Own Your Financial Freedom

Andrea Kennedy

Description

It is never too early to get a financial reality check to ensure long term financial security. Practical, savvy, and wide-ranging, Own Your Financial Freedom will inform women of important financial constructs prior to marriage and educate women on the 'what-if' of a divorce proceeding and post-divorce money management. By making effective money decisions at every stage of your life, if a divorce is ever inevitable, you will feel far more in control and aware of what you are entitled to, making divorce a straightforward process and not a lengthy battle. Packed with essential advice from professionals and financial gurus, Own Your Financial Freedom will help anyone navigate through the emotionally, economically and legally challenging divorce procedure. From understanding entitlements, coming to a settlement and to planning long-term investments, this book is an essential guide to achieving financial freedom.

Sujets

• Economie gestion
• Personal finance
• Finance

Informations

• Publié par: Marshall Cavendish International
• Date de parution: 15 novembre 2013
• Nombre de lectures: 0
• EAN13: 9789814516853
• Langue: English

Extrait

OWN YOUR FINANCIAL FREEDOM

2014 Marshall Cavendish International (Asia) Private Limited Text 2014 Andrea Kennedy
Published by Marshall Cavendish Business An imprint of Marshall Cavendish International 1 New Industrial Road, Singapore 536196
All rights reserved
No part of this publication may be reproduced, stored in a retrieval system or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the copyright owner.
Request for permission should be addressed to the Publisher, Marshall Cavendish International (Asia) Private Limited, 1 New Industrial Road, Singapore 536196. Tel: [phone], Fax: [phone]. E-mail: [e-mail] . Website: www.marshallcavendish.com/genref
The publisher makes no representation or warranties with respect to the contents of this book, and specifically disclaims any implied warranties or merchantability or fitness for any particular purpose, and shall in no event be liable for any loss of profit or any other commercial damage, including but not limited to special, incidental, consequential, or other damages.
Other Marshall Cavendish Offices: Marshall Cavendish Corporation. 99 White Plains Road, Tarrytown NY 10591-9001, USA Marshall Cavendish International (Thailand) Co Ltd. 253 Asoke, 12th Flr, Sukhumvit 21 Road, Klongtoey Nua, Wattana, Bangkok 10110, Thailand Marshall Cavendish (Malaysia) Sdn Bhd, Times Subang, Lot 46, Subang Hi-Tech Industrial Park, Batu Tiga, 40000 Shah Alam, Selangor Darul Ehsan, Malaysia.
Marshall Cavendish is a trademark of Times Publishing Limited
National Library Board Singapore Cataloguing in Publication Data Kennedy, Andrea, Own your financial freedom : money, women, marriage and divorce / Andrea Kennedy. - Singapore: Marshall Cavendish Editions, [2013] pages cm eISBN : 978 981 4516 85 3
1. Women - Finance, Personal. 2. Divorced women - Finance, Personal. 3. Financial security. 3. Investments. I. Title.
HG179 332.024008653-dc23 OCN 861855401
Printed by Fabulous Printers Pte Ltd.
DEDICATION
I would like to dedicate this book to my mother, my sister and my daughter.
ACKNOWLEDGEMENTS
I would like to acknowledge the following people for their patience, support and feedback in the writing of this book: J.R. Wu, Shelly Maneth, Jain R. Brown, Philippa Marriott, Leilani Ponzi, Dr. Susan Mistler, Janice Ngeow LLB, Mitchell Presnick, Dane Chamorro, Leigh Talmage Perez, Alexandra Morse, K. Fun Loh, Elaine Fong and David Steinglass.
I would also like to acknowledge my two children Stefan and Elena Chamorro for their patience and understanding while I wrote.
Finally, I would like to thank my tireless and extremely patient editor Katharine Carpenter and all the staff at Marshall Cavendish who have made this book possible.
CONTENTS
Introduction It s Your Money, Honey!
ENTITLEMENT
Chapter 1
From Hopelessness to Healthy Entitlement
Chapter 2
Dos and Don ts in the Lead-up to Divorce
OWNERSHIP
Chapter 3
The Art of Conscious Spending
Chapter 4
Talking to Family about Money
Chapter 5
Money Disorders = Self-Sabotage
EMPOWERMENT
Chapter 6
Time, Goal Setting and Retirement Planning
Chapter 7
Assets
Chapter 8
The Right Habits and DIY Asset Allocation
Chapter 9
Dipping Your Toe In-Time to Go Shopping!
Chapter 10
How to Use Financial Advisers
Chapter 11
Investing in Yourself
Appendix 1 Divorce-The Legal Procedure
Appendix 2 A Word on Risk and Return
Appendix 3 Using a Financial Calculator
Resources
Glossary
Bibliography
About the Author
INTRODUCTION
IT S YOUR MONEY, HONEY!
Back in late March 2008, a week or so after the investment bank Bear Stearns had collapsed, I had lunch in Hong Kong with one of the region s then leading pundits. An economist by training, he holds a PhD and has been in this region for decades. He is widely quoted by the local media and sought after by private banking institutions for his insights.
Now that Bear Stearns was ostensibly bankrupt, I asked him, What happens next? I asked this question because the markets were still acting erratic to say the least. Rents in Hong Kong had gone up 50 to 100% in a year but property prices were now plummeting. He smiled and reassured me with these exact words, There is nothing to worry about. The markets have cleared. Now is as good a time as any to invest.
I found this comment ironic, given that nine months prior I was told to consider selling all but my most reliable investments. What prompted me to sell was a breakfast conversation with a woman who was a long-time individual investor. Out of nowhere she asked me how much I had invested in the markets. I told her and she said, The stock market will go down by 50% so you might want to take some money off the table. On the date of our conversation, the Dow Jones Industrial Average, the major US stock market index, was at 13,907.
I asked her why she was so concerned and she replied that she felt there had been too much easy money, and the markets had just run too far and too fast. She also added, Honestly, I went to a home showing last week and I was sitting there with the local waitress from my diner, who was looking to buy the same home as me. I discreetly asked her how she could afford such an expensive property. This waitress told me the banks were givin loans to everyone .
Well, that was the nail in the coffin, so to speak. This woman left the showing, went home and began rearranging her stock, bond and cash positions over the next several months. As someone who had invested in financial and property markets for 40 years, she intuitively knew something was very wrong. She had no idea of the degree of financial chaos that was about to ensue but she suspected a banking crisis of some sort was not far off.
At the market bottom in 2008, the Dow Jones Industrial Average was at 6,626 (a crash of 50% as predicted!). By the end of 2008, her broker called her to let her know that she was only down 7%. The rest of the known world was in a panic and had lost somewhere in the range of 30 to 70% of their investments.
So, you are probably wondering who this woman is. You may be thinking that she worked on Wall Street or for a hedge fund. Or maybe she has some black belt in finance or some high-profile academic background that qualified her to know how fast and how hard the markets might fall. Or maybe she is a mathematical savant? Wrong, wrong, wrong, wrong and wrong.
She is my mother. My mother is a high-school graduate who was so afraid of maths that she had to be taught the subject by my father at age 22 (Chicago public schools for you). She then went on to teach herself more about financial markets, tax and accounting issues than anyone else I have ever met in my life.
My mother was named one of Chicago s top independent investors in the 1980s by Merrill Lynch. She has stared down market crashes, referring to them as a sale at Saks Fifth Avenue , and bought when others were fearful. There has been much trial and error over the years, but my mother stuck to what worked for her, learnt from her mistakes and created a small fortune for their retirement.
I feel very fortunate to have been raised in this home as I was lucky to have a simple idea conveyed to me from a very young age, namely It s Your Money, Honey . I was taught I didn t need a PhD or an MBA to invest my own money.
In our household, we unabashedly discussed managing and investing money. My father was an entrepreneur and my mother was the bookkeeper, billing manager, accountant and investment adviser. I realise that my life experience with money, particularly as a woman, is different to that of many people. And having the chance to help people develop the money management and investment skills my parents taught me is what brought me to practise financial planning.
I have encountered a variety of clients over the years with a myriad of different financial concerns. Some of these situations can be resolved through better planning and budgeting and others still through a more mature perspective on how to invest for the long term.
However, as I crossed the Rubicon into my forties, I realised that a growing number of clients were clearly dealing with more than the usual financial difficulties that needed a bit of tinkering to set right. Increasingly, clients faced some significant life change such as divorce, job loss or death of a life partner. So not only were they having to make decisions that could affect their immediate and long-term financial security, they were having to do so under a chronic cloud of emotional duress.
Divorcees struggle uniquely with money management issues before, during and after divorce. In fact, I ve come to the conclusion that so much energy is spent on the emotions of the divorce (the grieving, the anger and the drama of dealing with ex-husbands, etc.) that finances go on the back burner, often for years. And yet even when finances are front and centre, the reality is that many people have never had the opportunity to develop the habits of successful money managers and individual investors.
Therefore, I have laid out a three-phase approach to guide anyone who is suddenly required to take over all aspects of money management from budgeting to cash flow management to long-term investing. These phases are Entitlement, Ownership and Empowerment. Each phase will guide you through a different stage of money management and touch on the psychological, legal and financial aspects of creating long-term financial stability.
Within these phases, I will allude to the Golden Rules of creating long-term financial stability. These Golden Rules are listed below.

M ONEY M ANAGEMENT R ULES FOR L ONG-TERM F INANCIAL S TABILITY
Golden Rule One: Conquer the Zoo in You-You must be able to control your own mind to be able to control your own money.
Golden Rule Two: Savings Nirvana-You must get to a place of c