More Wealth for Women

Women’s wealth has been on the rise over the past 50 years. With more than one-third of the world’s wealth under our control, women have become a fierce economic force. 

If you’ve got your hand on the pulse of the financial world, you may have heard some economists and researchers talking more and more in the past few years about something called the Great Wealth Transfer. While it might sound like something that would happen in some distant, far-off future it’s actually happening right now and it’s important to understand exactly what that means for you and women everywhere. 

What is the Great Wealth Transfer?

The Great Wealth Transfer is exactly what it sounds like: a large transfer of wealth from one generation to another. Economists have predicted that by 2030 the baby boomer generation (most of our parents or grandparents) will have passed nearly all of their wealth and assets on to the next generation. These baby boomers, who grew up in one of the most prosperous eras in American history following the economic upturn after WWII, controlled  70% of all disposable income in 2015 and have continued to acquire real estate and economic assets since then.

When you add all that up, it means that an estimated $30 trillion dollars worth of assets is set to land in the hands of new beneficiaries in the coming years. 

While you likely won’t be inheriting all $30 trillion dollars, you may be coming into some money -- and maybe real estate -- you weren’t expecting. In fact many women will. According to projections, women are expected to inherit a huge chunk of that $30 trillion -- can you say, Jeff Bezos who?

Beyond inheritance, we are living in a time where women are creating their own wealth, and wealth for others. As of 2019: (source)

• Nearly 13 million businesses are owned by women in the United States, employing 9.4 million people, and generating $1.9 trillion in sales as of 2019.
• 6.4 million firms, and 50% of all women owned businesses, are majority-owned by women of color in the U.S.
• One in five firms with revenue of $1 million or more is woman-owned.

While some women might be thrilled for a huge lump sum of cash dropped into their bank or inheriting a property in the suburbs, others might get a sinking feeling in their chest thinking of the responsibility of how to manage these assets. That’s totally natural because knowing how to manage your money well is a skill that many of us weren’t taught from an early age. So, it’s no surprise that as the playing field becomes more level and women are making more money that many are seeking guidance to manage their wealth.

What do you do when you come into money?

As a money expert, here’s what you need to know in order to prepare yourself for an unexpected increase in your net worth, whether it be from an inheritance or an increase in income: 

   1. Educate yourself

   If you know you’re going to be coming into more money, it’s important that you educate yourself about what that means for you. You want to make sure that you understand your current financial situation so that you can better understand how more money will change that. This doesn’t mean you have to sit down and crunch numbers all day. It can be as easy as figuring out what your money personality is, what your current retirement plan looks like, determining your monthly cash flow, and getting a general idea of what your net worth is. That way you know what to do and how you’ll react when your assets increase. 

And if you’re inheriting assets, you also want to figure out what kinds of assets might be coming your way. Maybe your parents have a beach house in the Outer Banks or a dusty stock portfolio that they’ve been sitting on for a long time. You don’t want to be caught off guard if those assets suddenly end up in your care. So, taking some spare time to figure out property taxes for multiple properties and how to manage a stock portfolio is in your best interest if you know you’ll be inheriting some assets you’ve never dealt with before.

   2. Call in some reinforcements

    Just because you’re a strong independent woman doesn’t mean you have to do it alone. If you don’t know the first thing about handling assets, don’t be afraid to call in some reinforcements. Talking to a financial advisor or planner is a perfect way to fill in the gaps in your financial knowledge so you can make the most of your money. Because if you’re going from managing household expenses or budgeting for the next grocery run to trying to handle thousands of dollars or real estate holdings, it’s going to feel overwhelming. Enlisting an expert who can help you navigate through various areas of financial planning and taxes can be the key to ensuring you’re making healthy financial decisions that support you and the lifestyle you want to live. 

Even if you’re someone who does think that they are pretty financially savvy, it’s still good to get some advice or a second opinion on how to plan for the future. 

   3. Explore your goals and write them down

   What do you want for your life and your future? We often like to live in the moment and not think too much about what’s happening beyond 2 months from now but the reality is planning ahead and setting goals helps us to make our dreams a reality. Think about what you want to accomplish in the next 5 years and then reverse engineering to break down your long-term vision into smaller, monthly, actionable steps. That way you can figure out what it is you want to do with your money in the long-term.

More money is landing in the hands of women here, ladies, and it’s your time to reap the financial benefits. When you take steps towards getting educated, seeking financial advice, and figuring out your own goals, you unlock a whole new world of financial possibilities. 

Sources:

Lifestyle Advice: Women and the Great Wealth Transfer - Investopedia.com

Women and the Great Wealth Transfer - US Bank

Financial Advice for Women: How to Make the Most of Your Money - US Bank

The Greatest Wealth Transfer in History: What's Happening and What Are the Implications - Forbes