more interested in your money than in your welfare, use this as an opportunity to examine when those feelings are justified and when they aren’t. If you think the problem is with the advisor, discuss your concerns with that person, and then review the reasons for your concerns and the advisor’s responses with a trusted friend or professional. And, of course, you can switch to a fee-only financial planner or a wrap account that’s inclusive of all fees.

Q. What if my advisor pressures me to buy something?

A. If someone tells you, “Buy this now—the price will never be this low again,” or, “This stock will hit 100 in six months,” your antennae should go up. Never buckle under pressure. Think seriously about changing advisors. As one money manager put it, “There’s always another stock and there’s always another day.”

Q. The value of my portfolio is going down instead of up, and I think my broker is at fault. Is there any chance I can recover my losses?

A. Yes. If your broker or other investment advisors have recommended unsuitable investments and failed to explain their risks, churned your account, or bought securities without your permission, you can file a claim against them. Your advisor is generally required to settle the dispute by arbitration. I suggest you discuss your case with a lawyer or other professionals who represent clients in disputes with brokers.

Q. What if I want to change advisors?

A. Before you walk away, give your current advisor a chance to respond to your complaints. Sometimes just hearing the other person’s explanation can clear the air and preserve a working relationship. If, after you’ve talked you still want to take your business elsewhere, find a new advisor who will arrange to transfer your investments for you. Then tell your advisor you want to close your account. Switching brokers should be a simple process, especially if all your holdings are commonly traded stocks, bonds, and mutual funds that are easily moved from one brokerage firm to another. Simply fill out a form listing all the investments you held at the old brokerage firm and give it to the new broker who will take care of everything else. If you’re changing money managers, the process can be slightly more complicated. Often money managers will give you a pro-rated refund and retain a fee covering 30 days.

For more information, check out my booklet: Finding A Financial Advisor that You can Trust

 

Want More Money? Try Asking!

“You don’t get what you deserve. You get what you demand.”
–Dianne Bennett, a 7th grade dropout who became six-figure woman.

More than half of the 1000 women polled by Pink Magazine and KPMG in 2006 felt they are not fairly compensated for their work. http://www.pink.com But here’s my question. How many of them actually asked for more money? My guess, not many.

A salary offer is not a foregone conclusion. Ninety percent of Human Resource professionals polled expect salaries to be negotiated. Overcoming underearning requires you take a stand, ask for what you want, negotiate until you reach a mutually satisfactory agreement, or walk away where appropriate.

Here’s some suggestions for negotiating effectively.

• Know what you want. Research the going rates in your field. Ask the high end of the spectrum. You can always negotiate down, but never up.
• “No” means “not now.”
• Negotiate salary only after a job offer. Don’t be the first to bring it up. “Make them fall in love with you before talking money.” (Wall Street Journal, 10/29/04)
• Negotiate more than money: early salary review, signing bonus, relocation costs, profit sharing, flexible schedule, paid time off, benefits, perks, educational programs, expense account, club memberships, bigger office, laptop, cell phone, job title.
• Act confident (even if you don’t feel it). Communicate with authority. Perceived confidence has a big impact.
• Request 24 to 72 hours to think over the offer.
• Always start negotiations on a positive note. For example, thank the employer for the opportunity and make a counter offer.
• If someone acts put off by a reasonable counter offer, consider it a red flag. Perhaps the employer doesn’t value what you bring to the table.
• The best time to negotiate, or renegotiate, is when you have other offers.
• Get the offer in writing.
• Above all, focus on relationship building. “It’s always harder for someone to say ‘no’ if they know you and like you.” (www.WallStreetJournal.com)
• Practice negotiating with a friend or in the mirror. Have points prepared, build a case, around your value and what you bring to the company.

 

5 Tips for Getting Paid What You Really Deserve

I’ve learned a lot from interviewing high earners. But perhaps the most significant lesson was this:

Even though these women were not driven by money, they demanded to be well compensated because-and here’s the Big Lesson- they felt they were worth it.

The problem: women, in general, devalue themselves. These women, however, taught me specific ways to strengthen self esteem. Here are 5 tips for pumping up your self-worth along with your net worth.

1. Think Big, Then Think Even Bigger - What most of us do is unwittingly limit our earnings by lowering our expectations. Especially women. The idea is to think in terms of what you are worth, not just what you assume the market will bear.
2. Do Your Homework - One of the worst negotiating mistakes women make is picking a number out of the air that’s way too low. The smarter ones find out their market value by researching the going rates, then ask for more than is offered so they’ll have room to maneuver.
3. Take the Initiative - Have tangible evidence of what you bring to the table. Maybe you saved your company x amount of dollars or had an idea that generated so many sales. Every time you accept more responsibility, successfully complete a challenge or create positive changes, document it. Keeping records is an effective means of demonstrating your value to an organization.
4. Daily Affirmations -Act As If - Affirmations are positive statements expressed as if they’ve already happened. For example: “I have the confidence to ask for what I want.” “I deserve more money in my life.” Write them down. Post them in full view. Say them out loud as often as possible. When you act as if you’re worth a lot, you’ll eventually convince yourself as well as others.
5. Challenge yourself in other areas - A stretch in any area of life has a ripple effect in other areas as well. If you can’t quite get yourself to volunteer for that tough assignment or ask for a raise, try signing up for an art class or running a marathon. Anything that puts you out of your comfort zone builds confidence and self-worth.

By practicing these tips, you’ll begin to notice a shift in how you feel about yourself. Making more money becomes not something you should do, but something you have to do-because you know in your heart you’re worth it.

If you have other suggestions, I’d love to hear them.

 

The Secret of SHE

I just got an enthusiastic email from a client: “I feel as if I have discovered from you a magic secret of life that nobody else on the planet knows about.”

OK, she may be exaggerating…a bit. But in truth, what she learned IS one of the most powerful, and best kept secret among Successful High Earners (SHEs). It’s also the biggest show-stopper for underearners.

The secret– so utterly simple, yet so profoundly difficult—goes like this: “When you commit to a goal, you don’t have to know how you’ll achieve it. You just need to do what comes next.”

I learned this from my interviews with SHEs. To paraphrase a famous quote, they’d set a goal, jump off the cliff, and build wings on the way down. Conversely, Underearners think they must have a full-blown plan all figured out before they’ll even allow themselves to consider taking a leap.

Here’s a typical conversation (from an actual email):

Woman: “When you say we ‘don’t have to figure it all out,’ does that mean I don’t have to figure out exactly how I am going to make the money I want to make?”

Me: “Yep. “

Woman: “Hmmm, that goes against my business school training that taught you have to make a business plan, a marketing plan to achieve your revenue goals.”

She’s right. The secret runs counter to society’s teachings. But the most successful high earners taught me otherwise.

The lesson I learned from them: The HOW is NOT important. I repeat, the HOW is NOT important. What matters most is your degree of commitment.

Here’s how the secret works. Commitments are like magnets. They draw opportunities to you, often disguised as coincidences. You turn on the news, step on the bus, bump into a friend, hear the phone ring, and from absolutely nowhere, someone or something shows up that’s just what you need.

(Warning: If synchronicities aren’t forthcoming, revisit you commitment. There’s a direct correlation between fierceness of commitment and frequency of coincidences.)

That’s how the secret works. Once you commit to a goal and get out of your own way, it’s mind boggling what can happen. Try it, and tell me your results.

 

Good News about Women and Power…It’s Fun!

You can’t imagine how much I’m learning from my interviews with women making millions. These conversations have been about far more than money.

These women are showing me a new, distinctly feminine paradigm of power.

These women are creating wealth and wielding clout on their own terms, in a decidedly womanly way.

These women have figured out how to ‘play with the big boys’, make the big bucks, all without pursuing the top-down, male-model of control, domination, and self aggrandizement.

These feminine pioneers of power are achieving extraordinary success, based on qualities that come naturally to women—partnering, nurturing, collaborating, empowering, helping others—and working toward goals that genuinely inspire them. Instead of playing like a man, they realized that they could change the rules to correspond to their values.

The late NY Congresswoman Bella Abzug, once said, “In the twenty-first century, women will change the nature of power rather than power changing the nature of women.” That’s precisely what’s happening.

“Men see power as an end. Power exists to have power”, explained Kaye Fittes, in an article on internet site Nightengale.com. “For women, power is a means to an end. To embrace power, women must see what good can come out of it.”

In other words, while men covet the cachet of the corner office, women crave the chance to make a difference.

That distinction is critical. The women I interviewed recognized that making millions was not an end, but a means, a tool for creating the life they wanted to live, becoming all they were meant to be, and making a difference in areas they deeply cared about. For them, the goal wasn’t to rival Bill Gates, but to build their own creative muscles and, in turn, benefit others, in the most meaningful, authentic, and lucrative way they can.

During our interview, Cynthia Good, co- founder of Pink Magazine, herself a woman making millions, beautifully described this phenomenon. “I have a visual of business women as race horses lined up behind the gates, ready to take off, and not just take off, but do it on their own terms by being fully themselves. That is the big difference, and that is why they want to take off, because for the first time, it’s fun because we can be who we are.”

Are you having fun yet???

 

Seven Things Smart Women Know About Money

1. Smart women think beyond being a wage earner and dollar watcher to become a wealth builder. Wealth has nothing to do with what you make. Wealth comes from what you do with what you have. You create wealth by investing in assets that will grow faster than inflation and taxes take it away.

2. Smart women don’t wait until they have a lot of money to begin. Wealth begins with as little as $25 to $50 a month. (If you simply put $2.00 aside every day, you’d have saved more than $60 at the end of each month). Through the “magic” of compounding, small sums grow into a sizable portfolio.

3. Smart women don’t wait for a crisis to get started. A crisis is the worst time to start anything. You can’t think straight. You tend to make terrible decisions, sink into paralysis, and leave yourself wide open to financial losses. Instead, make a conscious choice to become smart with money.

4. Smart women know with total conviction they must do it themselves. Dispelling the myth that “someday my prince will come” is the most important financial decision you will ever make. Prince Charming need not be a man, or even a person. Our “prince” could be an insurance settlement or the lottery, anything we fantasize will save us financially.

5 Smart women talk to others about money. You can learn so much from another’s mistakes and draw inspiration from their successes. You can use others as sounding boards, role models, and sources of encouragement, advice, and information. Why not start a financial book club or discussion group?

6. Smart women deal with their unconscious attitudes to avoid sabotaging success. If you find yourself fogging up or spacing out, if you can’t seem to apply the information you learn, or resist learning it in the first place, then chances are, psychological factors are impeding your progress. Once you identify your internal blocks, success can occur spontaneously, almost effortlessly.

7. Smart women understand risk makes her wealthy. Risk in the market refers to volatility and volatility refers to price swings. The more a stock moves up and down, the riskier it is. But those fluctuations only matter when you sell your holdings. The longer your time horizon, the less important those ups and downs are. If you’ve got say 10 years, those daily fluctuations are irrelevant.

 

For the Love of Money… and Self

In honor of Valentines Day, I was inspired to come clean in my February newsletter…which also allowed me to climb onto my favorite soap box.

How did I come clean, you ask? I admitted that (gasp!) I love money. Yep, it’s true…I love money…what’s more, I wish everyone loved money.

I know exactly what you’re thinking. How tacky, right? Money is, after all, the root of all evil.

Here’s where I got on my soap box and shouted to the world: Get a grip, folks. That very belief—money is bad—is exactly what keeps so many of you in a financial bind.

“The truth is,“ I wrote, “money, itself, is not bad. Nor is it good. It’s just a bunch of paper and metal. Money can’t shoot a gun or bandage a wound. Money can’t do squat. Only people can.

“I have come to believe that it’s not the love of money that’s the problem. It’s the lack of self-love that leads to trouble.

“Evil stems from fear, insecurity, and self hatred. Prosperity is a by-product of self love, self worth, self respect…loving yourself enough to give yourself what you desire, knowing money is an integral part of that equation.”

I saw it firsthand in my interviews with successful women. Their financial success stemmed directly from their love of self…and the value they placed on what they brought to the table. Furthermore, they created wealth by taking care of their money so their money would take care of them. Now, that’s (self) love!!

The very day my newsletter came out, I was flooded with responses. I’ve never gotten such a strong reaction before. What surprised me most–everyone agreed.

For example, one woman wrote:

“I LOVE MONEY TOO! I agree with what you say about money because it really is just a means to an end. I believe that I read in one of the lectures by the late Emmett Fox that it was not money in and of itself that was the root of evil but more that the root of the evil was that people put their love of money above all else; therein lies the dilemma “

Another responded:

“I loved myself this month by participating in an online seminar to find out how the changes to my 401K would affect me and how to navigate around the Fidelity Investments website. [And] I am taking care of me by taking responsibility for my future which involves being able to retire some day. “

I want to hear from you too. Do you think I’m totally tacky? Or am I touting truth? To read the whole newsletter: http://www.barbarastanny.com/current-newsletter.html

 

A Personal Epiphany

Have you ever felt stuck? Who hasn’t! I see it with everyone I coach. That’s usually what brought them to me in the first place. They’re sailing through life when suddenly, inexplicably, they get stopped in their tracks, as if they collided with an invisible barrier. They’re never quite sure exactly what happened, or if it would ever end.

These stuck points vary in intensity and duration. Sometimes they only last a few days. Other times you’re down for the count, convinced your life has come to a screeching halt, your career is finished, all chance at happiness gone forever. No matter how long they last, these can be very dark, dreaded periods.

Like everyone else, I used to hate being stuck. Not any more. I can’t say stuck points are fun. But at least now I realize they have a purpose.

I want to share with you an epiphany I had that changed my whole relationship to the stuck point.

I was in the gym, working out with a trainer, about to do a chest press with no added weight. I lay flat on my back, grabbed the bar, pushed it high above my body, lowered it to just above my chest, then lifted it back up, repeating the exercise 12 times. No problem. It was easy. Then my trainer added 5 pound weights to each end of the bar. I felt the difference immediately. By the 2nd repetition, my arms were quivering. The third time I lowered the bar to my chest, it wouldn’t budge. I strained. I struggled. I was clearly stuck. My ego felt deflated. My trainer saw it differently.

“That’s how you build muscles,” he explained, “by getting past the stuck point.”

Sure enough, in the next couple of weeks, I eventually could do 12 consecutive reps without flinching. But my trainer didn’t let me rest in my glory. Instead, he added more weight. And sure enough, I was instantly at a new stuck point.

That’s the moment I had my epiphany. The weights became an obvious metaphor for life. Getting past my previous Stuck Points was precisely how I have grown physically, mentally and emotionally stronger. It is how I have built my confidence muscles, experienced higher levels of achievement, and discovered new possibilities I would never have predicted.

The problem is, no one ever talks about their stuck points, nor is much written about them. So last year I asked 61 women how they got through their stuck points, and put their responses into a book: Breaking Through: Getting Past the Stuck Points in Your Life. I learned so much from them.

I’d love to hear from you too. What have you done that has helped you get through those dreaded stuck points?

 

It’s not about money…

A lot of women in my workshops tell me they feel guilty about wanting to make more money, as if a profit motive were something shameful. I understand their conflict. I used to struggle with it myself. But that was before I wrote my book, Secrets of Six-figure Women.

I always asked every woman I interviewed this question: Are you doing what you’re doing for the money? With rare exceptions, every one swore that it wasn’t the money that motivated her success. It was what the money represented, something much deeper, more personal, and very individual. These women were driven more by what they hoped to achieve rather than what they aspired to earn. Each one had a vision for her life based on cherished values like recognition, independence, security, or achievement. These intangible goals rather than hard cash provided the fuel for their financial success.

However, there was an important distinction that made a big impact on me. Granted, these women weren’t in it for the money. But at the same time—this is the key—they darn well wanted to be well compensated because they felt they were worth it. Their financial success didn’t come from the love of money, but love of self…and the value they placed on what they offered.

I have come to see that achieving self love, self worth, self respect are the real secrets to financial success, much more so than working longer hours or seeking multiple streams of income. Would you agree?

 

How Do You Know When You’re Rich?

Quick, answer this question with the first number that comes to mind:

How much money do you think you need to feel rich?

Of course, you may argue, there’s more to being rich than having money—there’s love, health, freedom, etc. All true. But for the purpose of this blog, and in the spirit of research, let’s stick with the original question that recently appeared in The Wall Street Journal: How much money does it take to be rich?

According to the article—which was excerpted from Robert Frank’s blog, The Wealth Report—no one can seem to agree about the amount of money that makes you rich.

According to the Federal Reserve, you’re in the top 5% of Americans if you have a networth of $1.4 million. But when Spectrem Group asked affluent people that question, only 22% said $1 million makes you rich. The majority (45%) said it took at least $5 million to qualify. A quarter of the respondents swore that you need a minimum of $25 million. A few (8%) even put the winning number at $100 million. Still, other studies have shown that people “always give a number that is twice their current networth or income. Those with $100,000 in income say $200,000, while those worth $5 million say $10 million.”

I thought about what I’d say, and realized the term “rich” is so relative, it’d be impossible to come up with a universally accepted number. The best definition I’ve ever seen for “rich” was the one I used in my first book, Prince Charming Isn’t Coming. I forget who said it, but it goes like this: “rich is when you work because you want to, not because you have to.”

That makes a lot of sense to me. Anyone have a better definition than that??