STEP ONE LEARN THE FACTS--AND MYTHS--ABOUT YOUR MONEY Wendy sat in my office, perched on the edge of her chair, alert, inquisitive, and a little bit embarrassed. An experienced and highly successful real estate agent, she had come to me for a financial consultation--and the facts of her situation were hardly reassuring. Although she earned well over $250,000 a year and was able to put two kids through private school at an annual cost of $15,000 each, her personal finances were a mess. A self-employed single parent, she had less than $25,000 saved for retirement, no life or disability insurance, and never bothered to write a will. In short, this intelligent, ambitious businesswoman was completely unprotected from the unexpected and utterly unprepared for the future. When I asked Wendy why she had never done any financial planning, she shrugged and offered a response I'd heard countless times before: "I've always been too busy working to focus on what to do with the money I make." Looking across the restaurant table, I could see the sadness in my mother's eyes. A good friend of hers had just gone through a bitter divorce. Suddenly, after more than three decades of marriage to a wealthy surgeon, the friend now found herself living in a tiny apartment, struggling to make ends meet as a $25,000-a-year secretary. Like many formerly well-off women, she had never paid much attention to her family's finances, and as a result her estranged husband was able to run rings around her in the settlement talks. It was a terrible thing--all the more so because it could have been prevented so easily--and it made me wonder if my mother was similarly in the dark. So I asked her. "Mom," I said, "do you know where the family money is?" I thought it would be an easy question. After all, my father was a successful financial consultant and stockbroker who taught investment classes three nights a week. My mother had to be up to speed on the family finances. At first, however, she didn't reply. Then she squirmed slightly in her chair. "Of course I know where our money is," she finally said. "Your father manages it." "But where is it? Do you know where he's got it invested?" "Well, no, I don't. Your father handles all that." "But don't you have your own accounts, your own line of credit?" My mother laughed. "David," she said, "what do I need a line of credit for? I have the best bank in the world--your father." The reason I've started our journey with these two stories is that I know you are a very special woman--the kind of woman who believes in herself. Specifically, you believe that you possess the abilities and the intelligence to have the kind of life you feel you deserve. (If you didn't, you would have never picked up this book in the first place.) You also believe--correctly--that money is important and that you need to learn more about accumulating and protecting it. Finally, I know that you are someone who recognizes that it takes more than a single burst of enthusiasm to improve yourself and develop new skills; it also takes commitment and education. That is why the first step of our journey is all about getting motivated to educate yourself now and on an ongoing basis about your money and the role it plays in your life. I believe that no matter what your current situation is--whether you are already wealthy or living paycheck to paycheck--a little education combined with motivated action can go a long, long way. I also know from working with thousands of women that, sadly, neither Wendy the real estate agent nor my mother are at all unusual. Yes, women have long owned nearly half of the financial assets in this country. Yes, most women work and nearly half of them are their family's main income earner. Yes, the statistics about divorce and widowhood are app Excerpted from Smart Women Finish Rich: 9 Steps to Achieving Financial Security and Funding Your Dreams by David Bach All rights reserved by the original copyright owners. Excerpts are provided for display purposes only and may not be reproduced, reprinted or distributed without the written permission of the publisher.
