My Experience Building Wealth

By Claudia Mollerup-Madsen

I have had the honor of managing clients’ wealth management for two decades. Many of my clients are business owners, have family offices, or are currently enjoying their retirement years. Having guided my clients over the years, I have learned many practical approaches to wealth management. Here are some guidelines to follow for accumulating wealth.

Set goals

At Morgan Stanley, we frequently use the term “goals-based wealth management.” As you might expect, setting goals is critical for determining your life’s financial plans. Think about what you would like to accomplish. For example, are you interested in starting your own business? Do you think about succession plans for a company you manage or own? Are you interested in purchasing a new vacation home? Have you thought about the age you would like to retire and if your financial goals are on track to meet that date? All of these answers will provide the right information for you to set essential goals.

Be proactive

Be proactive in meeting your goals. Too many people are unsure of what financial decisions and goals to set, so they do nothing. Get educated on money and investment opportunities. Be proactive in setting your goals and finding the right vehicles for your money to grow, whether it be stocks, bonds, mutual funds, investing back in your business, real estate, college savings or other means. By setting proactive goals now, you can meet your financial objectives for the future.

Timing is key

If you are early in your career, now may be the time to take greater risks regarding your investment plans.  The higher the risk, the greater the opportunity for profit if the company performs well.  Additionally, if an investment opportunity does not work out, you have more time on your side to make up that difference.  However, if you are further along in your career, near retirement, or in retirement, taking risks isn’t always advised. Talk to your financial advisor to see what is right for your situation.

To maximize your investments, look for opportunities to invest with compound interest. The earlier in your career the better the results. Compound interest is when your earnings also generate earnings.  Sometimes it is said to be interest on interest.  The longer you allow your investment to grow, the more quickly it will grow.  There are many opportunities out there for compound interest including some saving accounts, money market accounts, certificates of deposit (CDs), mutual funds and other investments.

Lower your expenses

It’s no surprise that if you spend less money, you can save more money. First, ensure you have a relevant, up-to-date budget based on your current income and expenses. Then, take a look at where your money is going. Do you really need a new car straight from the dealer, a two-week vacation around the world, or the latest smartphone? Most likely you can make cuts in various areas and apply that money to savings, investments, or your emergency fund. The more you save, the greater the wealth you can accumulate.

Build good habits

To amass wealth, you need to have good saving habits. Without continuing to save and watching your expenses, your money will dwindle before you know it. We have all heard of the musician or lottery winner who blew through their earnings all too quickly. Build your good habits of budgeting and saving now to reap the benefits of your hard work later.

Like most situations in life, the harder your work, the greater the payoff. Building wealth is no different.  By working diligently through various life stages to meet your financial goals, you may be able to accumulate wealth and bring yourself greater financial freedom.

Claudia Mollerup-Madsen is Vice President and Financial Advisor with the Wealth Management Division of Morgan Stanley in Houston.

Is Your Small Business Expecting a Tax Refund?

 

If you are a small business owner, you may be expecting a tax refund this year for your company.  The good news is that in fiscal year 2017, Texas had the highest tax refund amount of all states with an average refund of $3,206.

If you are indeed receiving a tax refund, resist the urge to spend it all on impulsive purchases and instead invest it back into your small business instead.  Do remember that the refund is not a free giveaway from the government, but rather that money was yours all along, usually by paying too much in estimated taxes or too much in withholding.  Be purposeful with your refund and have the money work for you.

Pay off debt

Debt can take a toll, personally and in your business.  If you are carrying credit card debt or a line of credit, you may want to put your tax refund toward paying off some of that balance.  High-interest rates can be debilitating to your financial future.  Alternatively, you may consider paying off other loans such as student loans, title loans, or any other high-interest loans that your business made.

Save for emergencies

Only 40 percent of Americans have enough money to cover an emergency expense of $1,000.  That leaves a staggering 60 percent who cannot afford to pay for a trip to the emergency room, car repair, or broken refrigerator. Instead, many Americans are forced to take out loans or run up credit card bills to pay for emergencies. Now is the time to consider putting some, or all, of your tax refund into an emergency fund, or adding to your current fund. A good first step is to start with a goal of $1,000.  As a small business owner, you may have other costs to consider covering if an emergency happens. Make sure your emergency fund can cover any office expenses or employees’ salaries, should you experience unexpected bumps in the road.

Build retirement and savings

As a business owner, sometimes retirement and savings plans can be put on the backburner as you pour your earnings back into your business. Don’t let this happen. Make your savings and retirement a priority. If you receive a tax refund, consider putting some of it into your retirement. The IRS will allow you to contribute $6,000 toward your IRA and $19,000 towards your 401(k) in 2019. Additionally, think about putting money towards college savings in a 529 plan for your children’s education or your employees’ higher learning.

Donate to charity

You and your business may be involved with various charities, or maybe you are looking for ways to get involved in the community. A tax refund provides a wonderful opportunity to give back to society.

Invest back in your business or start a new one

Have you been looking to add employees or services to your small business? Maybe you are looking to start an additional company.  Consider using your tax refund to take your business to the next level. Reinvesting back in your company, or getting a new venture off the ground, can lead to more significant growth in the long-term.

There are many smart options in which to use your tax refund.  While splurging on personal items such new shoes or concert tickets may be enjoyable ways to spend your refund, resist the temptation and put the money towards your financial future.

Claudia Mollerup-Madsen, Vice-President and Financial Advisor at Morgan Stanley in Houston, was born in Peru, and spent her life as an expat child living around the world.  Claudia graduated from St. Mary’s University in San Antonio with a BA in International Business.  She is fluent in both Spanish and English and has been in the financial advisory sector for 30 years, serving both U.S. and Non-U.S. citizens.

She worked for Merrill Lynch from 1989-1990; Citigroup Private Bank 1990-2001; UBS International 2001- 2009; and moved to Morgan Stanley in 2009.

Claudia has received several awards and honors including being named as one of Houston Business Journal’s 2018 Women Who Mean Business and being honored as a member of the 2019 MAKERS class, which celebrates the trailblazing women of today and tomorrow.   She is also a member of the Morgan Stanley Women’s Advisory Council, an honor chosen by her management team to develop the empowerment and professional advancement of female advisors.

She has been interviewed multiple times as a financial expert on ABC13, Univision, KUHF, NPR, Houston Business Journal and KPRC 950 am.

She is a past board member for The Women’s Resource of Greater Houston and continues to teach financial literacy to women and young women at risk.  Additionally, she is a member of the Houston Livestock Show and Rodeo’s International committee and a USTA Texas region board member, an elite group of tennis advocates promoting tennis.

Claudia Mollerup-Madsen

Vice President and Financial Advisor, Wealth Management Division , Morgan Stanley

Women’s History Month

 

March is Women’s History Month, a month observing the achievements of women.  It was born out of a few small events in the Sonoma, California school district in 1978. Several presentations on women’s culture and history were made in schools, an essay contest was held, and even a parade made its way through downtown. The celebrations and recognitions caught on nation-wide, and by 1986, Congress passed legislation declaring March “Women’s History Month.”

Since then, women have remained a great influence our nation. Beginning in 1982, women out-earned their male counterparts in college bachelor degrees and have continued to earn more degrees than men. It is predicted that by 2026, women will earn 60 percent of all higher education degrees, including associate’s, bachelor’s, master’s, and doctoral degrees.

Additionally, 40 percent of women out-earn their husbands. With this in mind, it is no surprise that women control more than 60 percent of all personal wealth in the U.S. With these statistics, you see the importance of women and finances. Whether it be running or investing in a women-owned business, knowing the purchasing power of family goods and services, or growing their retirement savings, women can be on top of their financial prowess.

Starting or Investing in a Women-owned businesses

U.S. women are more career driven and financially independent than ever, and are more likely to start a business than men. 40 percent of businesses in the U.S. are women owned and women of color account for 47 percent of these women-owned businesses were owned by women of color.

Whether a woman is deciding to start their own business, or to invest in one, the stats on women-owned businesses are encouraging.  The number of women owned businesses are growing faster than men owned businesses, increasing 2.8 percent in 2016, and as the amount of women-owned businesses grows, so does employment, with jobs at women owned businesses growing by 11 percent since 2012. 

Making Budgeting a Top Priority

Since the purchasing power of women in the U.S. ranges from $5 trillion to $15 trillion annually, budgeting accurately is a critical step to financial independence. Budgeting provides a spending plan so that you can make sure you have enough money to do things you need to do. Whether it is paying the mortgage or saving for retirement, proper budgeting gives you the guidance to make the right spending choices.

The three necessary steps to maintaining your budget are 1) set your financial priorities, 2) track your spending, and 3) adjust your spending to match your original preferences. Failing to stick to a budget can lead to out of control spending and thwart the money that would otherwise be applied to your savings and retirement plans.

Saving for Later Years

Women live on average five years longer than men. Therefore, it is crucial that women prepare for their later years. Whether a 401(k), Traditional IRA, or Roth IRA, ensure you have set up a retirement savings account and are actively contributing to it. The earlier you start saving, the better.

A recent survey found that 42 percent of Americans have less than $10,000 in retirement savings and 14 percent have zero retirement savings. Do not become this statistic. As part of the budgeting process, you should be putting away the appropriate amount for later in life.  A general rule is to save 10 to 15 percent of your income each month for retirement.

Re-evaluating your budget, including savings for retirement, is a good plan to help ensure you stay on track to meet your financial goals. This March, as we celebrate Women’s History Month, make sure your financial goals are on the right track to ensure your financial independence for years to come.

Claudia Mollerup-Madsen, Vice-President and Financial Advisor at Morgan Stanley in Houston, was born in Peru, and spent her life as an expat child living around the world.  Claudia graduated from St. Mary’s University in San Antonio with a BA in International Business.  She is fluent in both Spanish and English and has been in the financial advisory sector for 30 years, serving both U.S. and Non-U.S. citizens.

She worked for Merrill Lynch from 1989-1990; Citigroup Private Bank 1990-2001; UBS International 2001- 2009; and moved to Morgan Stanley in 2009.

Claudia has received several awards and honors including being named as one of Houston Business Journal’s 2018 Women Who Mean Business and being honored as a member of the 2019 MAKERS class, which celebrates the trailblazing women of today and tomorrow.   She is also a member of the Morgan Stanley Women’s Advisory Council, an honor chosen by her management team to develop the empowerment and professional advancement of female advisors.

She has been interviewed multiple times as a financial expert on ABC13, Univision, KUHF, NPR, Houston Business Journal and KPRC 950 am.

She is a past board member for The Women’s Resource of Greater Houston and continues to teach financial literacy to women and young women at risk.  Additionally, she is a member of the Houston Livestock Show and Rodeo’s International committee and a USTA Texas region board member, an elite group of tennis advocates promoting tennis.

Claudia Mollerup-Madsen

Vice President and Financial Advisor, Wealth Management Division , Morgan Stanley

Don’t Let an Emergency Put You into Debt

 

February is known as Heart Month and has become a time for us to assess our health. As women, we sometimes delay our own needs to instead care for others, such as our children, spouses, aging parents, and employees. However, it is crucial that we also take time to care for ourselves, not only to tend to our health but to tend to our finances, as well.

Too few Americans are prepared financially for an emergency.  A survey by the Federal Reserve found that more than 25 percent of Americans have skipped necessary healthcare because of the cost.[1]  And another recent survey by Bankrate found that only 39 percent of Americans could cover an emergency of $1,000 out of their savings.[2]  With these alarming statistics, you should be prepared for any unexpected situation.

An emergency can constitute any situation that catches you by surprise and for which you are financially unprepared. Cars break down, homes get leaks, and sometimes the tax bill is bigger than you anticipated. Having an emergency fund may help you financially withstand bad news without racking up debt.

Create your emergency fund now

Do not put off something today, that you should have done yesterday. Start saving for an emergency fund today. A general rule of thumb is to save three to six months’ worth of expenses.[3] That number can shift depending on your specific circumstances. If you have children or are helping care for aging parents, you should save more than if you are single. Conversely, if you have parents who might help you in case of a crisis or you have other means of savings, you may need less in your emergency fund.

It can feel overwhelming to think of hitting your goal of three to six months’ worth of savings.   So, start small. If you can put away just $20 a week, by the end of the year, you will have saved $1,000 for your emergency fund.[4] Additionally, throw your extra change each week in a jar and watch that begin to accumulate for your fund.

Where to place your emergency fund

In an emergency, you may not have time to sell stock or other assets.  The key is to have quick, easy access to the funds.  This avenue may be accomplished through opening a money market or basic savings account.  You need that quick access, but not such easy access that it is tempting to use for other purchases. [5] Look for an account that does not have annual fees or a minimum balance requirement.[6]

Make savings a habit

Whether saving for retirement, college or an emergency fund, make saving a weekly or monthly habit.  Once you hit the three-to six-month saving goal for your emergency fund, continue to save.  And, if you do need to withdraw some money for an emergency, make sure you replenish it so there are funds for next time.

Creating an emergency fund is not necessarily fun, but the confidence it will bring you will be worth it.  Savings should be a priority so that you stay financially prepared and secure for anything life throws at you.

Claudia Mollerup-Madsen, Vice-President and Financial Advisor at Morgan Stanley in Houston, was born in Peru, and spent her life as an expat child living around the world.  Claudia graduated from St. Mary’s University in San Antonio with a BA in International Business.  She is fluent in both Spanish and English and has been in the financial advisory sector for 30 years, serving both U.S. and Non-U.S. citizens.

She worked for Merrill Lynch from 1989-1990; Citigroup Private Bank 1990-2001; UBS International 2001- 2009; and moved to Morgan Stanley in 2009.

Claudia has received several awards and honors including being named as one of Houston Business Journal’s 2018 Women Who Mean Business and being honored as a member of the 2019 MAKERS class, which celebrates the trailblazing women of today and tomorrow.   She is also a member of the Morgan Stanley Women’s Advisory Council, an honor chosen by her management team to develop the empowerment and professional advancement of female advisors.

She has been interviewed multiple times as a financial expert on ABC13, Univision, KUHF, NPR, Houston Business Journal and KPRC 950 am.

She is a past board member for The Women’s Resource of Greater Houston and continues to teach financial literacy to women and young women at risk.  Additionally, she is a member of the Houston Livestock Show and Rodeo’s International committee and a USTA Texas region board member, an elite group of tennis advocates promoting tennis.

Claudia Mollerup-Madsen

Vice President and Financial Advisor, Wealth Management Division , Morgan Stanley

[1] https://www.morganstanley.com/access/emergency-funds

[2] https://www.morganstanley.com/access/emergency-funds

[3] https://www.morganstanley.com/access/emergency-funds

[4] https://www.saveandinvest.org/military-everyday-finances/start-emergency-fund

[5] https://www.morganstanley.com/access/emergency-funds

[6] https://www.morganstanley.com/access/emergency-funds

Stay Vigilante about Cybersecurity

 

Claudia Mollerup-Madsen is Vice President and Financial Advisor with the Wealth Management Division of Morgan Stanley in Houston.

A new year brings a new opportunity to stay vigilante about cybersecurity. In 2017, more than 143 million Americans were affected by cybercrimes; and it is estimated that cybercrime costs $600 billion annually – up from $500 billion.  According to one study, Texas ranked number three among states in cybercrime complaints last year.  Whether the crime is credit card fraud, phishing, identity theft or account stealing, it is essential that you protect yourself from these harmful actions.

Below are some tips to help you stay safe in our cyber-world.  While many of these focus on personal actions that you can take to protect yourself, businesses are constantly bombarded with potential attacks. According to UPS Capital, cyber-attacks cost small businesses between $84,000 and $148,000, with 60% of them going out of business within six months of an attack.  If you are a business owner, make sure your company’s cybersecurity is up-to-date as well.

Keep your software, operating system and browser up to date

It is vital to keep your software updated. Malware can make its way into your computer through software, operating systems, and browsers. Software companies send out updates to help patch holes in the security.

Incorporate multi-factor authentication

Multi-factor authentication is a tool to help keep you secure when logging into a bank account, financial transaction, or other site that uses your personal information. By using multi-factor authentication, you will be required to take an extra step of verifying yourself through a push notification sent to your cell phone or one-time passcode sent to you.

Do not use public charging cords or USB ports

While you may know not to use public wi-fi spots, you may not be aware of the dangers of publicly available charging cords or USB ports. By charging your phone or device by these methods, you are making your devices vulnerable to malware. Malware can then silently steal data from your phone or device.  Take your own cord and plug it directly into the wall.

Do not use the same old passwords over and over

We have all done it. However, do not use the same usernames and passwords for different websites and applications. If a hacker gains access to one account, they can then gain access to other ones as well.  Consider using a password manager to generate different passwords and keep them tucked away for you.

Do not share too much information on social media

Sharing too much information is another common mistake that too many of us make. It’s easy to get excited about trips or experiences and want to share that information on your social media sites.  Beware. A fraudulent scheme could use the information you share online. Enabling strict security and privacy settings may help.

Leverage online statements and paperless options

Ensure you shred all paper documents that contain personal information before you discard them.   Better yet, sign up for online account statements and other paperless options such as eSign and eDelivery. These online tools contain added security features. Ask your banker and financial advisor for more information regarding online options.

As with all facets in life including within the cyber-world, be aware of your surroundings, make smart choices, and verify requests before sending any personal information.

 

Claudia Mollerup-Madsen, Vice-President and Financial Advisor at Morgan Stanley in Houston, was born in Peru, and spent her life as an expat child living around the world.  Claudia graduated from St. Mary’s University in San Antonio with a BA in International Business.  She is fluent in both Spanish and English and has been in the financial advisory sector for 30 years, serving both U.S. and Non-U.S. citizens.

She worked for Merrill Lynch from 1989-1990; Citigroup Private Bank 1990-2001; UBS International 2001- 2009; and moved to Morgan Stanley in 2009.

Claudia has received several awards and honors including being named as one of Houston Business Journal’s 2018 Women Who Mean Business and being honored as a member of the 2019 MAKERS class, which celebrates the trailblazing women of today and tomorrow.   She is also a member of the Morgan Stanley Women’s Advisory Council, an honor chosen by her management team to develop the empowerment and professional advancement of female advisors.

She has been interviewed multiple times as a financial expert on ABC13, Univision, KUHF, NPR, Houston Business Journal and KPRC 950 am.

She is a past board member for The Women’s Resource of Greater Houston and continues to teach financial literacy to women and young women at risk.  Additionally, she is a member of the Houston Livestock Show and Rodeo’s International committee and a USTA Texas region board member, an elite group of tennis advocates promoting tennis.

Claudia Mollerup-Madsen

Vice President and Financial Advisor, Wealth Management Division , Morgan Stanley

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