Four Expert Tips on Personal Finance for Executive Women

The Glass Hammer, one of my favorite blogs for women in business, posted a great article last week with tips on personal finance for executive women. It was contributed by Myra Salzer, author of Inheritor’s Sherpa and Living Richly: Seizing the Potential of Inherited Wealth. You can find a snippet below. (Keep the awesome content coming!)

1. First – secure your “nut.” There is a quick and easy way to calculate whether or not you have inherited enough to have your “nut” secure already. Can you comfortably live on one fortieth of your inheritance? For example, let’s say you inherited $10 million. $10 million divided by 40 equals $250,000. If all your needs and wants would be met on $250,000 per year (after taxes and adjusting for inflation) then your “nut” is secure. All you need to do is invest in a manner that keeps up with inflation and spending. Of course, you’ll miss out on the next hot IPO (initial public offering) and you will never again enjoy cocktail-party bragging rights boasting about your latest venture. But you will be secure.

2. Then – find an investment management firm whose intractable systematic approach is wealth preservation. (We recommend independent registered investment advisory firms that don’t sell any products and who are not associated with any brokerage houses or broker dealers.) Remember, you don’t need to make a killing in the markets when your “nut” is secure. You need only avoid losses. This isn’t nearly as easy to accomplish as it was for Grandmother, but it is doable. Find someone with a global perspective whose analysis goes beyond the scope of modern portfolio theory and CFA (certified financial analyst) curriculum.

3. Make sure your investment manager is a fiduciary, a person or firm whose legal obligation is first to you, above all else. If the management firm is, for example, a public company, the managers’ first obligation is to the firm’s shareholders, so they cannot possibly be fiduciaries. Demand that the manager agrees to a fiduciary contract.

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Leadership Advice for Current and Future Executive Women

Earlier today I came across this helpful article on one of my favorite blogs, the Glass Hammer, with leadership advice from various executive women. Being a woman in the business word can be difficult, to say the least. Fortunately, the bloggers at the Glass Hammer have gathered some simple and straightforward advice. Check out a clip of their article below.

Get Really, Really, Really Good at Your Job.
“I didn’t chart my career out,” said Sutton, “but I always had a good view of what I loved doing and what the next career step might be.” Sutton started her career in finance as a clerk with Wachovia and worked her way up through the organization over 35 years, until she left to establish the banking business for Morgan Stanley. She added, “I’ve given advice to people I’ve mentored that if you are too focused on the next step, you are not going to do a very good job in the job you are in. And I’ve seen that over and over again. Get really, really, really good at the job you are in because if you are and you’ve mastered it, you will move from the next role to the next role to the next role, but if you look too far ahead, you probably won’t… People who seem to be really successful are great operators. They get in the business and understand the business.”

Be Comfortable With Ambiguity.
Said Smith, who, after 14 years of brand management and executive roles at Kraft Foods, was brought to Avon by Andrea Jung to help her transform the company: “We are all taught that great leaders set the strategy and then set everybody off marching. But, right now, nothing is more important than a general agile leader who is comfortable with ambiguity. Let’s face it - it is going to be a bumpy and fascinating ride. We need people who are nimble and agile in their thinking who are, to some degree, comfortable with figuring it out as they go along. We [at Avon] look for people who can handle change, who can handle the curve balls…understanding that you can’t possibly have it all figured out and being open to that. Also, people that can communicate and inspire. That’s always been important in leadership but now more than ever because you have to communicate and be really transparent and take people along on the journey, to say, ‘This is uncharted territory but this is where we are going.’” Sutton agreed, adding that even her job at Morgan Stanley, which was created for her, changed shortly after she joined the company. “What I was hired to do changed in 6 months and that shifted because the environment changed. [But it was OK because of] the belief I could make a difference.”

Think of Your Career as a Jungle Gym Rather Than a Ladder.
Moderator Pattie Sellers advised the audience of MBA women: “Don’t think of your career as a ladder, think of it as a jungle gym. If you think of it as a ladder, you won’t have the peripheral vision to enable you see the lateral opportunities and especially today when you don’t know what the hot job is going to be tomorrow. You’ve got to keep yourself open and you’ve got to swing to the opportunities that come along.” Smith agreed, “I believe the greatest plans are restrictive instead of instructive. Figure it out as you go along. The only guiding principle I’ve had is to insist that my life and work have passion and purpose. When I think about the pivotal jobs I took [like her move to Kraft’s Callard & Bowser-Suchard to handle the then-unknown Altoids brand for Kraft or the jump from being Group Vice President and President of the U.S. Beverages and Grocery Sectors in Kraft to Brand President for Avon], they really made no sense on paper.” She continued: “Just go into everything saying – I’m going to be inspired and I’m never going to settle and go where that takes you. ” And Sellers added, “I’m struck by women on the Fortune’s Most Powerful who’ve taken lateral moves or even taken downward moves because they wanted to expand their experiences. And that’s what pays off in the long term.”

Bailed Out Companies Owed IRS Millions

News broke this week that at least 13 companies receiving TARP funds owe a combined total of $220 million in unpaid federal taxes. Frankly, since these companies were running into the ground, this is not really surprising. And, since 40 million individual taxpayers owe the IRS, these corporations are in good company. Where it gets a little trickier, however is that each company who accepted TARP funds signed contracts stating that they did NOT have unpaid taxes.

We are left with two possibilities.

1. These executives were even more out of touch with their companies’ functioning than we previously thought. That they truly did not know they owed the IRS millions of dollars. Ignorance, evidently, is bliss!

2. If these executives were not ignorant of their companies’ enormous debts to the government, then this is outright criminal. They signed their names, took billions of dollars in aid, all the while defrauding the government and American taxpayers.

Which is worse? Incompetence or dishonesty?

And where in this were their lawyers? As an attorney and a business owner, I certainly wouldn’t sign anything that hadn’t been reviewed by my attorney. It is just good common sense: read the contract before you sign it. But clearly, common sense is not so common anymore.

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