I’m a Financial Planning Expert: 5 Tips I Give To My Female Millionaire Clients
Written by
Gabrielle Olya
Edited by
Levi Leidy
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You might not be a millionaire — yet — but many of the financial planning strategies that apply to the wealthy also apply to those who haven’t quite hit the seven-figure mark. You might also have the goal of building your wealth, maintaining your wealth or achieving financial freedom — all common goals of millionaire women.
In this “Financially Savvy Female” column, we’re chatting with Katie Randall, a financial advisor at Prime Capital Investment Advisors who collaborates with high-earning, millionaire women to help them achieve their financial goals. Here are Randall’s top tips for her female millionaire clients.
Automate Contributions and Pay Yourself First
Whether you’re in a phase of maintaining your wealth or growing your wealth, Randall says the first thing you should do is to create a “completely systematized investing experience.” When Randall works with her clients, she funnels their income streams into their portfolios automatically and cuts them a “lifestyle paycheck” from their investment earnings every month, which is what they live off of.
“Then, all the residuals stay in the portfolio to be invested proactively,” she said. “It’s so different than, ‘Oh, I have $2,000 leftover so I’ll move it over to my investment account later.’ It creates such a higher success rate with building wealth. And women love this because it’s out of sight, out of mind.”
In addition to ensuring that your investments grow over time, living off a portion of your investments rather than your income helps prepare you for retirement.
“What’s beautiful about that system is that when I’m following someone through their lifetime and they go to retire, they’re already used to getting paid from their investments instead of their business or their employer or their real estate or whatever,” Randall said. “So it’s not super emotional to stop getting a paycheck, because they’ve already been getting a paycheck from their investments.”
Invest Consistently, No Matter What the Market Is Doing
When Randall works with high-net-worth women, she ensures that they are “always investing proactively, rain or shine,” she said. “And women totally get that. Women have amazing instincts with investing, more than they even give themselves credit for. So they tend to really grasp that concept and run with it.”
Make Sure Everyone Who Manages Your Finances Is Working Collectively
Whether you have a financial advisor or not, it’s important that everyone who manages your finances — including accountants, insurance brokers, estate planning attorneys, etc. — is functioning as a unit. As an advisor, Randall oversees this collaboration.
“I make a holistic financial plan that actually works for you,” she said. “It’s like, ‘Let me talk to your CPA for you. Let me talk to your estate planner for you. Let me make sure all your insurance is in alignment.’ Have a professional that’s willing to manage all of your relationships right alongside you.”
Have a Financial Plan That Isn’t Dependent on Anyone Else
Even if you are married, it’s important to have a financial plan that doesn’t rely on income or assets from anyone else.
“One of the biggest risks to any woman’s plan, especially if she’s divorced, widowed or single intentionally, is the risk that we’re on our own,” Randall said. “You need to think more about, do you have ample savings? Do you have disability insurance? Do you have a long-term care plan? Do you have an estate plan?
“Even if you are partnered, you’re probably going to outlive your husband in a hetero relationship, so it’s even more important to have a backstop for yourself,” she continued. “Men have less of a financial burden with some of their medical costs and women have more because if you’re in a hetero relationship, the wife is helping take care of the husband if he’s sick. Therefore, it’s helping shorten his hospital stays and his medical care costs because she’s there. Now if he passes away sooner — which happens to most people — or if they get divorced, which frankly, happens half of the time, then she doesn’t have that same backstop.”
These dynamics make planning for a future that is only reliant on yourself essential.
“We need to be more prepared,” Randall said. “We can’t really rely on somebody else to save us.”
Make a Plan for Giving Back
No matter how much you want or are able to give to charities or organizations of your choice, it’s important to have a plan for how you will do so.
“I’m finding that more women want to give now than give later — they’d rather make an impact now than make an impact later,” Randall said.
There are many strategies for charitable giving.
“You can get pretty high impact with your giving and really planning out a legacy if you open up a donor-advised fund, which gives you multiple different tax benefits,” Randall said. “I [also] really love the scholarship fund idea, and there are multiple ways to approach that. I’ve also seen women do giving circles, where they get together and they pool money, and then decide collectively what charity or charities to give that to.”
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