Bestselling author Natascha Wegelin, also known as Madame Moneypenny, encourages women to take charge of their own finances.
Financial dependence and old-age poverty – problems that primarily affect women. There are many reasons for this. One such reason is that women often shy away from taking charge of their own finances. Bestselling author Natascha Wegelin, also known as Madame Moneypenny, is trying to change that.
Her website not only provides comprehensive information on the subject of money, but also offers a mentoring programme, a 90-day journal, a podcast and a Facebook group aimed specifically at women. Wegelin has also written a bestselling book: “Madame Moneypenny – Wie Frauen ihre Finanzen selbst in die Hand nehmen können“ (How Women Can Take Control of Their Finances) (rororo, 2018). The great thing about her is that she treats everyone she speaks to equally – even those who don’t have a clue about finances feel like she is taking them seriously. The Moneypenny community now includes around 100,000 women, and the Facebook group alone has 37,000 members.
Wegelin, 33, did not originally plan to become a kind of financial guru for women. She studied media management, launching her first company in her mid-twenties – a website for finding spare rooms to rent. What awoke Natascha’s passion for money? A bad experience with a financial adviser. She signed a savings contract that wasn’t right for her, but didn’t realise until it was too late. It was frustrating, but she immediately realised it was almost entirely her own fault. She should never have handed over responsibility to someone else. She asked her female friends what they do with their money, and the results were sobering: “I don’t know what I’m doing either. I should really sort it out sometime.” Or: “My husband handles that.” Natascha even heard such things from well-educated career women. It was clear to her that people needed someone like Madame Moneypenny.
Natascha, why is it more important now than ever that women think about their money?
Because many women today are facing the threat of old-age poverty. This affects an estimated 75 percent of women aged 35 to 50 today in Germany alone. I’m talking about a monthly pension of less than 400 euros. In terms of our professional lives, the reason this primarily affects women can be traced back to two fatal problems: we do not work long enough, and we do not earn enough. This does not only impact those currently on a low income, but also the middle tier. We have to act if we want to live well in our old age.
You say that women should take independent responsibility for their finances. Pensions, investments, accumulation of wealth. But many women can’t even face thinking about it. They either don’t have the time, or they don’t know enough, or perhaps they’re no good with numbers...
I didn’t do well in maths at school, and at university I always avoided numbers and focused on marketing instead. I know now that you don’t need to be good with numbers to make financial decisions. We make them every day. Do I buy that coffee for €2.50 or not?
This alone is not enough to guarantee a pension though. So what are the first concrete steps that people can take to regain control of their finances?
First, consider how much you earn. Many people, both self-employed and in full-time employment, do not know exactly. Second, answer the question: How much do you spend? A lot of people have no idea how much they actually spend. You need to keep a record of your accounts for a few weeks. The magic lies in the difference between your income and outgoings. Only what is left over can be paid into a pension pot. Then, calculate how much you already have tied up in contracts and insurances. Your state pension, perhaps a life insurance policy. Once you have this overview, you can start building up your assets.
By saving the money that is left over?
No, by investing it. I recommend to open a portfolio. Create a savings plan and set up automatic monthly payments. And distribute widely – don’t invest all your money in one type of share. At some point, chances are good that you will be able to start living off the dividends. The important thing is to always think in the long term, as every crisis is followed by an upturn. Don’t start selling if prices suddenly drop. Start by deciding how prepared you are to take risks. After all, you need to be able to sleep at night.
That sounds almost too easy. Where do I find the information I need? Should I get an adviser?
I don’t think that you need an adviser. You just need to gather enough information before you start so you can make an informed decision and avoid feeling like you don’t know what you’re doing. Read books and financial blogs, attend seminars, listen to podcasts. At first it all seems like a different language, and there is a great deal to learn.
Do I need to pay out a big initial sum for an investment to be worth it?
No. If you start today by investing 100 euros each month with a return of five percent, in 20 years you could have saved up to 40,000 euros. If you don’t start for another three years, you’ll only get 31,800 euros, so almost a fifth less. The key is to remember the rule: I am building up my stock portfolio now so that my money can work for me and bring dividends later.
You often talk about “passive investing”. What is that exactly?
Now here comes the good news: you don’t need to follow the stock market news every day, you simply need to understand how the stock exchange works and what makes the market tick. Once you have established your personal strategy, you can let it run for the next 30 years. All you need to do is check in once each year. This is called passive investing.
And what if I want to treat myself in the meantime, for example with a big holiday?
I would save money for a trip like that rather than invest it. You should never invest money if you have a fixed end date. If you need the money on day X it might be worth less at the end than it was to start with. For any savings plan lasting less than 15 years, I would recommend going down the classic savings route. You can simply put this money in an instant-access savings account.
What advice would you give to women who are working either part time or not working at all, because they are looking after their children?
If the man is continuing his career and accumulating wealth while the woman sees a dip in both these things, there should be some sort of compensation so she can continue investing in her pension. Many men aren’t even aware that their wives are no longer paying into a pension fund, or are paying a reduced amount, while they are at home.
Many women shy away from such conversations. This often starts with the subject of a prenuptial agreement.
I think it’s better to spend a few days arguing than – in the worst-case scenario – to spend your old age living in poverty.
Thank you for this interview, Natascha!
Three tips from Natascha Wegelin that will come in handy every day when it comes to managing your finances:
1. Forget all the typical things people believe: “Rich people are stingy”, “Money is dirty”, “You can only lose money on the stock market” – these are just three of the many “laws of money” that you absolutely must ignore. There are whole lists of such phrases online.
2. Set a specific target for 2019: “My top priority is to sort out my finances.” And then invest 10 minutes every day in working on your financial plan. Perhaps read the financial news headlines.
3. Work out a savings strategy: If I simply wait to see what’s left over at the end of the month, there will probably be nothing left. Without saving, I can’t put anything into my pension fund. The trick is to only spend what’s left over from saving. At the start of each month, set aside a certain amount, for example in an instant-access savings account. You can invest from as little as 25 euros a month.
This interview was conducted for the monthly newsletter She’s Mercedes Germany. You can subscribe to the newsletter here.