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5 Financial Moves to Make in Your 40s

Career

It should come as no surprise that different life stages require different financial considerations. As the next installment of this “Money Moves” series (be sure to check out 5 Financial Moves to Make in Your 20s and 5 Financial Moves to Make in Your 30s!) I'll cover money moves to make in your 40s. Here are five top important financial considerations to make:


1. Reevaluate Your Lifestyle Expenses

By the time you're in your 40s and are settled into a career, you've become accustomed to the expenses that come along with being a full-blown adult. With student loans a thing of the past, you’re probably feeling quite comfortable. While in theory, you may be able to afford to travel more often, drive a nice car, and treat yourself to brand-name goods, you are also chipping away from your retirement with this type of spending. No one is saying you need to make drastic cutbacks, but consider toning down your lifestyle a bit in the interest of putting more money towards your retirement, so you can really enjoy life once you reach that stage.

2. Hone In On Paying Off Debt

How great would it be to be able to retire debt-free? While retiring mortgage-free is the goal of many, it makes more sense to focus on other debts first. For example, credit cards, personal loans, and auto loans all tend to have higher interest rates than mortgages. Consider focusing on paying the higher interest debts first, and then using any leftover money to help you determine whether to refinance to a shorter-term mortgage or simply making extra payments towards your existing mortgage. Just be sure to check whether there are any prepayment penalties!

3. Ensure You are Adequately Insured

No one wants to face it, but the truth is the older we get, the higher risk we are at for health complications. While you hopefully won’t be facing any serious health issues yet, now is the time to start considering long-term care insurance, as premiums only get more expensive as you age. Now is also the time to consider taking out a life insurance policy if you haven’t already, since premiums for these also tend to skyrocket once you hit your 50s. This will help ensure your loved ones won’t suffer financially if anything happens to you.

4. Ask for a Raise

If you’ve proven yourself to be an asset to your company, don’t put off asking for a raise or promotion. Make sure to do your research beforehand to determine whether you are being adequately compensated and what your role is worth. Try to avoid lifestyle inflation and instead consider using this extra income to pay down debt and to ramp up your retirement contributions. If you are denied a raise and there is no room for a promotion, you may want to consider looking for a new job or even picking up a side hustle.

5. Meet with a Financial Planner

Now that you have more assets (and expenses), you want to ensure you are still on track to achieve all your financial goals. Meeting with a financial planner can help you get organized and ensure that your money is working for you. Now is a good time to do this because you still have enough time for investments to be effective and to make up for any financial goals you may be behind on.

As always, everyone’s personal circumstances and life stages look different. You know better than anyone what your needs are and what you want your future to look like. As such, these are merely guidelines, but nevertheless it is important to check in with yourself and evaluate your financial wellbeing at this time in your life. Be sure to stay tuned for “5 Financial Moves to Make in Your 50s”!

3 Min Read
Business

Five Essential Lessons to Keep in Mind When You're Starting Your Own Business

"How did you ever get into a business like that?" people ask me. They're confounded to hear that my product is industrial baler wire—a very unfeminine pursuit, especially in 1975 when I founded my company in the midst of a machismo man's world. It's a long story, but I'll try to shorten it.

I'd never been interested to enter the "man's" world of business, but when I discovered a lucrative opportunity to become my own boss, I couldn't pass it up—even if it involved a non-glamorous product. I'd been fired from my previous job working to become a ladies' clothing buyer and was told at my dismissal, "You just aren't management or corporate material." My primary goal then was to find a career in which nobody had the power to fire me and that provided a comfortable living for my two little girls and myself.

Over the years, I've learned quite a few tough lessons about how to successfully run a business. Below are five essential elements to keep in mind, as well as my story on how I learned them.

Find A Need And Fill It

I gradually became successful at selling various products, which unfortunately weren't profitable enough to get me off the ground, so I asked people what they needed that they couldn't seem to get. One man said, "Honey, I need baler wire. Even the farmers can't get it." I saw happy dollar signs as he talked on and dedicated myself to figuring out the baler wire industry.

I'd never been interested to enter the "man's" world of business, but when I discovered a lucrative opportunity to become my own boss, I couldn't pass it up.

Now forty-five years later, I'm proud to be the founder of Vulcan Wire, Inc., an industrial baler wire company with $10 million of annual sales.

Have Working Capital And Credit

There were many pitfalls along the way to my eventual success. My daughters and I were subsisting from my unemployment checks, erratic alimony and child-support payments, and food stamps. I had no money stashed up to start up a business.

I paid for the first wire with a check for which I had no funds, an illegal act, but I thought it wouldn't matter as long as I made a deposit to cover the deficit before the bank received the check. My expectation was that I'd receive payment immediately upon delivery, for which I used a rented truck.

Little did I know that this Fortune 500 company's modus operandi was to pay all bills thirty or more days after receipts. My customer initially refused to pay on the spot. I told him I would consequently have to return the wire, so he reluctantly decided to call corporate headquarters for this unusual request.

My stomach was in knots the whole time he was gone, because he said it was iffy that corporate would come through. Fifty minutes later, however, he emerged with a check in hand, resentful of the time away from his busy schedule. Stressed, he told me to never again expect another C.O.D. and that any future sale must be on credit. Luckily, I made it to the bank with a few minutes to spare.

Know Your Product Thoroughly

I received a disheartening phone call shortly thereafter: my wire was breaking. This horrible news fueled the fire of my fears. Would I have to reimburse my customer? Would my vendor refuse to reimburse me?

My customer told me to come over and take samples of his good wire to see if I might duplicate it. I did that and educated myself on the necessary qualities.

My primary goal then was to find a career in which nobody had the power to fire me and that provided a comfortable living for my two little girls and myself.

Voila! I found another wire supplier that had the right specifications. By then, I was savvy enough to act as though they would naturally give me thirty-day terms. They did!

More good news: My customer merely threw away all the bad wire I'd sold him, and the new wire worked perfectly; he then gave me leads and a good endorsement. I rapidly gained more wire customers.

Anticipate The Dangers Of Exponential Growth

I had made a depressing discovery. My working capital was inadequate. After I purchased the wire, I had to wait ten to thirty days for a fabricator to get it reconfigured, which became a looming problem. It meant that to maintain a good credit standing, I had to pay for the wire ten to thirty days before my customers paid me.

I was successful on paper but was incredibly cash deprived. In other words, my exponentially growing business was about to implode due to too many sales. Eventually, my increasing sales grew at a slower rate, solving my cash flow problem.

Delegate From The Bottom Up

I learned how to delegate and eventually delegated myself out of the top jobs of CEO, President, CFO, and Vice President of Finance. Now, at seventy-eight years old, I've sold all but a third of Vulcan's stock and am semi-retired with my only job currently serving as Vice President of Stock and Consultant.

In the interim, I survived many obstacles and learned many other lessons, but hopefully these five will get you started and help prevent some of you from having the same struggles that I did. And in the end, I figured it all out, just like you will.