Money Musings

Money Musings

Stories, guidance, insights and information shared honestly from 17 years of professional experience across 47 states and 5 continents.

Jennifer Sahady - Money Expert & Personal Finance Educator - Companies - Schools - Individuals

By Jennifer Sahady

Someone once joked that I was a Walking Wikipedia of Money, others called me the Money Expert, others still 401k Lady. How does one earn these titles?

 

In a word, experience, and tons of it. In the last 17 years I’ve covered 47 states and 5 continents. In that time, I have heard and seen some crazy stuff. While some of my travels were for fun and filled with exhilarating adventures — most of my travel was for work. My role was a retirement consultant. I would explain personal finance and provide personal financial education to any of my company’s clients.

 

I was a road warrior — taking 4 to 6 flights a WEEK. Hopping from one state to the next and within those states being one of the few people invited into every silo in this country — one day in manufacturing in West Point, Georgia, the next day with bankers in Manhattan. I’d speak with the c-suite one day and then construction workers the next. In each conversation, I listened, I observed, and I absorbed. The conversations moved quickly from introductions into those little know details about people. Every day I’d speak to dozens of strangers who shared their most intimate stories of success and regret.

 

What does one do with this knowledge? Well for one, it has greatly impacted my life and my decisions for the better. The ability to learn from other people’s lives and not have to experience every success and pitfall personally has been a huge gift. And now, I’d like to share that gift, if you are ready to learn too…

 

“The ability to learn from other people’s lives and not have to experience every success and pitfall personally has been a huge gift. And I would like to share that gift.”

I didn’t expect to become an expert in personal financial education. In fact, that wasn’t even my main role. My job as an education consultant was to teach people about their retirement plans and help them get started. This sounds like an easy enough task until you remember the statistics that you’ve likely heard ‘the average American family lacks $1,000 for emergency savings’. Which means they also lack the ability to save for the long term too. Hearing hundreds of people echo the same wistful regret ‘I wish I could sign up for the retirement plan’ and really mean it inspired me to add financial literacy to my role.

 

For me, this was the perfect mix of business and education. Something that to this day, is a growing need in our country, and one I am happy to serve. Growing up with a 4th grade teacher as a mother gave me an inside understanding of the benefits and costs of choosing the life of a teacher – business education gave me a chance to achieve the benefits of helping others without the bureaucracy often found in education. 

 

Beyond this beautiful mix, the role also gave me a chance to explore the depths and the differences of the USA, taking me to 47 of the 50 states and to all corners within those states.

 

I worked at construction sites and power plants; at corporate offices and on manufacturing floors; in big cities and the heartland of our country.

What I learned will fill this blog, but starts with one simple fact – everyone deserves the right to enjoy the life they have in the present and to retire with dignity one day. No matter how great and many our differences are we have that and many other things in common. When we talk to each other one-on-one about what matters most we have a pretty great country filled with people who want what is best for their families.

I learned that people tended to learn about finances from their parents, from me or they learned about money the hard way. I’d love to be able to have fewer people learn the hard way, so I started my business to have a greater reach than I could just serving my company’s clients.

Finally, at least for today, I learned that life is a whole lot better and a whole lot easier when we help each other and that is exactly what I intend to do. To help you as I have been helped, to share with you what I have learned and to build the tomorrow we are all dreaming of today.

Women and Investing

The observations and studies behind the assertion that women are clever investors.

International Women’s Day is a day to recognize the work women have done to achieve equality. This is a timely opportunity to share with you a little-known secret that should be shouted from mountaintops – women are fantastic investors.

 

This secret may surprise you, especially if you have heard the typical women in investing presentations. I know, for years I was sent out to deliver the corporate view and statistics on female investors. This was challenging for me because the message never matched the amazing women, I have had the pleasure of knowing both personally and professionally.

 

Perhaps, you have made the same observation. The women around you save and invest and yet there is a persistent myth that women are not as good at investing as men. After all, men are so confident about investing; it would be easy to think that they are the better investors. This paradox reminds me of driving. Stereotypically, men are the more confident drivers; does that mean they are better drivers? Insurance rates do suggest that actuaries see a difference between men and women as drivers. The simple point being that confidence does not always equal truth. Men are great investors and women are too.

 

In this article I will share with you my personal experience and some amazing studies on the success of women as investors. Hopefully, these observations and studies inspire you to recognize the secret super powers women have as investors. If you need further inspiration, please let me know. I am here for you!

 

First, women are super savers.

In my conversations with women, where and how much to save was often the top priority. Women are eager to save and curious to determine the best accounts to match their many goals and priories. One heart-warming conversation I had recently focused on a woman who was balancing saving for her retirement with saving for her children’s education. She realized that she had the power to give her children both the gift of education and the gift of independent parents who will not need the financial support of their children later in life. She did this by saving aggressively in many different accounts.

·       Women save higher percentages of their pay.

Whether in savings accounts, college savings plans, or retirement plans women save a higher percent of their money than men. Studies from major financial services including Voya Financial, Fidelity Investments and Capital Group have shown women saving higher percentages of their pay than men.

 

Second, women shine when storm clouds roll in.

The market is not always as good as it is today. Inevitably, the market has wild swings as the market grows and corrects. This is daunting for all involved yet not all respond equally. In times of market volatility, women make fewer trades and are less likely to exit the market entirely. As one amazing woman I worked with put it ‘I just don’t look. My investments are long-term positions’.

·       Women successfully trade less frequently in times of market volatility.

Statistically, this mantra has proven successful. A 2020 Financial Times Article and a 2001 study out of University of California–Davis are just a few sources that show the staying power of women investors. These studies remind me of the fabulous quote from Eleanor Roosevelt ‘A woman is like a tea bag – you can’t tell how strong she is until you put her in hot water’.

 

Third, women are clever collaborators.

In my corporate meetings and one-on-one meetings there were always more women than men signing up to learn more, even when the company was predominately men. Ever eager to learn and grow these women seized the opportunity to learn more about their retirement plans and how to support their goals. We share information in our networks and communities. We are carnivorous readers.  

·       Women seek more information before making investment decisions.

A 2014 Vanguard study showed that women are more likely to look for more information and consult a professional. The best sign of intelligence is often knowing the limits of your knowledge and experience and seeking the wisdom of others.

 

In conclusion:

Having worked in finance for years I had the chance to know many intelligent investors of all genders. Men have many strengths in investing that often compliment the strengths of women. In my experience, investing like most other topics yields the best results when capitalizing on the strengths of all parties involved. The best investors are defined by their education and experience rather than their gender. If you want to increase your confidence as an investor, work with a professional who can provide the guidance and support you need to create your fabulous financial future.  

401(k) Withdrawals

5 questions you should ask before you take a withdrawal from your 401(k) from an expert who has helped hundreds of people with this decision.

For those of you how are curious and eager to learn from others, here are the 5 questions you should ask yourself before you take a 401(k) withdrawal.

 

1.)   Do you really need the money?

401(k) accounts are not like bank accounts where the balance you see is what you have available. The balance fluctuates with the market and could be worth less than what you saw when you requested the loan if there has been a downturn in the market. Also, most accounts are pre-tax and require the tax to be paid when withdrawn.

Another noteworthy consideration, unlike bank accounts, 401(k) accounts are designed to be used in retirement. Any other use will likely trigger early withdrawal penalties, those penalties plus the taxes owed may result in you receiving as little as .60 or .70 cents on the dollar withdrawn. You can avoid early withdrawal penalties by waiting to withdraw your money until after age 59 1/2.

2.)   How old are you?

As noted above, most 401(k) withdrawals by individuals under the age of 59 1/2 are subjected to a 10% withdrawal penalty in addition to any owed income taxes. But that isn’t the only reason you should consider your age before a withdrawal. The younger you are the greater the potential loss will be on a withdrawal due to years of lost potential growth on the money. For example, $1,000 withdrawn at 25 could have become nearly $15,000 with 40 years of growth, if the investment growth was just 7%. It’s an important question to ask yourself, “Am I willing to give up the potential for $15,000 for $1,000 today?”, especially knowing that a withdrawal of $1,000 after-taxes is likely less than $700. Of course, this example is for education purposes only, but it’s a realistic example.

 

3.)   Are you ready to pay more taxes later?

While some taxes are withheld at the time of the withdrawal, just like your income taxes this is just an approximation. When you file your annual taxes, it is likely you will owe more taxes on the withdrawal because that withdrawal is additional income and it will increase your income dollar for dollar. This is often an unexpected and inconvenient surprise. Make sure to set aside some of the withdrawal so you have money to pay these taxes later.

 

4.)   Do you need money now?

Withdrawals require signed paperwork and processing and usually take over 3 weeks. In some cases, paperwork will need a spousal signature and notarization which can add additional time. If you need money immediately, this is likely not a great option.

 

5.)   What if I don’t make it until 59 1/2?

Your money will go to your beneficiary who will be able to use that money, regardless of their age without early withdrawal penalties. In the case that you do pass before you can use your savings, this money is often a well-needed gift to your loved ones.

 

With all of these downsides to consider you may be wondering if there is ever a good reason to withdraw money early. That is a personal question, that only you can answer, but here are my thoughts. If there will be no tomorrow without money today and you have no other options, 401(k) withdrawals can be a life saver. That is why early withdrawals from a 401(k)-retirement account are an option. However, if you have other options, you’d likely want to investigate those first. Most of the people I’ve met who regretted a 401(k)-withdrawal felt regret because they made the choice before they were aware of the penalties, taxes, and timeline involved in the withdrawal. Having all of the facts can help you feel more confident in your decision, whatever you decide to do. 

+1