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Financial Tips for Women
Women Make Good Millionaires
by Sharon Olson (Write for us!)
(Click on the links within the article to get definition of that word)

Women who create wealth use their resources to improve their lives and the lives of others.

Madame C.J. Walker, an African American born to ex-slaves and orphaned at the age of seven, became a self-made millionaire in 1914, yet, she used her success to help others. In less than twenty years she grew her "Walker System" into a small empire, using "Walker Agents" (mainly women) to carry her beauty products around the U.S. and the Caribbean. With substantial accumulated wealth, she was a generous donor; making large contributions to the National Association of Colored Women, funding homes for the needy and scholarships for young men and women.

Today, there are many women who have reached the millionaire mark and have followed a similar footprint with their wealth. Women who create wealth use their resources to improve their lives and the lives of others.

One of the fundamental changes that has contributed to wealth accumulation for women is the increase in the number of women who are making upper six figure salaries; a rate of growth that is much greater than that for men. To maintain this lifestyle in retirement, women will need to develop a consistent savings plan to accumulate enough wealth to replace their income. This amount may be well over $1 million. Women who have reached this elite group of millionaires have accomplished two critical objectives; they found a way to earn a high income and they developed a proactive savings and planning posture.

How have these women increased their income? Most women have had to take risks to succeed in business, venturing beyond the traditional female roles to become successful entrepreneurs. With higher incomes, women are better equipped to accumulate wealth and create freedom. Today, nearly half (48%) of all privately held businesses in the U.S. (and more than half in Minnesota) are owned 50% or more by women according to the Center for Women's Business Research. That is 10.6 million businesses that provide jobs, income and employee benefits to millions. Businesses owned by women are growing at almost twice the rate of all privately held companies.

Wealth, whether earned or inherited, creates opportunity but comes with a price tag. For self-made women millionaires, perseverance and a strong work ethic play a large part in achieving that goal, as well as other shared characteristics such as passion, tenacity, dependability and humility. Often they have no family support and backup and sometimes they have had to overcome significant hardship. Along the way, they gain the strength and determination it takes to move on and define their own route to success. They do not give up.

Women are good accumulators of wealth for a number of reasons. Because they are unwilling to reveal their wealth, they are more likely to live below their means. They don't crave expensive things; they pay off mortgages early and even use coupons while food shopping. Most of the millionaires interviewed by Thomas J. Stanley for his book, Millionaire Women Next Door (all of whom had earned rather than inherited their wealth) became financially successful because they craved independence, not because they were aspiring consumers. Most of them budgeted and accounted for their expenditures long before they reached millionaire status, and they remain frugal. They know how important it is to save methodically, and to manage their money.

Women are wealth builders. They strive to develop a defined strategy when investing in stocks and mutual funds, and while trading less frequently, they generally take more time to research and plan their purchases. Compared to male investors, women are willing to seek professional advice and to ask for referrals. Women are relationship builders. They are ready to trust their investment advisers and pass on that connection to others if they are successful.

Where wealth is inherited, that trust and close relationship is particularly important. Statistically, a woman is four times more likely than a man to outlive her partner, and as a result, it is women who will end up in charge of much of the $41 trillion expected to pass from generation to generation over the next fifty years. As women control more wealth, they recognize that sound financial advice is crucial in order to help with tax implications and estate planning.

So why do women make such good millionaires. As they achieve financial success, they maintain their core values. They're generous. Charities and family members both receive a larger percentage of their income from women than from men. According to Stanley, the typical woman millionaire business owner allocates 4.7 per cent of her income to her adult children, grandchildren, nieces and nephews, brothers and sisters. Mr. Stanley wrote. "Men who are millionaire business owners allocate far less: 1.5 percent."

For women, money means independence and freedom. Self-made, affluent women believe in themselves; they find fulfillment and satisfaction in defining and achieving their goals, being self-reliant and sharing the wealth. Since they recognize their strength and limitations, they are confident in seeking advice and building relationships they can trust.

To all women, don't be afraid to set your sights high. With courage, consistent saving and sound financial planning, millionaire status is within reach. And, in the right hands, money can create a power of good.

Advisor is a financial consultant with and offers securities through Linsco/Private ledger, Member NASD/SIPC.