investing – Baltimore Magazine

Empowering Women to Take an Active Role in Their Finances

Megan McGaha — Thu, 31 Mar 2022 15:17:55 +0000

We’ve come a long way towards gender equality—but not far enough when it comes to finances. Shockingly, only 20 percent of heterosexual couples participate equally in financial decision-making, according to the most recent Own Your Worth report from UBS Global Wealth Management. In addition, nearly half of married women (48 percent) said their spouse takes responsibility for long-term financial decisions such as investing, financial, and estate planning.

These findings are slightly concerning, given that women live longer than men and are likely to be solely-responsible for managing their finances at some point in their lives whether due to longer life expectancies than men, rising rates of divorce and decreasing rates of marriage. Taking an active role in finances is also especially critical for women because they are amassing greater wealth than ever before. That trend will continue to grow significantly in the years ahead, as women will possess much of the world’s wealth by 2030.

UBS found that during the pandemic, stereotypical gender roles became exacerbated among couples when it came to discussing their finances. According to the report, women defer to spouses because they believe they lack the knowledge (82%), the interest (73%) or the time to participate in financial discussions, as they largely shoulder the burden of household responsibilities (78%).

Yet UBS’ research of 1,500 high-net-worth men and women in marriages or partnerships found that women who were single due to death of a spouse or divorce overwhelmingly recommend that other women focus on their financial situation and get involved today. When women don’t participate in financial discussions, they forfeit their voice being heard for financial decisions that will profoundly impact their entire family.

The good news is that both women and men are striving for better financial equality. UBS’ report found that 96 percent of married women and 98 percent of married men want women to be more involved in financial decision-making.

Steps to becoming an active participant in financial decisions

1. Research and reflect. If you’re a woman seeking to become more involved in your financial planning, the first step is to do your research and know where you stand financially and what you want for your future. Add up your assets and liabilities, like loans, credit, and other debts. Then ask yourself a series of questions to help clarify your financial goals:

What do you want your legacy to be?
Who are the people who matter most to you?
What are your main concerns?
How do you plan to achieve your life’s vision?

2. Start the conversation. After this important step, start the financial conversation with your partner. If you’re in a committed relationship, or consider having a conversation with other trusted loved ones or a professional if you’re looking for additional guidance and you’re not currently in a partnership. Talking about money can be intimidating and even taboo to some couples, particularly before they are married. Men and women come into relationships with different views about spending and saving. However, these discussions are necessary and create a sense of financial partnership. A thorough financial discussion for married or committed couples should include an explanation of big-picture savings, investments, and a joint review of financial documents.

According to UBS’ research, many couples find it effective to designate a regular time for financial discussions each month. It’s a good idea to have a consistent habit of sharing and understanding how money is flowing in and out of your accounts.

3. Set an example. According to UBS’ survey, women tend to repeat the gender roles they saw growing up. As you begin taking a more active role in your finances, you can set an example of what a true financial partnership looks like for children and the younger generation.

The benefits of couples collaborating on their finances are significant. UBS’ “Own Your Worth” report found that 7 in 10 couples said sharing responsibilities in financial decisions would foster a better sense of financial security and make them feel more confident in their financial futures. And 8 in 10 women believe that equal involvement would make them feel more prepared if something happened to their spouse, such as disability, illness, or death.

You don’t need to implement these steps alone. Always remember that there are financial advisors who are equipped to assist you along your journey of owning your worth.

As a firm providing wealth management services to clients, UBS Financial Services Inc. offers investment advisory services in its capacity as an SEC-registered investment adviser and brokerage services in its capacity as an SEC-registered broker-dealer. Investment advisory services and brokerage services are separate and distinct, differ in material ways and are governed by different laws and separate arrangements. It is important that you understand the ways in which we conduct business, and that you carefully read the agreements and disclosures that we provide to you about the products or services we offer. For more information, please review client relationship summary provided at ubs.com/relationshipsummary, or ask your UBS Financial Advisor for a copy

Michele Lippincott is a registered representative of UBS Financial Services Inc. UBS Financial Services Inc is a subsidiary of UBS AG.

Expiration: 3/31/2023 Review Code: IS2201741

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How These Baltimore Startups Are Using Equity Crowdfunding to Raise Money

Renee Beck — Thu, 07 Jun 2018 10:06:00 +0000

With as little as $100, you can own a part of your favorite local company. Thanks to equity crowdfunding, several Baltimore-based startups are turning to user-focused funding options to help accelerate their businesses in exchange for a portion of company ownership.

Traditionally, only accredited investors with greater amassed wealth or income could invest in private companies, but the Jumpstart Our Business Startups (JOBS) Act was created in 2012 to increase investment in small businesses after the recession. Patrick Rife and Nicolas China, co-founders of Baltimore-based photo booth and marketing technology company Pixilated, are running their first equity crowdfunding round through June 27.

“It’s imperative to tap into your tribe,” China says. “Our fans shout our praises and help us spread the word, so activating your customer base is crucial. Our customers validate everything that we’re doing.”

Rather than traditional perks of sites like Kickstarter, like early access to products, an individual investor hopes to see the value of their initial investment appreciate. If the company goes public through an IPO or is acquired by a public company, individual investors can see a return. If the company folds, the entire investment is lost.

Rife and China are using Indiegogo’s platform, MicroVentures, and set Pixilated’s investment minimum at $25,000 with a $100 buy-in per investor. (Should the company not reach its minimum, investors’ dollars will be returned.) To date, the largest individual investment is $5,000 and they feel confident that shareholders will see their investment grow. “If you look at our month-over-month growth and track record, you’ll see operators who have the capacity to take dollars and make them more than they should be,” Rife says.

Erin Lord has known the Pixilated founders for years and her investment is her first in equity crowdfunding. “Any company bound for success starts with the people who lead it and the team they grow. [Pixilated’s team is] rock solid, incredibly creative, and roll-up-your-sleeves hard workers,” she says.

Pixilated isn’t the only Baltimore company turning to equity crowdfunding. Single-serve coffee company MoJoe Brewing Co. is currently hosting a round that closes on June 22—the largest investment is $5,000 to develop its patent-pending portable single-serve coffee maker. Polling and analytics app Arbit saw a $15,000 investment from one shareholder and raised $700,000. And Artichoke, a client-management service for appointment-based businesses, received a $5,000 single investment and almost $52,000 in total funds.

“The idea of democratizing access to capital markets and allowing actual subscribers to become investors was very much in line with our core belief in including customers in the process at every stage [of growth],” Artichoke founder Justin Shelby says.

Equity crowdfunding may not be right for an individual and may not be the right funding route for a company. Campaigns have to be built within the structure of the selected platform, which can mean reworking executive summaries, exposing financial records and creating additional collateral. Sharing that level of information means that competitors can also see financial statements.

“You’re putting everything about the company out there for the world to see,” MoJoe Brewing Co. co-founder Joseph Hyman says. “If you don’t strategize the dissemination of your intellectual properly, competitors could use the information or you may breach your rights to intellectual property protection.”

“The risks of equity crowdfunding are the same as angel investing,” Canty Ventures founder Jedd Canty says. (Canty has invested in Baltimore-based startups Hungry Harvest, ReThink Water and Parkofon.) “You should go into every deal thinking there is a 70-80 percent chance you will lose your entire investment.” Canty notes that equity crowdfunding investors may also pay a fee to the funding platform and for the management of the investment.

Despite the risk, Maryland investors are taking interest. To date, 26 percent of Pixilated’s investments have come from Maryland. Nine percent of its investors are Baltimore-based and MoJoe Brewing Co. has seen as much as 10 percent of its investments from Baltimore. Utilizing the platforms also allows for global exposure—Arbit saw investments from England, Dubai, and India.

A Baltimore connection did play a big part in Arbit’s success. When the co-founders of Baltimore-based investment newsletter, Early Investing, recommended the company’s equity crowdfunding to its readers, Arbit saw $200,000 in investments in one day. “Rather than having a few institutional investors, we now have 1,300 people who are supporting the growth of Arbit,” founder Alex Bullington says. Those shareholders own 14 percent of Arbit’s business.

“I think equity crowdfunding works particularly well in Baltimore because there are a lot of entrepreneurial venues like City Garage and Emerging Technology Centers and venture capital and private equity isn’t as prevalent,” Hylete founder Ron Wilson says. (Wilson is the co-founder of Baltimore-based 180s, which was acquired in 2006.) Wilson shares that Hylete’s equity crowdfunding investors spend up to four times as much on products, becoming true ambassadors of the brand.

Rife and China had hoped to see the investment rise more quickly but know that as much as 40 percent of total funds can come in the final week, according to MicroVentures. “We’re scrappy. We’re from a challenging city to build the type of product that we’ve built,” Rife says. “We’re consummate underdogs.”

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