Money Matters by Susan Hirshman



It’s beginning to look a lot like tax day and our finance expert Susan Hirshman tackles a topic many couples can relate to…File Denial
If you are married, should you always file your tax returns jointly with your spouse? Most people will answer yes because they think that’s the best way minimize your tax bill. Often, times the that is the right answer – because married filing jointly gets you the most favorable tax rates.
But, should lower tax rates be your only criteria? NO! with a capital N and a capital O.
I say this because of the following three words “joint & several liability.” Joint liability means you and your spouse are both liable; several liability means you’re each liable for the entire amount not just your own share. In other words, if you file a joint return and the information is false or wrong, the IRS can go after either of you because you both signed the return. This typically happens when one spouse knows more about the couple’s finances and files the tax return. Often, the other spouse simply signs the return without really understanding what’s in it.
To make this come alive, let me tell you the story of Jack and Jill. Jack and Jill are married and file their tax returns jointly. Jack owns his business and doesn’t report all his income on their tax returns. A few years later they are audited by the IRS and it is determined that they owe an additional $100,000 of taxes plus interest and penalties.
Who do you think the IRS will go after to collect on Jack’s tax bill? (a) Jack? (b) Jill? (c) Anyone they can? If you picked answer ©, you are correct, even if they are now divorced.
Jill can’t believe that she is liable for the taxes on the income her husband under-reported. But she is – unless she qualifies as an innocent spouse or under the equitable relief rules as defined by the IRS. Not everyone qualifies, so never assume you would be. Instead, before you sign on the dotted line make sure the numbers on the return make sense; if not- ask questions. Bottom line – don’t be a victim. Protect Yourself.
picture.jpgSusan Hirshman is president of SHE LTD, a consulting firm focused on enhancing the financial literacy of women globally. She is the author of- Does this Make My Assets Look Fat? – a women’s guide to finding financial empowerment and success. Formerly, she was a Managing Director, Wealth Manager with one of the world’s top financial services organization.

Money Matters by Susan Hirshman



Ladies, have you reviewed your estate plan lately?
No? Well, get moving now especially if you are women of wealth. Why this sense of urgency? The tax laws changed and may have an adverse effect on your situation if your spouse were to pass away this year or next.
Adverse affect? How about having all the money going to your children vs you? Yes, it could happen. Here’s why – due to the blah blah bah, the estate tax exemption has increased to $5 million (for 2011 and 2012 from $3.5 million in 2009). What this means is that when one passes they generally will not be subject to estate tax unless the amount of your investments, property, cash, real estate etc (your net assets) is greater than $5 million. Sounds great – yes?
Not always – here is the catch. Many wills are drawn up to say that the amount of your spouse’s assets that will go to your kids is an amount equal to the federal exemption amount and the remainder of the assets to you. This may have worked fine when the exemption amount was $3.5 million, but it may not work so well at $ 5 million.
Quick example: All the assets you and your husband have are in his name and are worth approximately $5 million. He passes and his will dictates that federal estate exemption amount goes to your children, the remainder to you. Let’s do the math.
Total Assets : $5 Million
Amount to kids: $5 Million
Amount to you: 0
Result you want?? For many the answer is a solid NO! So run, don’t walk to your estate attorney now and see how this tax change has affected your situation.
You may be thinking that you don’t have to worry about estate planning because you don’t have any where near $5 million. But you would be thinking wrong. Estate planning is not only about estate taxes, it is really about making sure what you want to happen with your “stuff” (including your children) after your demise happens.
Too often, people hesitate to do their wills because they don’t know whom to choose as guardians for their young children or can’t decide how to split their money between their kids. The upshot here is that doing nothing is a decision unto itself. Basically you have decided that the government will do it for you. Is that really what you want to happen?
Bottom line: now is a great time to review your estate plan., no matter who you are and/or how much money you have.
picture.jpgSusan Hirshman is president of SHE LTD, a consulting firm focused on enhancing the financial literacy of women globally. She is the author of- Does this Make My Assets Look Fat? – a women’s guide to finding financial empowerment and success. Formerly, she was a Managing Director, Wealth Manager with one of the world’s top financial services organization.

Money Matters by Susan Hirshman

assets.jpg Recently I was interviewed for a story in the New York Times that focused on “money talk” for couples. I received so much great feedback on the story that I felt compelled to address it here.
The article opens up by saying…”One of the most difficult conversations a couple can have is not about love or commitment. It is about money — how it is saved and invested and what it means for their lifestyle.”
Do you agree?
I do. Why? I hear it practically every time I give a talk to women and open it up for Q&As. The questions usually sound something like this: How do I start a conversation with my husband about money? How do I ask my partner to see our finances without having him feel like I don’t trust him? How do we have a conversation without fighting?
Three words here…. communicate, communicate, communicate. Sounds simple, right? But as we all know “communicate” is not always simple – especially when it comes to money. You’d be surprised (or perhaps you wouldn’t be) by how many people don’t know how much their spouse is making. Generally, the problem is due to the highly emotional feelings (self worth, self esteem, power, control etc) and unresolved issues with money each partner brings to the table.
So sit back and have a think. What does money mean to you? How does your upbringing and past experiences affect your money attitudes? What stops you from having these conversations – fear? interest? knowledge? lack of ownership? bigger relationship problems?
Having these initial conversations may not be easy but if you don’t have them you have a high chance of becoming part of the “if only” club. You may not know what the “if only” club is, but I am sure you know someone (dare I say more than one) who is a member. Do you have any friends, neighbors or family who were not involved in managing their finances only to find out in times of crisis that their husband was an overly aggressive investor, or he was loaned up to the hilt, or not saving for retirement, or not protecting the family from death or disability and so on and so on. What do you think are the first words out of these women’s mouths? Yep, you guessed it …if only I knew he was (fill in the blank), I would have (fill in the blank.) These scenarios break my heart, because they often result in unfortunate outcomes that could have been avoided or at least mitigated, if they were only talked about.
Therefore, the question I have for you today is this: Will you be willing to bear some discomfort today to learn whether or not your future is on a path that will give you the greatest probability of success? As the saying goes…”just do it!”
picture.jpgSusan Hirshman is president of SHE LTD, a consulting firm focused on enhancing the financial literacy of women globally. She is the author of- Does this Make My Assets Look Fat? – a women’s guide to finding financial empowerment and success. Formerly, she was a Managing Director, Wealth Manager with one of the world’s top financial services organization.
To check out Susan’s latest article in Project You, click on the image below…

Money Matters by Susan Hirshman

assets.jpgIt’s the start of a new year and practically every morning show is talking about diets and exercise – even CNBC. Yes, CNBC one of cable’s top rated investment shows featured Tony Horton, creator of Power 90X programs. On the show, he talked about his programs as well as mentioning that his 11 laws for healthy living.
As the author of Does This Make My Assets Look Fat?: A Woman’s Guide to Finding Financial Empowerment and Success, a book that educates women on investment management through the prism of healthy dieting, I just couldn’t resist. I ran to my computer, visited his web page and glimpsed at the laws to find out if they were analogous to successful investment management.
Lets have a look see…
Law #1Variety is the spice of fitness: His message is you should not only do one type of exercise. By doing the same thing over and over again you subject yourself to training injuries, plateaus, and boredom.
Analogous to successful investment management? Definitely. One of the key investment principles is to avoid concentrated positions ( ie. being invested in one stock, or one specific part of the market etc) Otherwise, you subject yourself to greater risk than if you had a well allocated and diversified portfolio.
Law #2 – Consistency. Tony believes that consistency will coalesce into results.
Analogous to successful investment management? Yes. Research shows that those investors who have a realistic plan and stick with the plan even in times of volatility have a better probability of success than those who are constantly trying to time the market and chase returns.
Law # 3- Intensity. The concept here is to control the things that you can control.
Analogous to successful investment management? Absolutely. You can’t control the markets, you can’t control the economy – but what you can control is your spending, your saving, your asset allocation and your emotions. Have those in check, and you are ahead in the game.
Law #4- Purpose. Your purpose is to have a better life. Your reasons why have everything to do with your level of success.
Analogous to successful investment management? Need I say anything more.
Law #5: Reality – Be realistic with what you want to achieve.
Analogous to successful investment management? Without a doubt. When people are unrealistic with their goals and their return expectations, that’s when we see them making bad and even harmful decisions.
Law #6 : Play – If you shift to a mind-set of playing and having fun, you won’t obsess as much about calories, inches, and weight loss.
Analogous to successful investment management? Yes indeed. Your mindset plays a huge role in your financial success. It is a constant battle between your long term needs and your short-term wants, and thus your focus needs to be on what you are getting vs what you are giving up today.
Law #7 – Success comes from planning ahead. You can’t have a fit, healthy lifestyle if you don’t have a long-term plan. Stop winging it, and make sure to schedule all of your workouts in advance.
Analogous to successful investment management? Sure. Just replace the word lifestyle with financial life and you have the number one rule of financial success.
Law #8 – Stress Less. Stress comes from our reaction to the stressor. You choose how you respond to stressful events. And this response profoundly affects your success.
Analogous to successful investment management? Undeniably. The way you react to market volatility has a huge impact on your success. A study from Dalbar tells us exactly that – it shows that over the past twenty years the typical equity mutual fund investor had a 1.8% return while the market had an 8% return. Why the vast difference – buying high and selling low – in other words letting your emotions dictate your investment decisions.
Law #9 – Love it:, then you’ll discover a fitness philosophy that you’ll stick with for a lifetime.
Analogous to successful investment management? Certainly. You don’t have to love investment management, but you have to feel very comfortable with your plan in terms of timing, dollar amounts and risk profile. That is the only way you will stick with your plan.
Law #10 – Maintain flexibility. Flexibility is the key component to becoming less vulnerable and more durable, no matter what your age.
Analogous to successful investment management? Undeniably, for two reasons. First, a financial plan is not a static document, it changes and adapts to your changing life and financial situation. In addition, the goal of planning is to give you flexibility or choice now and in the future so that you are less vulnerable and more durable no matter where you are in your wealth cycle.
Law #11 . The right fuel supplies proper energy and recovery through balanced brain chemistry.
picture.jpgSusan Hirshman is president of SHE LTD, a consulting firm focused on enhancing the financial literacy of women globally. She is the author of- Does this Make My Assets Look Fat? – a women’s guide to finding financial empowerment and success. Formerly, she was a Managing Director, Wealth Manager with one of the world’s top financial services organization.

Money Matters by Susan Hirshman

book cover-1.jpegThe author of Does This Make My Assets Look Fat shares her tips on how to manage your finances and invest like a pro!
Financial expert Susan Hirshman, author of the brand new book “Does This Make My Assets Look Fat” answers our readers’ burning money questions and breaks down the concept of investing and budgeting and puts it into terms any woman can understand.
As Susan sees it, the rules of successful dieting are the same rules that apply to successful money management. In her new book, Susan offers women a 3-phase personalized plan that follows common dieting programs to help them understand their finances.
Susan’s program completely removes the intimidation factor that often accompanies the words ‘personal finance’ and ‘investing’ and provides women with all the information they need to take control of their financial situations once and for all.
Question from Joey at Real Mom Media:  If you have a small business-at what point should you get an LLC or become a ‘company’?  (I’ve been doing a LOT more blog advertising, sponsorships, ambassador programs-and not sure how to claim them…)
Answer: To LLC/S-corp or not to LLC/S-corp that is the question? Thankfully, the answer to this question, does not take as much introspection and contemplation as Shakespeare’s to be or not to be. If you can answer yes to these questions (especially 1 thru 3), you should talk to a CPA and create the entity that is right for you:
Is the business more than a hobby? In other words, is it a viable business?
Is the business starting to accumulate assets and debt?
Do you want to limit your liability ( in case of law suits etc) to your corporate assets vs your corporate and personal assets?
Do you anticipate having employees?
Are you concerned about IRS audit risk?
Keep in mind that creating an entity is an additional cost. You have filing fees, legal and accounting fee’s etc. The benefits generally outweigh the costs. The bottom line is, in most cases, it makes sense to become a company sooner than later.
imgres.jpegSusan L. Hirshman is a former managing director at JP Morgan. She holds an M.B.A. from Baruch College and is a Certified Public Accountant, a Certified Financial Planner and a Chartered Financial Analyst. She currently lives in Manhattan.
If you have a money question for Susan, email us at beth@rolemommy.com.
*This post is sponsored by the Role Mommy Writer’s Network.

Money Matters from the Author of Does This Make My Assets Look Fat

book cover-1.jpegThe author of Does This Make My Assets Look Fat shares her tips on how to manage your finances and invest like a pro!
Financial expert Susan Hirshman, author of the brand new book “Does This Make My Assets Look Fat” answers our readers’ burning money questions and breaks down the concept of investing and budgeting and puts it into terms any woman can understand.
As Susan sees it, the rules of successful dieting are the same rules that apply to successful money management. In her new book, Susan offers women a 3-phase personalized plan that follows common dieting programs to help them understand their finances.
Susan’s program completely removes the intimidation factor that often accompanies the words ‘personal finance’ and ‘investing’ and provides women with all the information they need to take control of their financial situations once and for all.
Question: How do you ‘get on a budget’? What are the first steps? ((We have a decent income-but we don’t have much to show for it!! We don’t waste $$ on material things-but we barely have anything saved.)
Susan: Believe it or not this question can be answered by discussing dieting and hidden calories. You know what I am talking about – those extra calories you ingest without really counting and paying attention to. The handful of M&M’s from your colleagues candy bowl, the second glass of wine, eating out of the refrigerator, and on and on. Dieting experts state that the first thing you have to do to is to find all these “hidden calories” that are sabotaging your success by writing down everything you eat.
Have you ever done this? If you have, then you are familiar with the first step in developing a budget – writing everything down and finding our “hidden expenses.” Hidden expenses just like hidden calories are things that are not memorable but when you add them together they become significant and tend to impair your financial success. ‘
Budgeting (I prefer using the term spending plan – doesn’t it sound much more palatable?) is all about awareness and measurement of your cash inflows (net salary, dividends etc) less your fixed expenses (those that are must have’s, i.e. mortgage, utilities etc) and your variable expenses (those that are discretionary, i.e. entertainment, clothes etc.)
Bottom line – if you don’t measure you can’t manage.
There are many tools available on the web to help you keep track of your spending plan. In addition your bank and/or credit card companies may offer tools as well. Get on it…☺
imgres.jpegSusan L. Hirshman is a former managing director at JP Morgan. She holds an M.B.A. from Baruch College and is a Certified Public Accountant, a Certified Financial Planner, a Chartered Life Underwriter, and a Chartered Financial Analyst. She currently lives in Manhattan.
If you have a money question for Susan, email us at beth@rolemommy.com.

Money Matters by Susan Hirshman

The author of Does This Make My Assets Look Fat shares her tips on how to manage your finances and invest like a pro!
book cover.jpgHere at Role Mommy, we are pleased to announce a new eight week financial advice series featuring author, corporate executive and money expert Susan Hirshman. Susan is the author of the brand new book “Does This Make My Assets Look Fat.” A former financial executive, Susan breaks down the concept of money, investing, budgeting and puts it into terms any woman can understand.
As Susan sees it, the rules of successful dieting are the same rules that apply to successful money management. In her new book, Susan offers women a 3-phase personalized plan that follows common dieting programs to help them understand their finances.
Susan’s program completely removes the intimidation factor that often accompanies the words ‘personal finance’ and ‘investing’ and provides women with all the information they need to take control of their financial situations once and for all.
We’ve asked Susan to answer our readers burning financial questions and here’s what she had to say:
Question: How do I set aside funds to invest when I never know how much money will be brought in by my next project? Can you still invest even if your budget is tiny?
Susan: I am so glad you asked this question; because it is a common concern amongst entrepreneurs. The best way to answer this question is to ask you a question: how do you deal with your basic fixed expenses when you never know how much money will be brought in by your next project? If you think of investing for retirement as a fixed expense, it becomes part of your overall cash flow management.
The questions you should be asking are: What is the lifestyle I will require in retirement? What is my time frame? What do I have saved currently towards that goal? What is my risk tolerance? Once we answer these questions you will be to determine how much you need to save on a monthly basis to achieve your retirement goal. Many websites have calculators to help you do this (see smartmoney.com for example.) Now, the question becomes – Is this a realistic amount to be adding to my fixed expenses?
If you feel comfortable, that you will be able to manage it within your fixed expenses, bravo – you are on your way to meeting your goals!
If you feel uncomfortable adding that amount to your fixed expenses, I will say bravo as well. Bravo? Yes, because now you know what your situation looks like and are able to make more educated, conscious decisions between your needs versus your wants. You are the only one who can make the choice between your long-term goals and your current spending.
Furthermore, the amount you invest should not be an all or nothing situation. Here, something is definitely better than nothing. Keep in mind that many mutual fund companies allow you to contribute a minimum monthly amount (typically $50 or $100) as long as it is a direct wire from your bank account. Take advantage of one of the key drivers of success – time and the power of compounding. Albert Einstein is quoted as saying, “The most powerful force in the universe is compound interest.” The longer your money has to grow the less hard it has to work in the future.
Do what you feel comfortable with today but know that you are making a choice about tomorrow. Plans and goals are dynamic and change as your business changes, so review your “retirement fixed expense” at least annually.
imgres.jpegSusan L. Hirshman is a former managing director at JP Morgan. She holds an M.B.A. from Baruch College and is a Certified Public Accountant, a Certified Financial Planner, a Chartered Life Underwriter, and a Chartered Financial Analyst. She currently lives in Manhattan.
If you have a money question for Susan, email us at beth@rolemommy.com.
Disclosure: This post is sponsored by the Role Mommy Writer’s Network.