Changing the Financial Narrative for Women in 2017

January 4, 2017

DC Web Women - Lunch & Learn

Danielle Wedde

10 Key Strategies for Financial Success for Tech Professionals

“What’s keeping you from becoming rich? In most cases it is simply a lack of belief. In order to become rich, you must believe that you can do it, and you must take actions necessary to achieve your goals.” –Suze Orman

1. Upgrade your internal operating system: change your mindset, change your narrative

PURPOSE

“You can only become truly accomplished at something you love. Don’t make money your goal. Instead, pursue the things you love doing, and then do them so well that people can’t take their eyes off you.”–Maya Angelou

“Before you start feeling bad about yourself for your debt, this would be a good moment to remind yourself that money doesn’t exist - it’s just a system of value exchange. That’s it. Pure and simple. So, if you have debt, you’ve received value and you’ve not given the equivalent value back to the particular party in the exchange yet. That’s all it means. It doesn’t mean you’re a bad person. It doesn’t mean you’re a screwup. You simply have more value to give.” - Kate Northrup

“The more I value myself, the better my relationship with money becomes.” –Kate Northrup

Debunk myths of mindset: change your mindset, change your narrative

SELF WORTH

“Greatness requires that we own our worth, our power, our talent, and our truths. This was clear in my interviews with high earners. As one told me, ‘my millions are a reflection of my value, my mirror.’”–Barbara Stanny

• The rise of FinTech has caused true disruption in the global financial industry (U.S. financial sector is 7% of economy).

• Opportunities for startups and established financial institutions to challenge status quo and disrupt in four areas.

• Large banks are relying more heavily on technology for their products. Investing in new platforms while overcoming legacy systems (growing opportunities for tech professionals).

2. Consider the intersection of technology and finance

Source: SparkLabs

Last year, 42% of all adult women lacked financial security. Based on findings of

the U.S. Department of Labor, the financial situation of women did not

necessarily improve with age on average.

• Snowball approach in paying off debt.

• Transfer balances to 0% APR card (no fee transfers).

• Credit is not an asset. Reducing a fixed expense like a credit card is financially equivalent to passive income. Suppose you owe $5,000 on a credit card with a 2% of the balance monthly payment ($100 per month). In paying down the card, you will free up $1,200 per year in cash flow that would have went to payments (a 24% return on a $5,000 investment)!

• Average U.S. household debt: $130,922. Average U.S. credit card debt: $16,048.

3. Pay down debt

• In a Bank of America 2016 survey of young adults on financial habits, only 61%

of women said they had set aside financial savings. Of the 62 million wage and

salaried women (ages 21-64) working in the U.S., only 45% participated in a

retirement plan.

• Save over a year-long horizon and automate deductions. “Pay Yourself First” -when you never see the money you learn to live without it.

• Set up budget tools - technology can help! (e.g. Simple, YNAB).

• The maximum amount an employee can set aside for retirement is $18,000 —$24,000 if you are 50 or older, due to the “catch-up” rules. Explore 401K match –tax penalties for removing money early.

• A maximum of $14,000 may be placed in a 529 college savings plan for each child or grandchild without incurring gift taxes. Each spouse (if married) can give $14,000 per child (money not subject to federal tax and typically not subject to state tax when used for expenses like tuition, fees, books and room and board).

4. Strategize to save for the year and retirement

Notes: The above example is for illustrative purposes only and not indicative of any

investment. Account value assumes a 7% annual return.

Source: JP Morgan Asset Management.

5. Realize that time is an asset...

Microinvesting accounts and startups are emerging to make saving and investing money accessible for everyone. This doesn’t require a ton of money or discipline - just start by saving a small amount of money regularly. Automated deductions can be set up, and you can manage your portfolio with your smart phone.

6. Try microinvesting services

7. Learn the lingo and go to the gurus

8. Invest in stocks (or ETFs)● Open an online brokerage account (a range of them exist for beginners to experienced investors).

● Consider purchasing high dividend stocks. A portfolio of high dividend stock will all you to generate regular passive income from dividends and capital gains. The dividends are much higher than bank investments plus there’s a potential for capital appreciation.

● Exchange-traded funds (ETFs) take mutual funds to the next level. ETFs offer lower operating costs than traditional open-end funds, flexible trading, greater transparency, and better tax efficiency in taxable accounts.

● Do your research. Buy what you understand. Invest for the long run.

• Angel Investor or VC• Bootstrapping (no external capital)• Bank loans• Crowdfunding• Alternative lenders (likely when owner can’t get

traditional loan - e.g. revenue based financing)• Government grants (specific industries and causes)• Difference between 501(c)(3) and other nonprofits -

organizing, giving, reporting

9. Finance your tech biz or nonprofit

• A large gap still persists for women at top firms and in financial professions. Last year, women made up only 17.9 percent of the directors of Fortune 1,000 companies. Less than 10% of all U.S. fund managers are women; women exclusively run about 2% of the industry’s assets and open-end funds. By contrast, men exclusively run about 74% of the industry’s assets and 78% of funds, with mixed-gender teams accounting for the balance.

• Women in tech and finance face similar obstacles in building human social capital.

• The number of tech professionals in finance is expected to grow. Tech companies also employ financial professionals. How can finance and tech support one another?

• Deloitte’s report on Global Human Capital Trends found that “softer” areas such as culture and engagement, leadership, and development have become urgent priorities among companies, including tech and finance (respondents especially noted culture and engagement as key issues). How can organizations in these spaces change culture and engagement for women professionals and leaders?

10. Support women in tech and finance at all levels

Socilab - LinkedIn network visualization and analysisIs your current network currently made of tech professionals? Can you add value

to your network? Can you connect with more financial professionals in 2017?

Connect with other tech and financial professionals

All information in this presentation is intended for educational purposes only and not as individual financial advising. Information not intended to promote a specific product. I hope you find some ideas presented today useful.

“When you are adding value to yourself and those around you, your wealth will grow.” - Danielle Wedde