Wealth building tips for the modern woman

NEVER before in history have there been more women in high-earning positions than there are today. As the number of women employed in the labour force steadily continues to rise and more of them take on managerial and leadership roles, women are taking an even greater interest in how to better manage their finances and build their wealth.

If you are a woman who is looking for practical ways to grow your wealth and achieve your financial goals, the following are some suggestions from NCB Capital Markets Limited that you may find helpful.

Build wealth by opening an investment account

Women are known to be good savers but if you are serious about building wealth, you need to do more than regularly depositing money into a savings account. The average savings account interest rate is below the rate of inflation, which means over the medium to long-term, inflation may erode the purchasing power of the money you’ve saved. Consider the fact that the average interest rate earned on savings deposits is 0.67 per cent, relative to the 2.3 per cent inflation rate registered over the 12 months leading up to end January 2019.

To truly build wealth, your money needs to work for you. Consider opening an investment account. An investment account will offer you a chance to invest in assets with higher returns that not only preserve, but also enhance your wealth. Though the unfamiliarity of investing may spark apprehension, the pool of available financial assets is wide with different levels of risk to match your risk appetite — whether high or low. Assets to consider may include stocks, corporate and government bonds, mutual funds, among others. Your wealth advisor can also guide you with expert advice and information so that you can make the right investment decisions to achieve your goals. Investment accounts offer you an opportunity to take your wealth game to the next level.

Build wealth by investing in real estate

When done right, real estate investments can be financially rewarding, making it a good way to build wealth. Still, some women shy away from investing in real estate because it can be expensive and intimidating. But you could become a real estate investor much sooner than you think, with the first downpayment coming from the income you earn from your investment account. If you are paying rent now, it may be time to check and see how much you qualify for to acquire property and what your monthly mortgage payments would be. You may be surprised to find that you could easily be paying for a mortgage with the money you are spending on rent now.

The market is favourable for those looking to acquire real estate at this time. The NHT offers mortgages at very low rates to contributors and these can often be combined with mortgages from banks to make larger purchases. With the recent replacement of the ad valorem stamp duty with a flat fee of $5,000 per document, and the reduction in transfer tax on the transfer of real and financial property from five per cent to two per cent, the transaction costs associated with acquiring real estate have fallen significantly. Market interest rates are also at a record low. It is therefore an ideal time to enter the real estate market.

If you choose wisely your real estate investment has the potential to appreciate in value over time. Moreover, your home/property could also double as an income generator, thus amplifying its potential contribution to wealth building. We will explore this further in part two next week.

It is time for us to rewrite the title of this bestseller, “Men buy shares from Mars and women have a savings account from Venus”. The investment pool is wide with options to match various risk appetites, and many opportunities for the modern woman to build wealth. We have highlighted a few practical suggestions here, but you will learn so much more as you embark on your journey to wealth. Speak to a wealth advisor who can help you develop a strategy that suits your needs.