As a woman of color and an immigrant from India, Minoti Rajput has been forging new paths in her field for decades.
When she moved to the United States forty years ago and sought a job as a financial planner, you needed to either be a life insurance agent or a stock broker. Neither sat well with Minoti. Reluctantly, she chose life insurance, which ended up being a good choice on her part. She learned a lot about business and estate planning there. The life insurance company that hired her knew she didn’t have any sales experience, but they thought she’d do well with minorities.
Minoti ended up outperforming other agents who had previous sales experience because her key to sales was through education. She was able to educate people on what their problems were and how to address them. Education remained important to Minoti as she finally was able to branch out as a financial planner and eventually start her own business.
She was looking for her niche – who she wanted to specialize in helping. Women were always at the forefront of her mind and she thought of working with women who had recently lost their partners, through divorce or being widowed. But, at the beginning of 1989, Minoti met three families with adult children with disabilities and none of them had answers to what the plan was for the adult child if something happened to them – the parents and caregivers.
Minoti’s older sister has a child with autism and she always wondered what would happen to the child if something happened to her sister, so her personal life informed her professional life and the two came together. That’s when she decided this is who she wanted to focus on working with. She became the first financial planner in her state to specialize in special needs planning.
Now, Minoti’s been in special needs planning for over 30 years, she has helped over 1,800 families, nationwide, and she’s spoken all over the country about it. But she kept thinking she needed to leave a legacy about working with special needs families, so she wrote a book about it, called “Beyond a Parent’s Love”, to share the information she’d learned.
When Minoti started working as a financial planner decades ago, women, for the most part, didn’t know what would happen with their finances if they lost their spouse. And, to a large extent, Minoti says that’s still the case today. “I want to educate women and give them tools to be able to check if they’ll be okay if and when that day comes.”
She teaches all of her clients that telling your money where to go instead of asking where it went is at the heart of financial planning. You have to know your expenses and your budget before you can do anything else.
Minoti says whether you use an app like Mint, or you prefer to put your money in jars, it doesn’t matter. But you need to work on a cash flow first. You can still enjoy life, but have some discretion with where your money goes and how you spend it.
Understanding your cash flow comes before anything else, but it’s still a very important first step and a starting point for Minoti’s 5 Financial Matters All Women Should Know.
- Cash Flow and Net Worth Statement – Before you can do anything, you have to have your cash flow worked out. Understanding your cash flow will result in having a net worth statement. Your liquid net worth is what you will have to rely on if you need it and it’s important to understand that number. You also, ideally, want this number to grow year after year, but if it’s not, you want to know why.
- Risk Management – You need to have an entity for your business. You need to understand if you’re a 1099, if you have an LLC, an S corp, a C corp and you need to understand what goes along with that. You’re open to certain problems depending on your business’ entity, so it’s important to know what those are and how to avoid them – OR if you should be changing your business’ entity so that it’s more in line with what you’re willing to risk. You need to see where your expenses and where your income are coming from. After a year, take stock of where funds went. While you take stock, you need to know if you’re making a six-figure income or not and see if that satisfies you. You also need to know if where you are makes you happy. You have to know who your quarterback is. You need to know when you need your tax specialist to work with the person who is dealing with your retirement funds. You don’t rush off to a cardiologist without consulting your internist, so you need to understand how the people you’re working with work for you and who your quarterback is.Women need to know if they’d be able to stay in their homes and what their lifestyle will look like if they lose their spouse. It’s important to know if you’d end up having to go from a three bedroom house down to a two bedroom apartment.
- Tax Matters – You have to know the fundamentals of income and estate tax. And these are in flux constantly because of legislation, so you have to stay informed of what the thresholds are and what they mean for you.
- Retirement and Investment Planning – Disability is perhaps more important than life insurance to have figured out – and to invest in. If you die, you’re not here to incur expenses anymore, but if you are disabled suddenly, it can be like a living death. You’re unable to bring in the same income, but you have increased expenses to worry about. Most people plan and invest in their life insurance first and don’t worry as much about disability, but it’s important to know what you would do in the event of a disability occurring, for you or your spouse. Young people don’t want to worry about retirement planning, but it’s important to understand. In a 401k plan, your money goes into a money market account. So you need to understand those. Investments aren’t always about the return on your investment. Plenty of people are interested in investing in real estate, but that’s not necessarily a liquid investment. (A liquid investment is anything you can turn around for cash in 3-5 business days.) Even if you own real estate, you may not be able to turn it around that quickly for cash. Right now the markets are hot, but in 2008 and 2009, real estate wasn’t moving that way.
- Estate Planning – Estate planning is about having the right documents. It’s not a matter of having a simple will. If both parents go through a joint disaster and perish, the will would go through probate and have a conservator assigned and the child won’t get the funds from your life insurance until they come of legal age (18). You have to have a living trust to avoid this pitfall. You want to make sure you have the correct documents in place for your specific circumstances – whether you have a larger estate or you’re an entrepreneur, or whatever the case.
Knowing the nuts and bolts of all of these financial matters will help women educate themselves in a way that they can prepare for a worst case scenario, so that IF it happens, they won’t find themselves in a surprising position. There’s enough to worry about if you lose your spouse, your financial security shouldn’t be one of them.
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