Douglass: A will is especially important for a single mother. My son likes his father and his father likes him, [but] other people are in charge of the money that [I’ve] left to take care of my son. If mom and dad die in a common car accident, it is crucial if you have children under [age] 18 to appoint the person you want to physically have your children and who you want to run the money that’s going to come with your children. It’s only in a will where you can appoint that.
BE: One of our Twitter followers wants to invest in a hedge fund, but doesn’t want to end up with a Bernie Madoff situation. How do you avoid investment fraud?
Douglass: That was a Ponzi scheme which was effective because he targeted his affinity group. People didn’t really question who or what is Madoff. If you are going to work with a financial person or you’re investing your money with them, you want to make sure that it’s not a guy in a storefront. Do your homework on who is this person, where are you investing, under what circumstances are you turning over this money? What are the written agreements involved? I have a client who gave a $25,000 investment to somebody who said, “Invest with me.” She told me, “It’s a guaranteed return.” I was like, really? That doesn’t sound right. She got nothing and who knows what he did with the $25,000.
Epperson: A red flag: if someone doesn’t answer your questions, that’s not the adviser or the financial professional for you. Because your money, your needs, your preferences are paramount to making the right decisions for your portfolio.
BE: How can women educate themselves and gain a comfort level to ask questions?
St. Claire: Recognizing and identifying your fear. There’s lots of ways to do that. One way is actually writing down what you’re afraid of, writing down your goals, and speaking about it. That’s why statistically there are a lot of women involved in investment clubs because they’re a forum where they can speak about investments. But you don’t need an investment club. You can get a buddy. The moment you start to dispel your fear by speaking about it, by writing it as well as educating yourself, then that starts to dispel the myth that this is scary.
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