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4 Investing Half-Truths + advice for 2023 with Kirk Chishol
4 Investing Half-Truths + advice for 2023 with Kirk Chishol
 

Episode Description: Kirk Chisholm of Innovative Advisory Group and the host of the Money Tree podcast shares some controversial viewpoints that may have grownups questioning the market assumptions we take for granted.

Timestamps & Main Points:

  • 00:00- Introduction

  • 06:56 - Half Truth #1

  • 07:30 - Cash is trash

  • 09:09 - Half Truth #2

  • 11:26 - Half Truth #3

  • 11:52 - Where do people invest?

  • 13:45 - Diversification is volatility management.

  • 15:45 - Half Truth #4


Kirk’s Bio:

Kirk Chisholm is a wealth manager and principal at Innovative Advisory Group, Host of the Money Tree Investing Podcast and all around interesting guy. He is an outside the box thinker who provides a different perspective on many commonly held beliefs in personal finance. He has a rare expertise with alternative investments held in self-directed IRAs which has helped many investors invest in their passion. Kirk was recently recognized as one of the top 100 most influential financial advisors in the US by Investopedia.

 
 

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Full Transcript:


Bobbi Rebell:

Hey grownup friends. There is something I don't talk about publicly that I have decided to start sharing, even though it can be a bit embarrassing, I get digital overload and it stresses me out for good reason. Because when you have so much junk on your computer, because you're not as organized as you should be, because you get caught up in all the things that you have to do. If you don't deal with it, all that stuff on your computer starts to really slow things down and can become a total drag on your productivity. For me, there is nothing worse than finally motivating to get stuff done, only to be derailed by a sluggish computer that is just not cooperating. A little while ago I decided I was going to stop just kind of hoping that things would get better and I was going to deal with it.

I downloaded something called CleanMyMac. It's from a company called MacPaw. I was skeptical but I took a deep breath and I tried it. Long story short, it totally worked. I loved how I could see it work through my files with clear and easy to understand graphics. I could see what was messing things up, and CleanMyMac would ask me for my okay before deleting files, so that something I did need to keep didn't go bye-bye. That was one of my biggest fears. I recently reached out to the company and they are offering 10% off to my financial grownup listeners who want to also get CleanMyMac. To get that 10% off CleanMyMac, you do need to go to my link. It is bobbirebell.com/cleanmymac, B-O-B-B-I-R-E-B-E-L-L dot C-O-M/cleanmymac. And that is all one word. I promise you, you'll be so happy. I want you guys to be in touch with me. Let me know how it goes. You deserve to lower the stress of data overload. Trust me. So worth it.

Kirk Chisholm:

Diversification's not really protecting you. Diversification is volatility management. Risk management doesn't work because the markets have changed in the last 20 years where now big selloffs affect everything including bonds. So that's why you have to be aware. You can't just diversify and say, "I'll be okay." Because this year, stocks, bonds, everything was down similarly. So you really weren't protected by diversifying.

Bobbi Rebell:

Your listening to Money Tips for Financial Grownups with me, certified financial planner, Bobbi Rebell, author of Launching Financial Grownups. Because you know what? Grownup life is really hard, but together we got this.

This interview was like a punch to the gut. I'm still processing it, my friends. As you heard in the clip at the top of the episode, my guest has some very strong opinions about how we see the market, how we approach investing and maybe now with the market having such a rough year, now is the time to take a step back and really reexamine so many of the market truth that we just take for granted, and I'm in there. I take a lot of things for granted, things like buy and hold and don't miss the best 10 days of the market, things like that. Things we talk about and we just assume are great investing advice. But maybe not. Kirk Chisholm runs Innovative Advisory Group. You may also know him as the host of the Money Tree podcast. Kirk has been in the investment advisory business for decades, and he's developed perspectives that you may or may not agree with. But I can assure you, you want to hear. I'm still processing, as I said, a lot of what he said, but Kirk really made me think about things that I took for granted and at least question why do I take them for granted. I have a big takeaway I'm going to save it for after the interview here is Kirk Chisholm.

Kirk Chisholm, you are a financial grownup. I am so happy to finally, finally, finally have you on the podcast. So welcome.

Kirk Chisholm:

Thank you for having me on, Bobbi.

Bobbi Rebell:

For disclosure, the reason I'm laughing so much is this is actually our fourth attempt. Most of our failures were because I have had various illnesses highlighted by a wonderful experience with COVID. We've also had some technical issues. So we are finally here and I'm so excited to get it done and have you on the podcast and I'm going to be on your wonderful podcast, the Money Tree at some point in 2023, you also have a firm called Innovative Advisory Group as well is a great investment option for many people. Tell us a little bit about that and your philosophy and then we're going to get into investing half-truths.

Kirk Chisholm:

Sure. Yeah, absolutely. Thanks Bobbi. Thanks for having me on the show. I love your show by the way, so your listeners are very lucky to have you.

Bobbi Rebell:

Thank you.

Kirk Chisholm:

Yes. So basically I've been in the industry for about 23 years and I started in the broker dealer side at Paine Webber, back when it was Paine Webber, then UBS, and Smith Barney, and then decided to go out my own because I just didn't see the value of the big firms. There was a time where they did have them, but then at everyone was a little bit more the same. So it just didn't have the same value. So what we did is 2008, we've started Innovative Advisor Group with the idea that you could have outside the box strategies. Because most of the industry is very regimented and it's very kind of inside the box. You have to do these things in a certain way and that's not how investing works. Talk to any real estate investor, they put all their money in real estate, they don't touch the stock market. Why should they? Right? If they know invest in what they know as Peter Ellens used to say.

So we focused on investing outside the market, in alternatives inside of retirement accounts. And of course we do traditional strategies, but I think the alternative stuff is really fascinating because some of the best investments we've seen have been on the alternative side.

Bobbi Rebell:

And you do specialize in alternative investments I should say. You mentioned 2008, here we are in closing up 2022 as we record this both very, let's call them interesting years for investing. Certainly challenging in a time when it makes sense to sort of reexamine the things that we sometimes take for granted when it comes to investing. And we're going to get through some of them, which is for example, always buy and hold is the way to go or that printing money always causes inflation. These are sort of what you call investing half-truths, and I'm excited to hear your perspective on them because I like many people do take these things as sort of the way to go and the standard advice that may not always hold up as our world is evolving. So we're heading into 2023, we're going to talk about some of the investing half-truths as you like to call them. The first one is cash is dangerous. Tell us about that.

Kirk Chisholm:

There's a steam in the financial, I don't know, if just the zeitgeist, there's the whole industry talks about how when you have high inflation cash is dangerous. Why? Well, if you have high inflation, your cash should be worth a lot less next year. And then they tried out this chart, which is 100-year chart which says, "Hey, in early 1900s, cash is worth a dollar and now it's worth 3 cents in the dollar." Wow, that's really scary. Well, I don't know anybody who kept cash for 100 years. That to me seems ridiculous, right? So you have people like Ray Dalio who says cash is trash, and over long-terms, he's right. But short-terms, it's different. If you look at up to the third quarter of this year, 2022, the S&P 500 was down 25%. The Nasdaq, 33. 30-Year US Treasuries are down 30%. Safe bonds, right? Down 30%.

Real estate, 30%. Gold, 8.4. How much was your cash down? Zero. If anything it made a little money but you weren't getting much in interest. Call it zero, okay. Being generous. So we had 8.2% inflation at some point. Now at 7.7. If you look at the real returns, which is inflation adjusted, so instead of the S&P 500 being down 25%, it's down 32%. The Nasdaq instead of 33, it's down 41, Treasury is down 38, gold down 16, cash is down 8.2, which one performed the best?

Bobbi Rebell:

Cash.

Kirk Chisholm:

It's still cash, right? And here's the framework you need to take away from this. It's not that cash is good or bad during inflation. It's that inflation affects every single asset class equally. So those math nerds out there, if something affects both sides of the equation equally, you can remove it. So when we look at returns, we don't look at inflation because it doesn't matter, what is the nominal return is really what matters because if cash is the best performer, and you're down 8.2%, that's still the best performer. Just because you have inflation doesn't mean you're going to make money. It just means it's the best of the bad options.

Bobbi Rebell:

Okay. So let's move on to the next investing half-truths. This one I totally buy into. You always have to be invested. Obviously later in life when you're taking money out of your savings, that's different. But for the most part, most of us when we're in the investing accumulation and growth stage, I've always been told, after you have your emergency fund, you need to be invested. The money should not be sitting in cash, to contrary of what we just talked about. Tell us about that. Why is that a half-truth?

Kirk Chisholm:

There's this theme of you always have to be invested. This has been around for decades. And the reason was if you look back in the '80s and the '90s and some of the 2000s, if you were always invested, the market would just go up. It's kind of this buy and hold kind of theme. Oh, you just be invested and it'll continue to go up. And I think what that does is it kind of dumbs down the aspect of investing that's really important, which is understanding what you're in. So if you just think the market's going up 7% or 8% a year because you're in the market, then you're going to be disappointed. So from 2000 to 2013, you basically lost money for 13 years and it was up and down. But January of 2000, till July of 2013, you would've lost 30 basis points a year during that time.

It wasn't until after July that actually you broke even. That's 13 years of lost time. So yeah, you could have been invested in the market but you wouldn't have made money from that start to point. Now, there was a ton of volatility, just like we're having now. And think of it this way. So from the peak of 2007 until the bottom of 2009, you lost about 58 and a half percent, if you were in the S&P 500, okay? That's not a small number. Now, think of you were in cash, how much did you lose? Zero. Right?

Bobbi Rebell:

Right.

Kirk Chisholm:

Now your cash just made you 100% return because you can buy twice as much of that S&P 500 shares as you could have year prior.

Bobbi Rebell:

Okay. But if we told everyone to just put all of your money in cash, for the majority of people, that would not work out well, because the truth is over time it has been proven that your money does increase more if it is invested, especially if it's diversified. One of your other half-truths that I'm obviously segueing into is that diversification manages risk. We've always been told be diversified. And I know many people think that investing in an index is diversification. That's not always true. It absolutely depends on how diversified that index is, right? Tell me why you feel this is a half-truth, that diversification manages risk.

Kirk Chisholm:

Yeah, and I want to address one quick point before we get into that which you mentioned, which is where do people invest? This is really hard. I'm giving you these mental models so that you can understand how the markets work. I'm not telling you to be in cash or stocks. I think that's important because if you're doing one thing and you never change your mind, then you're going to eventually be wrong even if you're right most times. So the whole diversification strategy that you mentioned, diversification, people have always looked at this, actually diversification started as an academic study. It was never intended for Wall Street, but what Wall Street realized is, "Hey, if we have diversification and it reduces risk, then we can sell more mutual funds." That's how this started. This wasn't like an academic proven positive thing that works all the time. It was a theory that people said, "Hey, this looks good enough to sell mutual funds to people."

Diversification actually does a really good job at reducing volatility. Now volatility is this up and down, you see any given day or week, it reduces volatility because in normal times it gives you a smoother ride. Some things go up, some things go down. But overall it's going to have a smoother ride in a direction you hope you're going. Now the problem is when it doesn't work. 2008, 2017, 2020, 2022, there's a difference between risk and volatility. Volatility is this up and down movement. Risk is what we call a permanent impairment of capital, which like 2008, dropping close to 60% is a permanent impairment of capital. Oddly enough, 2020 came back. So that technically would be volatility. But the point is no one wants to lose half their stuff. If you look at 2008, withstanding gold and cash, everything went down 58 and a half percent given a few percentage either way, but 2020 was the same thing.

Virtually everything went down the same. Which means diversification's not really protecting you. Diversification is volatility management. Risk management doesn't work because the markets have changed in the last 20 years. We're now big selloffs affect everything including bonds. So that's why you have to be aware. You can't just diversify and say, "I'll be okay." Because this year, stocks, bonds, everything was down similarly. So you really weren't protected by diversifying. So you just need to be aware of that aspect so that you're not blindly doing this and just saying, "Why did I lose so much money?" It's because it's not a good risk management tool. It's a good volatility management tool.

Bobbi Rebell:

So then what is a good risk management tool?

Kirk Chisholm:

This is where it gets into being hard. I try to think of simple frameworks to give people. The way I've kind of looked at it is you have to have a framework for risk management. Now everyone's different. Some people say, "If it goes down more than 5%, I'm out." But you have to have a more active mentality or you need to find tools like we use Options as a way to manage risk, because I can define the worst case scenario and say, "Nothing will be worse than this no matter what happens in the world." So I like Options as a tool for that, but it's not for everybody. So I'm not saying this is all in one tool for everybody, but you need to find a strategy that is acceptable to you. Now one strategy might be you invest in rental property and that's what you do for a living. You're really smart when it comes to real estate investing.

I have a lot of friends, they do this professionally and they'll always invest in real estate and they know how to manage that. And you're still getting your cash flow, you're still getting your returns, but you need to know what you're investing in. If you're going to be passive, then you need to expect the fact that we could have a period like the early 2000s or the '70s where your returns are lackluster for 10 years.

Bobbi Rebell:

But not everyone can be an expert on those things. Very often we have jobs that there's a reason that all of these investment management firms exist because we have to outsource it. I want to gets back to one half-truth before we run out of time. So an investing half-truth that fascinates me that you talk about is that you have to be invested in order to get the best 10 days. You don't want to miss the best 10 days. I'm not sure if I phrased that correctly, so feel free to correct me.

Kirk Chisholm:

Yeah. So when I started this industry in '99, a whole bunch of wholesalers would go through the office and they would give you all these charts and say, "Here's a chart, you can use this to sell our mutual funds." And it was just weird. But anyway, that's the culture of the broker dealer world. So there's one I kept seeing over and over and over again, is basically if you missed the 10 best days, your performance would be cut in half. Since 1980, if you're invested all the time, your $10,000 would've grown to $700,000. If you missed the 10 best days, it would've been only $341,000. Well that's significant. I should be invested all the time, right?

Bobbi Rebell:

Yeah.

Kirk Chisholm:

I mean, that's obvious.

Bobbi Rebell:

I'm buying in. Sure.

Kirk Chisholm:

However, if you missed the 10 best days, your performance was lackluster. If you were invested all the time, it was much better. However, if you missed the 10 worst days, you would've doubled the performance than if you had just been invested the whole time. So it's what I call of Wall Street half-truth, where they tell you what you need to know to buy their mutual fund or to buy their narrative. But if you actually look at the numbers, it's not completely true, because missing the 10 best days is incentivizing you to buy something and never sell it, which is Wall Street's preference. But if you were to miss the 10 worst days, which is why we focus on risk management, if you miss the 10 worst days, then you're much better off and you don't have periods of big losses, which is if you invested all the time, like we talked about, you could be down 60% in your portfolio.

That is historically okay, that happens. It's not all the time, but it happens. So you just need to look at the full picture. So the half-truths are about showing you the difference between this little piece over here and the whole rest of the picture, which if you understood, you'd say, "Okay, I can make better decisions now because I understand the scope of what's going on."

Bobbi Rebell:

All right, so what's your best advice heading into 2023 for the average investor? Who is not able to time the market, to miss the worst 10 days and to get the best 10 days, because that's just not realistic for most of us.

Kirk Chisholm:

You should start thinking about your portfolio differently. For example, interest rates have been zero for a very long time, except for now. Now you can get three-month treasuries, which are virtually, if you can't say guaranteed about anything, that's as close as you can get to give you a guarantee of safety. So you can get 4% in change on three-month treasuries, which is great. 4% compared to losing 20%, 30% is pretty nice. So I wouldn't say go all in on bonds, but if you're going to have fixed income in your portfolio, you should look at short-term bonds, three months, maybe even six months at the most. But interest rates are going to keep going up for at least the next six months. So you shouldn't go out too far. But if you can lock in 4%, 5% on a bond for three to six months, I think you're in good shape. Savings bonds are phenomenal. You could get 9.6% I think as of October, now it's, I think 6.8. That's a pretty good yield. Now it's only $10,000 per year per person, but that's still a really good rate.

Bobbi Rebell:

A little more with your tax return if you can, if you get a tax refund.

Kirk Chisholm:

Right. So that's something anybody could do and that's like a no-brainer approach. You're getting a good yield, almost no risk. So it's a good approach. But outside of that, I would just say learn as much as you can and think about valuations. If you look back in the '70s, valuations got so cheap that it was blatantly obvious that it was a good time to buy. It didn't matter if it went up or down from there. It was just things like Warren Buffett made all his money. His best returns were in the late '70s and early '80s because it was just so cheap that things were, you could have just thrown a dart at a board and you could have made money. Right now, it is so expensive that things are more expensive now than they were prior to COVID, and then they were expensive. People were talking about how expensive it was prior to COVID and we're still above those.

So the fact that we've gone down 20% to 30% on the markets, we're not even close to where we should be. So be very careful about your investments. Don't feel like you need to be all in. Don't be afraid to be in cash. Just be more conservative with your investments than you think you should be. Because the one rule that if you take nothing away from this, you should take this away. In a bull market, the idea is to make money. In a bear market, the idea is not to make money. The winner of a bear market is the one who loses the least. Now you might think about that, you think you're crazy, but we're in a bear market. Markets have all been down this year. The one who lost the least is cash. And the cash has still lost 8% into inflation, which means it's still down, but it's lost the least.

So don't think about it as, "I need to make 7% this year." Because you could lose a lot of money. Think about it as, "How can I protect myself? What can I do to be more conservative and lose the least until things change?" And if you want to know when things are going to change, I'll give you an easy framework. Watch the Fed. If they start reducing rates, then you can get a green light to start investing. If as long as they're raising rates, you should keep your foot on the brake, not on the gas.

Bobbi Rebell:

All right, thank you so much Kirk. Where can people find out more about you and be in touch?

Yeah, I'm pretty easy to find. You can find me on Money Tree Investing podcast. It's moneytreepodcast.com is the website. Also, you can find me at innovativewealth.com. That's our website and you can pretty much find me everywhere. I'm pretty easy to find.

Bobbi Rebell:

I know the holidays are a time we're all supposed to get excited about, but sometimes it just feels like I can't celebrate until I get through my never-ending to-do list. That includes gifts. It's exhausting. I mean, I love the smile on people's faces when I get them something that's going to be meaningful and that they love. But the truth is it's also really hard and I'm really getting tired of giving people the same old, same old. I mean, I feel like we're finally emerging from this pandemic and I just want something that will get them to smile. So my team and I have been working really hard to up the ante over at Grownup Gear with some super fun new stuff. My personal favorite, the baby bibs and the onesies with phrases like, I can't believe you are the grownup either, and new colors and designs of our top selling generosity line. And for the holidays, if you spend just $50 on any of the items from our generosity collection, we will gift you a $10 gift certificate that you can spend on something to be generous too, well yourself. Just use code holiday, H-O-L-I-D-A-Y. And thanks again to everyone supporting Grownup Gear. Your business helps small projects like this podcast, which remain free for all of you. Happy holidays guys.

So if you follow me on Instagram or on TikTok, you're going to see some of the video clips where I will look very confused and honestly kind of skeptical. I was. I try to be open-minded with what my guests are saying because there's so much that we can learn from them. And by the way, Kirk is a very smart guy. He made his arguments very well. A lot of what Kirk says makes sense. Maybe I'm just stuck in the things that I take for granted. And I like that he has me questioning them. On the other hand, when he talks about the market going down for years and how it would absolutely be better to have been in cash for those years, of course, so we can buy more at a lower price, of course, sure, but I'm just not smart enough or good enough or whatever, and maybe I don't pay the right people who are smart enough, but I can't identify those years.

And so I'm kind of lost, because someone like me, and many of you I suspect, kind of have to default to being in the market in the bad years so that we can be in the market when the good years come along. That said, I love a good discussion and I totally appreciate Kirk's viewpoints. Hopefully my conversation with Kirk got all of you at least questioning the things that we take for granted, which is something we should always be doing.

If you are not already, please go to my website, which is just my name, bobbirebell.com, or go to the show notes and sign up for my newsletter where I share more useful information for financial grownups and of course DM me. Let me know what you thought about this, and every episode. I am @bobbirebell1 on Instagram, and Bobbi Rebell pretty much everywhere else. And of course, also, if you can, please as a little holiday gift to me, consider writing a review of the Money Tips for Financial Grownups podcast on Apple Podcast. Or if you listen on any other platform that has space for reviews, means a lot to me. And by the way, definitely send me a screen grab of it if you do so. So I can thank you. I also want to thank Kirk Chisholm for helping us all be financial grownups.

Money Tips for Financial Grownups is a production of BRK Media LLC. Editing and production by Steve Stewart. Guest coordination, content creation, social media support, and show notes by Ashley Wall. You can find the podcast show notes, which include links to resources mentioned in the show, as well as show transcripts by going to my website, bobbirebell.com. You can also find an incredible library of hundreds of previous episodes to help you on your journey as a financial grownup. The podcast and tons of complimentary resources associated with the podcast is brought to you for free, but I need to have your support in return. Here's how you can do that. First, connect with me on social media, @bobbirebell1 on Instagram and Bobbi Rebell on both Twitter and on Clubhouse, where you can join my Money Tips for Grownups Club. Second, share this podcast on social media and tag me so I can thank you.

You can also leave a review on Apple Podcast. Reading each one means the world to me. And you know what? It really motivates others to subscribe. You can also support our merch shop, grownupgear.com, by picking up fun gifts for your grownup friends and treating yourself as well. And most of all, help your friends on their journey to being financial grownups by encouraging them to subscribe to the podcast. Together we got this. Thank you for your time and for the kind words so many of you send my way. See you next time, and thank you for supporting Money Tips for Financial Grownups.

 

 
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4 top strategies to invest and profit as inflation soars with Jackson Square Capital’s Andrew Graham
4 top strategies to invest and profit as inflation soars with Jackson Square Capital’s Andrew Graham
 

Everyday we are seeing higher prices on everything from gas to the food we eat. But all is not lost. There are opportunities not just to cut costs as a consumer, but also to be smart as an investor. We talk with Andrew Graham of Jackson Square Capital for tips on how to navigate investing with inflation on the rise. 

 
 
 
 

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Full Transcript:


Bobbi Rebell:
Hey, grown-up friends. A big thank you to so many of you that have already bought my new book, Launching Financial Grownups: Live Your Richest Life by Helping Your (Almost) Adult Kids Become Everyday Money Smart.

Bobbi Rebell:
This book was not easy to write because I had to get honest with myself about what was working with my teen and young adult kids and what was not working. And I also had to be prepared to share it with all of you.

Bobbi Rebell:
So, first of all, thank you for your support and your wonderful responses to it. There's definitely some things in there that you may not have been expecting to hear.

Bobbi Rebell:
By the way, I got a lot of help from my money expert friends and also financial therapists and parenting experts. I am really happy with how Launching Financial Grownups came out, even though it really was hard to be, like I said, that honest, and it was a lot of work, but I really loved doing it. And I'm really happy with how it came out.

Bobbi Rebell:
On that note, if you have not already, please pick up a copy of Launching Financial Grownups today. After you do, please share it on social media. Please leave a review on Amazon.

Bobbi Rebell:
Those reviews are super important because the algorithm picks up on them, and that can make the book a lot more visible to more people. So, I truly appreciate it, and I really also appreciate all of your support.

Andrew Graham:
With elevated levels of inflation, with higher bond yields, that's a recipe probably for outperformance in value sectors. And the value sectors presently are: financials, materials, and energy.

Bobbi Rebell:
You're listening to Money Tips for Financial Grownups with me, certified financial planner, Bobbi Rebell, author of Launching Financial Grownups, because, you know what? Grown-up life is really hard but, together, we got this.

Bobbi Rebell:
Hey, grown-up friends. I hope everyone's enjoying spring, wherever you are. It's a great time for a road trip, if you can afford the gas. And that is not the only thing with sky high prices. I mean, looking for a home these days can make even the most tenacious grown-ups feel like giving up.

Bobbi Rebell:
So, where is the upside? Well, there are investment opportunities here, and that's what we're going to talk about today. Our guest is Andrew Graham. He is the founder and managing partner at Jackson Square Capital. And it was really a privilege to be able to bring you his insights that he shares with his high-net-worth clients.

Bobbi Rebell:
One thing to pay special attention to in the interview is what he has to say about the kinds of banks that are going to outperform and why. We also talk about energy and why that could be a place for dividends and a hedge against inflation.

Bobbi Rebell:
Andrew also has some compelling things to say about the housing market and whether buying a home will become more affordable anytime soon.

Bobbi Rebell:
Listen closely. There's a lot to learn from this guy. Here is Jackson Square Capital's, Andrew Graham.

Bobbi Rebell:
Andrew Graham, you're a financial grown-up. Welcome to the podcast.

Andrew Graham:
Thank you. I'm glad to be on the pod.

Bobbi Rebell:
We're so happy to have you. So, let me just give a quick introduction. You're the founder and managing partner of Jackson Square Capital, an investment and financial advisory, out in San Francisco, one of my favorite cities.

Bobbi Rebell:
I asked you to come on because so many of our listeners are concerned about inflation. They go to the grocery store. They go to the gas pump. The prices are just frightening, more and more, but there's some upside to this when it comes to investing.

Bobbi Rebell:
And, so, I asked you to come and talk about some strategies and some sort of mindset that we can take to understand that there are things about inflation that can present opportunity and, certainly, in some ways, at least mitigate some of the damage that we're seeing in our day-to-day consumer life with some wealth management strategies. So, thank you for coming on.

Andrew Graham:
My pleasure. So, I can start with inflation, just really quick. For us, in our world, as an in investment manager, our visibility really extends. It extends six months, for sure. And then, the further you go, the less clear things become, but we can kind of see out nine months and feel pretty good, forecasting nine months forward.

Bobbi Rebell:
Let's start with equity. Where are the best sectors, in terms of equity investments for your money, as inflation continues to be a concern?

Andrew Graham:
Yeah. I think the best places to be, in terms of maybe equity style, rather than growth, sort of tech-centric portfolios, we have ... These are all household names now over the last 12 years. Everybody's made sure they've owned plenty of them. It's been pretty apparent that that where ... that was the only game in town.

Andrew Graham:
But with elevated levels of inflation, with higher bond yields, that's a recipe probably for outperformance in value sectors. And the value sectors presently are: financials, materials, and energy.

Bobbi Rebell:
Okay, so let's break that down. Okay. So, let's start with financials.

Andrew Graham:
Banks have what's called ... make-most-of-their-money, the bulk of their money, on net interest margins. It's the difference between the rate that they borrow or receive their money from the Fed, and the rate that they earn on their loans.

Andrew Graham:
And, so, as short-term loans reset, they don't even need, really, to drive loan growth, although we see the beginnings of that happening in December and, again, here in Q1. They don't need to really get it out of loan growth. They can just reset their short-term loans, as they mature for those people rolling them over, and those loans at higher levels just reflecting where bond yields, short-term bond yields, are.

Andrew Graham:
So, again, deposits, they're not going to pay anything on deposits, let's assume. And they're going to be earning more for their loans. So, their net interest income, which is, again, the bulk of their earnings at a bank, is going to rise. And I see that going on for a while now.

Andrew Graham:
We, at Jackson Square Capital, have a preference for, sort of share takers, when it comes to the banks. And those are generally the regional banks, so not the super gigantic money centers that have been gobbling up community banks over the last, whatever, 20 or 30 years. It's the regional banks.

Andrew Graham:
And the ones that are most attractive, in our opinion, are the ones that are sort of high tech, high touch. And you can see them, just taking share in major markets like this one. So, in San Francisco where we sit, First Republic has been taking share for years. And we just see that continuing with lots of loan growth. So, we like First Republic, and we also like Silicon Valley Bank, also local. Again, taking share, lots of loan growth, lots of private equity cash, on the sidelines.

Andrew Graham:
And as that private equity money gets deployed in investments, they're going to make what they're called capital call loans, which are short-term loans. And, again, those will reset at higher rates.

Andrew Graham:
So, probably the bank that's the most sensitive to interest rates and that benefits the most, is Silicon Valley Bank.

Bobbi Rebell:
Interesting. And the second equity sector that you mentioned to pay attention to is materials. Tell us more about that and why.

Andrew Graham:
So, materials are going to have the pricing power, the ability to benefit from their own pricing power. They have relative ... for sort of fixed costs. Most of these plants are built out. Some of these chemical companies, for example, Olin. There are some big barriers to entry. Some of them are dangerous products to make, but they are very necessary, and they have mostly industrial uses.

Andrew Graham:
So, if we're right, and inflation stays elevated, and the cycle has further to go. That's the recovery cycle, and we think it does, and I'll go into that if you'd like. Then there's more upside for those companies, as they have pricing power. And then there's an industrial, sort of recovery, narrative that goes on as well.

Bobbi Rebell:
And the third area you mentioned was energy.

Andrew Graham:
We expect energy stocks to outperform over the next, that six to nine-month window we discussed, and maybe beyond. There's some structural supply issues going on in the industry where, either from political pressures or pressure from shareholders to return capital, many of these oil and gas exploration and production companies, for example, are being incented to return capital to shareholders, rather than develop new production and drill new wells, for example.

Andrew Graham:
So, we expect, even if ... And we do expect U.S. oil and gas production to rise this year, in 2022, but we don't see it matching demand levels. So, look for elevated WTI crude prices, and beneficiaries there include the majors that pay big dividend yields, like the Exxon and the Chevron of the world, of course. And then in exploration and production companies, maybe like Marathon Petroleum, Ovintiv, also, is a midcap name that stands out.

Andrew Graham:
If oil prices stay just above $65, modeling that out, based on their ... based on Ovintiv's free cash flow generation from the past, they're going to have the ability to pay back the entire market cap of the company within five years. So, lots of opportunity there.

Bobbi Rebell:
Yeah. And I think, with respect to stocks in general, you've talked about the importance of paying attention to companies that give money back to shareholders, whether that be in the form of stock buybacks or in dividends.

Bobbi Rebell:
And that is something that, at the end of the day, money is money, and they're giving people money. That's something that investors should pay attention to.

Andrew Graham:
I think so. I would say, with one qualifier, I think it works best in that energy sector. And the reason is, is that the decarbonization efforts are there for a reason.

Andrew Graham:
By the time you get out, 10 years, and again, I know we wish it was a shorter window, but saying you move out further and further, demand for alternative energy sources actually starts to kind of come together. The demand is there now. The problem is, there's just not the capacity to meet it. And, so, demand chooses the old forms right now. But as the substitutes become available, I think we'll see a shift.

Andrew Graham:
So, in most cases, our preference, when I was talking about banks, I chose two banks that don't return capital to shareholder in any big way. As a matter of fact, they raise capital. And the reason why our preference there, is those are longer-term investments. Both of those banks have outperformed the large cap money centers over the last two decades, and we expect it to continue in the current environment, probably at an accelerated rate because they do have loan growth.

Andrew Graham:
But I think an energy return of capital is a good plan, and it's a good thing, whether it's in the form of dividends or share repurchases and just, what are you going to do with all that free cash flow generation? So, it's got to go to the shareholders. And it's a meaningful way, I think, of hedging against elevated rates of inflation.

Bobbi Rebell:
Let's just touch quickly on real estate because there's so many people frustrated by higher home prices. And look, we have to be realistic. You probably aren't going to make a ton of money if you're buying a home, just to live in or as an investment, anytime short term. But that doesn't mean it's not an area that people should be paying attention to.

Andrew Graham:
Yeah. If you look at the supply and demand within the housing world, there's just ... There is limited supply, and demand has been sort of running at a accelerated clip since there was glimmers of hope the pandemic might be ending.

Andrew Graham:
So, you've seen some sharp upticks in almost all geographic areas in this country. And I don't know if that's going to slow down here in the near term. So, we're kind of modeling in 12% home price appreciation for this year. And we think the economy can withstand that kind of appreciation. So, I don't think the affordability factor is going to mean much here in the near term.

Andrew Graham:
And in the short term, as bond yields rise, inflation's going up, so bond yields are rising. As bond yields rise, there's sort of a get-it-while-you-can attitude on the part of consumers to lock in their mortgage rates now, versus six, nine months, well into the future.

Andrew Graham:
So, you'll see, I think, accelerated pick-up in housing demand as, in the short term, as bond yields have already risen. And I think they can ... there's further room for bond yields to go higher.

Bobbi Rebell:
So, continued frustration for people looking to buy a home, but good news for real estate investors.

Andrew Graham:
I think so. Again, eventually, price cures price, but affordability, even though it's the worst it's been since the global financial crisis, affordability measures, they are nowhere near where they were leading into the global financial crisis.

Andrew Graham:
So, I don't think it's a cycle killing kind of thing, like I said before. And, so, yeah. It's going to be competitive, I think. Home-buying, home shopping is going to be competitive for the near term, and maybe even accelerate here, as bond yields have gone up, and people feel a need to get it done now, rather than later.

Bobbi Rebell:
Thank you so much. Andrew, where can people learn more about you and Jackson Square Capital?

Andrew Graham:
You can go onto our website, of course, which is jacksonsquarecap.com. I write a daily email, which I think helps me stay informed. It's called Morning Notes, and you can sign up there if you'd like to receive it, but happy to be of help today. Thanks for having me on. I've been told I have a face for podcasting, so this is such a [inaudible 00:15:05].

Bobbi Rebell:
You are a lot of fun to have on. Thanks, Andrew.

Andrew Graham:
Anytime.

Bobbi Rebell:
There was a lot to take away from that. You were probably tempted to take notes, but if you're a regular listener, you know don't have to. We always have you covered with show notes and full transcripts on my website. Go to bobbirebell.com. That's B-O-B-B-I R-E-B-E-L-L.com.

Bobbi Rebell:
There, you will, of course, also find information about my new book, Launching Financial Grownups, as well as how to be in touch if you would like me to come speak to your organization. I have both virtual and in-person programs, that you can learn more about by clicking on Work with Bobbi. It's the tab on the upper right corner of my website. I hope to hear from you guys soon.

Bobbi Rebell:
So, I want to hear what you are investing in, as inflation continues to rise. DM me on Instagram @bobbirebell1, and on Twitter @bobbirebell.

Bobbi Rebell:
And, by the way, I did what I didn't think I would ever do. I opened a TikTok account. I am still figuring it out. So, check out my videos, and give me some pointers. The handle is bobbirebell.

Bobbi Rebell:
Big thanks to Jackson Square Capital's, Andrew Graham, for sharing some great insights on investing and helping us all be financial grown-ups.

Bobbi Rebell:
Money Tips for Financial Grownups is a production of BRK Media LLC. Editing and production by Steve Stewart. Guest coordination, content creation, social media support, and show notes by Ashley Wall.

Bobbi Rebell:
You can find the podcast show notes, which include links to resources mentioned in the show, as well as show transcripts, by going to my website, bobbirebell.com. You can also find an incredible library of hundreds of previous episodes to help you on your journey, as a financial grown-up.

Bobbi Rebell:
The podcast, and tons of complimentary resources associated with the podcast, is brought to you for free, but I need to have your support in return. Here's how you can do that.

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Thank you for your time and for the kind words so many of you send my way. See you next time, and thank you for supporting Money Tips for Financial Grownups.

 
Advice, Financial Grownup, Investing, Money, Personal FinanceBobbi Rebell KaufmanAndrew Graham, Investing, Investing Tips, Inflation
Summer Watch Party: Million Dollar Listing New York with special guest co-hosts Paulette Perhach and Erin Lowry.
Summer Watch Party: Million Dollar Listing New York with special guest co-hosts Paulette Perhach and Erin Lowry.

Bobbi and her guests reveal their connections to MDLNY and share exclusive insider secrets and money lessons learned from the Bravo reality tv series focused on high end New York Real Estate agents in the final installment of the financial grownup summer watch party series. 

Summer-Watch-Party-Million-Dollar-Listing-Instagram-with-Erin-Lowry-and-Paulette-Perhach.png

A Little About The Show

Bobbi Rebell:
All right. Well, we have to get into it because I also want to reveal the secret connection to the show that we all have. But let's briefly describe what the show is for the few people that have not seen it. It's been running for a lot of years, but we're going to focus mainly on the present year because it's really awesome. Million-dollar Listing has us following a glamorous group of New York city, real estate agents, as they jostled to get the big deals. And I always find the title funny guys, because I don't think there's ever been a deal where it was close to even just a million. These are mega deals. This season, thankfully, finally, we had a woman join the cast, which besides being obviously long overdue is also where you come in, Paulette.

Paulette Perhach:
Yes. I work with KJ bringing her power and her incredible spirit into the written word for her. I work as her writer, so it's like I get the KJ live show and she's a powerhouse. She's had an incredible effect on me as a businesswoman, just over the last year, working with her.

Bobbi Rebell:
Right and KJ, I should say is short for Kirsten-Jordan who's wonderful and she has been rising through the ranks of brokers. I don't know how she was not well known before this show because she is phenomenal. And through you Paulette, Erin and I have met her right Erin?

Erin Lowry:
Sure have. It was my first real life Bravo celebrity meeting and can I just say, I'm going to disclaimer this right now. I'm a massive Bravo fan. I watch every version of the real Housewives, but I had never watched a million dollar listings before about 24 hours before recording with this podcast.

Bobbi Rebell:
Let's get into the show. First of all, each of you ladies general take on the show.

Paulette Perhach:
So I obviously have been watching it. I have it on my calendar when it comes out. I see how hard KJ works behind the scenes and then to see how it's all glammed up and like, "Oh, I'm throwing a party to sellers." And it looks so easy. So it's really fun to see behind the scenes how hard she's working. I find it inspiring. You do have to control your FOMO at like, "I will never have a pool in my New York City apartment." But in the same way that part of my business plan came from watching Shark Tank, I think we could all learn about sales from watching Million Dollar Listing and just get some fabulous decorating ideas that we can try to recreate an Ikea.

Bobbi Rebell:
Erin.

Erin Lowry:
The negotiating and sales tips and how to create a scarcity environment when one doesn't necessarily exist are really impressive takeaways from the show.

Bobbi Rebell:
On almost every episode in almost every deal the brokers come in and I'm shocked that people sometimes allow themselves to be filmed this way, knowing they're going to be basically talked about behind their back and yet on national TV about their bad taste because they come in and they basically swoop in, get rid of their stuff and stage it, which is insulting to the people that own it. To me, that's a mini-lesson about the illusion and going to something I know Paulette is very good at, which is storytelling because they basically take out the owner's story and put in the story of what they think will be worth the most money.

Paulette Perhach:
Or neutral. Right?

Bobbi Rebell:
[crosstalk 00:08:56]. They neutralize it.

Paulette Perhach:
So you can envision your own story without it being... That 11 Madison, I think it was, "mansion", that was a 3000 square feet inside 3000 square feet outside. That was so gaudy. It had the gold couch. I was deeply stressed watching this episode and yeah, it made sense, where it was like, "It's better to have it empty than to have this gold couch in here."

Bobbi Rebell:
The that I thought about that episode was when Tyler rented the band, I was like, "Couldn't you have just rented couches for a night instead of a band?"

Paulette Perhach:
Well, that's what Ryan Serhand said. He's like "There's chairs for the musicians, but not chairs for the brokers who are here to help you sell your place. What are young doing?"

Bobbi Rebell:
It also to the point of FOMO, I think that it also helps you see behind the curtain in some ways, even though, I'm interested to see what Paulette says about what really goes on behind the scenes more, but it helps you see that so much of what we buy is a marketing illusion. That when they stage an apartment and we see them remake it in relative to the price inexpensive way, although I'm mortified at what they spend to stage. It can be crazy money to stage these things. They're presenting it so it can sell, but there's nothing under there. Half the time the bed doesn't even have a real mattress. It's not even an actual bed and you can't actually use it. It's all for show.

Erin Lowry:
In context for people about crazy amount of money. We're talking between 70 to $150,000 to stage a lot of these apartments.

Bobbi Rebell:
Which is an inconceivable film. If a broker came to me and said that would just walk away.


Money Tips and Lessons Learned

Erin Lowry:
It's interesting too, on the point of what they have to do to the apartment. And I'm really curious, Paulette for you to speak to what they as sellers have to be doing. The clothing that they have to wear, the hairstyles, they have to have the amount of upkeep of their own appearance. You see on the first episode of the season, Tyler, who I assume is a fairly new addition, maybe it was their last season season.

Bobbi Rebell:
Last season.

Erin Lowry:
He talks about the clothing that he's having to buy the amount of money he's having to put into presentation so that his vibe is matching his desired clientele's vibe. And that's a huge upfront cost. Sure, we're seeing that they're getting these commissions of like 250, half a million dollars, but also how much are they having to sink into the business as a whole? And that includes themselves.

Paulette Perhach:
Yeah. So Frederick says to spend 10% of your commissions on your wardrobe, which is a ton. That's crazy.

Bobbi Rebell:
We're making shocked expressions by the way.

Paulette Perhach:
Shocked emoji faces. And actually Kirsten and I are working on a blog post about her deciding like what is spending and what's investing and it is so funny because when you are on the other side of the illusion, this is something that I struggle with personally, as a writer and as an artist and someone who hopes to deal in truth, but also wants to own a house one day. You know that by creating you can make more money and yet how much of your life do you want to spend in illusion and how much... I know for example, if I buy a bunch of fancy clothes and I pretend like my life is all fine and dandy on Instagram and just take pretty pictures all over the place, then I'll get more followers, I'll make more money, but how far do you want to go from that in a personal way?

Paulette Perhach:
So anyway, that's my artist's side of the thing. But yeah, I know there's a lot of pressure to match that vibe and the fashion vibe of your clients, which is a lot. It takes a lot of work and it takes a lot of planning and it's a consideration as an investment and I think more and more as my own business owner, I do realize that the face that I present to the world, I want it to be like the best expression of me and the way that I think about it as a business owner is fashion and preparing myself in a way that says, "Hey, I'm in here. This is me. And I'm in here." I want to like dress to celebrate the day. Someone said, "Dressing well as good manners."` And I really liked that phrasing. So there's so many levels to take it. And yeah, I think that when you were selling to people at the highest level of income, there is pressure to look like them and to look like them cost a lot of money.

Bobbi Rebell:
Erin.

Erin Lowry:
Oh, I agree. I also think it's interesting what of that is a tax deduction and what isn't, when you come to thinking about investing in yourself? I remember a couple of years ago, and if you couldn't tell from my feelings about designing my home, I feel the same way about clothing. I am bad at that. That is just a pain point I know I have. I was never taught how to dress cute fashion is not my thing.

Erin Lowry:
If I could wear athleisure all the time and get away with it socially, I definitely would. But I also realized that's a pain point you can outsource. So a couple of years ago, I hired a stylist to work with to try to learn how to dress to my body.

Erin Lowry:
What kind of brands looked good on me? How to put certain pieces together, working with what I already had in my closet. And what was interesting is because it's for a lot of professional engagements and it was professional clothing, the stylist fee could be a deduction, but the clothing itself could not. So it's always interesting, depending on your job, what you could write off and what you can't. I know people who model, for instance, I think there's certain hair, nail, stuff, type upkeep that they could possibly get a write off on. So I'm curious with luxury real estate, what are the rules for them? What is reasonable right off?

Paulette Perhach:
[crosstalk 00:14:21] have to wear makeup and heels and nice clothes to work, to make more money, that is a cost of doing business and I want to put it on my taxes. I also don't want to be audited.

Erin Lowry:
Yeah, that's a big part of it.

Paulette Perhach:
This last year in 2020, every woman should be able to put makeup on their tax deduction if we're all doing Zoom meetings all the time.

Erin Lowry:
Yes.

Paulette Perhach:
Other people did used to see you in person anyway, I don't know. I think it would be nice. I don't know. That's a whole topic. That's a rabbit hole.

Bobbi Rebell:
That's a whole rabbit hole.

Paulette Perhach:
Get out while you can.

Bobbi Rebell:
What else can you share with us that you've learned from working with KJ about the show and maybe the lessons that she's learned? By the way, she's been on the podcast and she should have been there all along and there should be the fact that there's one woman and we have to make a big deal out of it is stupid. There just should be many women and whatever.

Paulette Perhach:
Yeah because 64% of realtors are women.

Bobbi Rebell:
Exactly. But the fact is it is what it is. For now she came into this group of men, she more than held her own. So can we just talk about that dynamic a little bit and the lessons that maybe women can learn when they are suddenly as unjust as it is brought into a group of men?

Paulette Perhach:
Gosh, I think that there's... Kirsten's a powerhouse, but also just a very kind person and does it in this way where she stands in her power in such an inspiring way to me, and knows her value and is honest with people and direct, but doesn't have to come in throwing blows. It's not about anyone else it's about her and how she brings value to the situation.

Paulette Perhach:
It's like a race against herself and it's all an internal thing. It's not me versus the world, is that the sense that I get with her. And just overall watching the show as someone who is a writer who writes artistically and writes for my business, just seeing how much value storytelling has in sales. It's incredible. Every sale is a story. And for me, with writers who I have such a hard time getting my coaching clients to ask for money. Erin and Bobby, you guys have been such a part of my personal journey, learning to ask for money and learning to ask for what I'm worth. And it's just very cool to see that in this ecosystem where a lot of money is being thrown around that writers are an a central part of it.

Paulette Perhach:
And KJ is awesome because she helps moms see that if they want to have it all, they can't do it all and they need to learn to delegate and to outsource and if they want to be working moms, running their own empire. And so she's open about having a writer. She's not out there pretending, "Oh yes, I do. I have eight arms and I'm irony with my foot as I type out my marketing emails," and things like that. She is so transparent in a way that I think is not only an inspiration, but also a model to follow for other realtors.

Erin Lowry:
I also think an interesting part of her narrative is who you marry has a really big impact on your career. Especially for women, particularly those of us in heterosexual relationship dynamics, where it still tends to people defer to men more often than not. She married somebody who's also in the business, but does a different side of the business so that they can collaborate and be collaborators and push each other, but also work together.

Erin Lowry:
And I thought it was really to hear a little insight to boundary setting between the two of them. In the early episode, they talk about one of the listings that he had, that she said "I was too far along in my pregnancy to take it on when it went to market." And that's just a little boundary that you heard gets set with these two people who clearly work together a lot, but don't work for the same company, do different sides in the real estate industry. But on the flip side, she goes to Tyler's open house at the "mansion" location and her husband's there. Her husband's a developer. He can schmooze with the developer that owned the place. They can go up and see the penthouses that aren't listed. It's a very interesting ecosystem that they can create for themselves too, to really both be powerful in their own right, but also be powerful together.

Bobbi Rebell:
That's a really good point. She also puts her kids in the show. She doesn't hide that she is a working mom. Some of the other people on the show have kids as well and we see them with the moms, primarily taking care of the kids, which is interesting. We got to see a lot more of the cast. I know Erin, you didn't watch other seasons of it, but we will see more of their home life because of the pandemic. And so the final money lesson strategy that I wanted to touch on was adapting to the unexpected because the show was filming while this all happened. They started filming before the pandemic and then on from there. And I met KJ through Paulette during the pandemic and I was like, "Wait, what? You're you're filming now? How is that working? You can't even show real estate." So I was truly impressed as I've been seeing the episodes of how they adapted their businesses in literally an impossible environment. They were not allowed. There were robots there. It was awesome and ridiculous at the same time. What do you guys think?

Erin Lowry:
I jumped ahead to a pandemic episode because first it was very jarring and the opening episodes that no one had masks on. I was like, "What? Who's walking around New York city without a mask what's going on here?" And they make it clear that we're backdating before the pandemic now the pandemic hit. So the two things that I found really intriguing: one, is his name Steve?Stephen? The guy who had the luscious hair that he shaved off

Paulette Perhach:
He's a former mode, by the way.

Erin Lowry:
It was said multiple times. I got that and I watched three episodes. So he went out and diversified immediately by getting his license in other states. Because as soon as stuff started fleeing Manhattan going upstate and all that property was getting hot and heavy. He got his license, I think in Massachusetts and Connecticut, in addition to having it in New York so that he could diversify out, which I thought was really interesting. And then also Ryan Serhand deciding to double down on starting his own company and making the comment about, "When others are fleeing, that's when you really need to put the pedal to the metal." As someone who did take some time off in the pandemic, because I was exhausted, it was a very interesting other side argument.

Bobbi Rebell:
You did take time off, but you also had your third seller come out. Let's just everybody of the Broke Millennials series. Okay. Those were great standup moments. Paulette, what were your standout moments?

Paulette Perhach:
I think it reminded me as a business person to just delve down into what is your core value? And accepting whatever comes our way, even though 2020 seemed like the most unacceptable year in the history of the world as we all know it. For example, I was inspired by it's Sia's choreographer did an online dance class. That was the first time that I think I laughed during the pandemic. Then I started an online writing group that meets every morning. And so just seeing how they didn't let themselves spin out all the brokers on the show and there was just a lot of positive self-talk that you could see because it's so tempting to wallow and I find myself there too.

Paulette Perhach:
But it's so much about resilience and grit is catching yourself in those low moments and being like, "Okay, I accept that this is really hard and I'm going to feel bad for myself for the next 30 seconds." And then, "All right, come on. What can we do? What do we have control of?" It felt like our locus of control shrank down to the size of a pea during 2020, but within that tiny, tiny circle, it's like, "What can I do? And how can I still help people and be of service even during this time when everything changes?" I think as the faster you can get yourself out of that cycle, the more powerful you can be as a business person.

Erin Lowry:
I was going to say, the other thing that I liked seeing, and I didn't get a whole lot of the pandemic episodes, but there were moments of celebrating small wins and I felt on both a personal front and a professional front. And that is a take away I think all of us need to have coming out of the pandemic is just taking moments of celebrating, even if it's something little or that you are deciding as little, celebrate it, be excited about it. Not everything has to be like, "I just sold a $30 million house and got a bonkers commission." Sometimes it can just be the little things that make you feel really good too.

Bobbi Rebell:
I totally agree and I also liked seeing the adaptability of not just the stars of the show, but also their clients and the realness of it, because some of it was to balance out your happy celebration moments, just the genuine sadness of a life that had to change. There's a woman on there who put her heart and soul and a ton of money into decorating her apartment to be basically Palm Beach in New York. It's very, as they like to say "Specific style." I still can't decide if I love it or hate it, but it is very intentional, very overdone to some degree, every little square foot of this apartment is decorated because she intended to spend her life there and for reasons that they don't get into huge details on the show, she has to move to Florida permanently. I was like, "Can't you rent it for a few years?"

Bobbi Rebell:
No. It's very clear this house, this apartment is being sold and she just has such a hard time even getting out of the apartment so that they can show it because she's like, "I need more time with my home." And I think that that reflected this gradual acceptance that we all have had to had at some level of, "Wow, we just have to let some things go that just, we thought were going to happen and the pandemic did change everything and we have to adapt, but it's okay to also be sad and be human." And that story really got to me and it is very much a story as Paulette likes to say.

Paulette Perhach:
It was the morning of the life that she wasn't going to have was clearly what was happening. But flip side, Tyler, who was the broker she was working with in that scene, he has a life coach and you can tell he has a life coach in that scene because he made a comment about, "Our life as a pie and this is just a slice and you're going to Florida and that's just a slice and if you don't like it, you can always come back." And I thought that was such a good way. He clearly was just trying to talk his client down to get her out of the house so he could show this apartment, but he came again with an element of storytelling and also with empathy and compassion. And it wasn't just, "Hey, if you want me to get you the most money GTFO this apartment."

Bobbi Rebell:
I don't know that she cared to get every last dollar out of there. I think she just was coming to terms with this. And it's a very human show in that way, because you do see that even though there's big dollars. They flash the numbers on the screen constantly of what the apartment's asking, what the commission would be and all this stuff. There's still humans in the show. And there's a lot of stories to be told.

Erin Lowry:
I have a question For Paulette. I don't know if you've ever had this conversation with KJ, but how does she feel about just tiny slices of her income flashing on the screen national television?

Paulette Perhach:
We haven't discussed that. She's literally-

Bobbi Rebell:
That would be interesting to know.

Paulette Perhach:
... She's so busy. I would be surprised if she even saw that happened. And it's so funny. A lot of the, they talked about on the Andy Cohen show that a lot of them fast forward through the parts that other people are on. Oh my God. But yeah, they're busy.

Erin Lowry:
So do the housewives.

Bobbi Rebell:
They just watch themselves?

Paulette Perhach:
Yeah.

Erin Lowry:
Yeah.

Bobbi Rebell:
That's so narcissistic. Oh my gosh.

Paulette Perhach:
I think the take away is that people who are making that much money are working so hard. And I know in my soul that I will never work as hard as Kirsten. And so it's like, "You want to be this successful. You want to be at this level. This is what it takes." And I look at it and I'm like, "I'm going to take a nap and then let's regroup." it's a fun thing to see. Yes, this is the payoff, but also pay attention to how hard they're working, because you only see 1% of it on the show and it's bananas.

Erin Lowry:
I love that takeaway. And I would couple it with just seeing tiny slices of what they're having to do to try to have some element of self care, or at the very least keep their appearances where they need them to be. How they get the working out in. How they get some of the cosmetology tweaks that are happening and drinking your junk juice, going to acupuncturist, whatever it is that you need to be doing and anytime any of them are in those "self care moments" and I don't know if it's for camera or what happens. They always take calls. That's the other thing they are always on call. There is no off switch on these folks.

Bobbi Rebell:
Yeah. I love the human element. I love that they, as the show has grown and I think, I don't quite remember, so I could be a little bit off, but I don't think any of the original brokers when it started had families. And so for me as a longtime viewer and fan of the show, I really love seeing how we've traveled through the different seasons and hopefully for many more seasons with KJ and seeing how they've grown, how they've evolved, how they've grown their businesses and how they've grown their families. They come on a lot of these guys as single guys, and now they're all moving into family mode and it's really nice to see. And we've also had Ryan on the show, I should acknowledge as well. He was great. Maybe we'll have him on again in the future. I think that they are all very interesting characters, but also very human to us as they come across. I think Robert does a great job presenting the show and creating storylines.



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Full Transcript:


Bobbi Rebell:
I hope you guys are all celebrating some big adulting milestones this season. And you know what? Finding the perfect gift for those celebrations can be tough. I have the solution over at grownupgear.com. We have adorable hats, totes, mugs, pillows, tees, and seriously, the most cozy and comfortable sweatshirts. They're all on grownupgear.com and all at affordable prices. We even now have digital gift certificates. If you can't decide, use code grownup for 15% off your first order. Buying from our small business helps to support this free podcast. And you know what? We really appreciate it. Thanks guys.

Paulette Perhach:
You want to be this successful? You want to be at this level? This is what it takes. And I look at it and I'm like, "I'm going to take a nap and then let's regroup."

Erin Lowry:
Anytime any of them are in those "self-care moments", they always take calls. They are always on call. There is no off switch on these folks.

Bobbi Rebell:
You're listening to money tips for financial grownups with me, certified financial planner, Bobbi Rebell, author of How to be a Financial Grownup. And you know what? When it comes to money, being a grown up is hard, but together we've got this.

Bobbi Rebell:
Welcome friends to the fifth and final installment of our 2021 Financial Grown-up Summer Watch Party series. Having spent so much time at home in the past year and a half, one thing I've done with my time is, well, watch a ton of TV. And in that time, I have discovered there are a lot of streaming TV gems out there that have some really good money lessons. So I decided to bring on some friends, and discuss and have this summer watch party. So far, we have covered the Ashton Kutcher produced Going From Broke, which is on Crackle. Now I had not known of this network really before, but it is free, so definitely download Crackle or whatever, get to Crackle however you do, on your TV, and check out Going From Broke. It literally had me crying because the people that they have on this show were so good hearted, so well-meaning, and such interesting stories.

Bobbi Rebell:
It's just really well produced. We also talked about the new Netflix series, My Unorthodox Life, featuring entrepreneur Julia Haart, and her family and friends and coworkers. I think this family maybe the next Kardashians, but there was a lot of controversy about the show in the news because of how they presented their former life. There is a lot out there to this. Google it, just trust me. And then also obviously listened to our episode about it, and watch the show, but Google it for the controversy. In our third week of our little Summer Watch series, we got into it with some definite disagreements about whether the money lessons were good lessons, or bad lessons on the Netflix series, Marriage or Mortgage. My co-host, Andy Hill, held his own and we ended up agreeing to disagree. And then last week my husband came on the podcast to discuss and share his take on Jim Belushi's cannabis farm reality TV show on discovery, Growing Belushi, where his family actually had an intervention talking about concerns that the business was taking over his life and he didn't know what he was doing, which is kind of true. If you watch the show, you'll have to see.

Bobbi Rebell:
Sadly though, also we may have been witnessing some of the feelings that led to the recent announcement that Jim Belushi and his wife of 23 years, Jennifer, are splitting up. So we're very sad, and it's interesting. It makes the show all the more compelling to really look at what's going on behind the scenes as, yes, it's a cannabis farm and that's interesting in and of itself, but this is also someone starting a new family business and how it's impacting all of them. All of this to say it's been a great series, and if you have not listened so far, I highly recommend that you check out those episodes. This week, we have a really special show with a take on a show, a reality TV show that I can promise you, you will not hear anywhere else.

Bobbi Rebell:
We cannot possibly do a reality TV series without including a Bravo show, because who really does it better than Bravo, right? So we are going to be discussing Million Dollar Listing New York, MDLNY for the super fans. This is going to be next level because of my guests, and the exclusive information and insights that they bring to the table. Okay. First we have friend of the podcast, Ms. Paulette Perhach. Very famous writer in her own right, here to so many of us because of her F-U fund. But she also has a unique connection to the show that we will share in a moment. And we also have bestselling author, Erin Lowry, also a friend of the podcast, known for her trifecta of books in the Broke Millennial series and so much more, those introductions by the way, ladies do not do justice to all of your accomplishments, but in the interest of keeping the podcast a reasonable length, we will leave it there. Welcome.

Paulette Perhach:
Thanks for having us. I haven't heard trifecta yet. I'm going to start stealing that now.

Bobbi Rebell:
Trifecta. You did.

Paulette Perhach:
I know I did. I just had never thought... I keep saying three-part I'm like, "Ugh, trifecta so much better. Why didn't I wordsmith that?"

Bobbi Rebell:
That? Yeah. A triptych of financial wisdom.

Paulette Perhach:
Well, that's just too advanced. Get your $2 words out of here.

Bobbi Rebell:
[crosstalk 00:05:36] to the art world.

Erin Lowry:
We all come from the art world. Give you a triptych.

Bobbi Rebell:
All right. Well, we have to get into it because I also want to reveal the secret connection to the show that we all have. But let's briefly describe what the show is for the few people that have not seen it. It's been running for a lot of years, but we're going to focus mainly on the present year because it's really awesome. Million-dollar Listing has us following a glamorous group of New York city, real estate agents, as they jostled to get the big deals. And I always find the title funny guys, because I don't think there's ever been a deal where it was close to even just a million. These are mega deals. This season, thankfully, finally, we had a woman join the cast, which besides being obviously long overdue is also where you come in, Paulette.

Paulette Perhach:
Yes. I work with KJ bringing her power and her incredible spirit into the written word for her. I work as her writer, so it's like I get the KJ live show and she's a powerhouse. She's had an incredible effect on me as a businesswoman, just over the last year, working with her.

Bobbi Rebell:
Right and KJ, I should say is short for Kirsten-Jordan who's wonderful and she has been rising through the ranks of brokers. I don't know how she was not well known before this show because she is phenomenal. And through you Paulette, Erin and I have met her right Erin?

Erin Lowry:
Sure have. It was my first real life Bravo celebrity meeting and can I just say, I'm going to disclaimer this right now. I'm a massive Bravo fan. I watch every version of the real Housewives, but I had never watched a million dollar listings before about 24 hours before recording with this podcast.

Bobbi Rebell:
Let's get into the show. First of all, each of you ladies general take on the show.

Paulette Perhach:
So I obviously have been watching it. I have it on my calendar when it comes out. I see how hard KJ works behind the scenes and then to see how it's all glammed up and like, "Oh, I'm throwing a party to sellers." And it looks so easy. So it's really fun to see behind the scenes how hard she's working. I find it inspiring. You do have to control your FOMO at like, "I will never have a pool in my New York City apartment." But in the same way that part of my business plan came from watching Shark Tank, I think we could all learn about sales from watching Million Dollar Listing and just get some fabulous decorating ideas that we can try to recreate an Ikea.

Bobbi Rebell:
Erin.

Erin Lowry:
The negotiating and sales tips and how to create a scarcity environment when one doesn't necessarily exist are really impressive takeaways from the show.

Bobbi Rebell:
On almost every episode in almost every deal the brokers come in and I'm shocked that people sometimes allow themselves to be filmed this way, knowing they're going to be basically talked about behind their back and yet on national TV about their bad taste because they come in and they basically swoop in, get rid of their stuff and stage it, which is insulting to the people that own it. To me, that's a mini-lesson about the illusion and going to something I know Paulette is very good at, which is storytelling because they basically take out the owner's story and put in the story of what they think will be worth the most money.

Paulette Perhach:
Or neutral. Right?

Bobbi Rebell:
[crosstalk 00:08:56]. They neutralize it.

Paulette Perhach:
So you can envision your own story without it being... That 11 Madison, I think it was, "mansion", that was a 3000 square feet inside 3000 square feet outside. That was so gaudy. It had the gold couch. I was deeply stressed watching this episode and yeah, it made sense, where it was like, "It's better to have it empty than to have this gold couch in here."

Bobbi Rebell:
The that I thought about that episode was when Tyler rented the band, I was like, "Couldn't you have just rented couches for a night instead of a band?"

Paulette Perhach:
Well, that's what Ryan Serhand said. He's like "There's chairs for the musicians, but not chairs for the brokers who are here to help you sell your place. What are young doing?"

Bobbi Rebell:
It also to the point of FOMO, I think that it also helps you see behind the curtain in some ways, even though, I'm interested to see what Paulette says about what really goes on behind the scenes more, but it helps you see that so much of what we buy is a marketing illusion. That when they stage an apartment and we see them remake it in relative to the price inexpensive way, although I'm mortified at what they spend to stage. It can be crazy money to stage these things. They're presenting it so it can sell, but there's nothing under there. Half the time the bed doesn't even have a real mattress. It's not even an actual bed and you can't actually use it. It's all for show.

Erin Lowry:
In context for people about crazy amount of money. We're talking between 70 to $150,000 to stage a lot of these apartments.

Bobbi Rebell:
Which is an inconceivable film. If a broker came to me and said that would just walk away.

Erin Lowry:
It's interesting too, on the point of what they have to do to the apartment. And I'm really curious, Paulette for you to speak to what they as sellers have to be doing. The clothing that they have to wear, the hairstyles, they have to have the amount of upkeep of their own appearance. You see on the first episode of the season, Tyler, who I assume is a fairly new addition, maybe it was their last season season.

Bobbi Rebell:
Last season.

Erin Lowry:
He talks about the clothing that he's having to buy the amount of money he's having to put into presentation so that his vibe is matching his desired clientele's vibe. And that's a huge upfront cost. Sure, we're seeing that they're getting these commissions of like 250, half a million dollars, but also how much are they having to sink into the business as a whole? And that includes themselves.

Paulette Perhach:
Yeah. So Frederick says to spend 10% of your commissions on your wardrobe, which is a ton. That's crazy.

Bobbi Rebell:
We're making shocked expressions by the way.

Paulette Perhach:
Shocked emoji faces. And actually Kirsten and I are working on a blog post about her deciding like what is spending and what's investing and it is so funny because when you are on the other side of the illusion, this is something that I struggle with personally, as a writer and as an artist and someone who hopes to deal in truth, but also wants to own a house one day. You know that by creating you can make more money and yet how much of your life do you want to spend in illusion and how much... I know for example, if I buy a bunch of fancy clothes and I pretend like my life is all fine and dandy on Instagram and just take pretty pictures all over the place, then I'll get more followers, I'll make more money, but how far do you want to go from that in a personal way?

Paulette Perhach:
So anyway, that's my artist's side of the thing. But yeah, I know there's a lot of pressure to match that vibe and the fashion vibe of your clients, which is a lot. It takes a lot of work and it takes a lot of planning and it's a consideration as an investment and I think more and more as my own business owner, I do realize that the face that I present to the world, I want it to be like the best expression of me and the way that I think about it as a business owner is fashion and preparing myself in a way that says, "Hey, I'm in here. This is me. And I'm in here." I want to like dress to celebrate the day. Someone said, "Dressing well as good manners."` And I really liked that phrasing. So there's so many levels to take it. And yeah, I think that when you were selling to people at the highest level of income, there is pressure to look like them and to look like them cost a lot of money.

Bobbi Rebell:
Erin.

Erin Lowry:
Oh, I agree. I also think it's interesting what of that is a tax deduction and what isn't, when you come to thinking about investing in yourself? I remember a couple of years ago, and if you couldn't tell from my feelings about designing my home, I feel the same way about clothing. I am bad at that. That is just a pain point I know I have. I was never taught how to dress cute fashion is not my thing.

Erin Lowry:
If I could wear athleisure all the time and get away with it socially, I definitely would. But I also realized that's a pain point you can outsource. So a couple of years ago, I hired a stylist to work with to try to learn how to dress to my body.

Erin Lowry:
What kind of brands looked good on me? How to put certain pieces together, working with what I already had in my closet. And what was interesting is because it's for a lot of professional engagements and it was professional clothing, the stylist fee could be a deduction, but the clothing itself could not. So it's always interesting, depending on your job, what you could write off and what you can't. I know people who model, for instance, I think there's certain hair, nail, stuff, type upkeep that they could possibly get a write off on. So I'm curious with luxury real estate, what are the rules for them? What is reasonable right off?

Paulette Perhach:
[crosstalk 00:14:21] have to wear makeup and heels and nice clothes to work, to make more money, that is a cost of doing business and I want to put it on my taxes. I also don't want to be audited.

Erin Lowry:
Yeah, that's a big part of it.

Paulette Perhach:
This last year in 2020, every woman should be able to put makeup on their tax deduction if we're all doing Zoom meetings all the time.

Erin Lowry:
Yes.

Paulette Perhach:
Other people did used to see you in person anyway, I don't know. I think it would be nice. I don't know. That's a whole topic. That's a rabbit hole.

Bobbi Rebell:
That's a whole rabbit hole.

Paulette Perhach:
Get out while you can.

Bobbi Rebell:
What else can you share with us that you've learned from working with KJ about the show and maybe the lessons that she's learned? By the way, she's been on the podcast and she should have been there all along and there should be the fact that there's one woman and we have to make a big deal out of it is stupid. There just should be many women and whatever.

Paulette Perhach:
Yeah because 64% of realtors are women.

Bobbi Rebell:
Exactly. But the fact is it is what it is. For now she came into this group of men, she more than held her own. So can we just talk about that dynamic a little bit and the lessons that maybe women can learn when they are suddenly as unjust as it is brought into a group of men?

Paulette Perhach:
Gosh, I think that there's... Kirsten's a powerhouse, but also just a very kind person and does it in this way where she stands in her power in such an inspiring way to me, and knows her value and is honest with people and direct, but doesn't have to come in throwing blows. It's not about anyone else it's about her and how she brings value to the situation.

Paulette Perhach:
It's like a race against herself and it's all an internal thing. It's not me versus the world, is that the sense that I get with her. And just overall watching the show as someone who is a writer who writes artistically and writes for my business, just seeing how much value storytelling has in sales. It's incredible. Every sale is a story. And for me, with writers who I have such a hard time getting my coaching clients to ask for money. Erin and Bobby, you guys have been such a part of my personal journey, learning to ask for money and learning to ask for what I'm worth. And it's just very cool to see that in this ecosystem where a lot of money is being thrown around that writers are an a central part of it.

Paulette Perhach:
And KJ is awesome because she helps moms see that if they want to have it all, they can't do it all and they need to learn to delegate and to outsource and if they want to be working moms, running their own empire. And so she's open about having a writer. She's not out there pretending, "Oh yes, I do. I have eight arms and I'm irony with my foot as I type out my marketing emails," and things like that. She is so transparent in a way that I think is not only an inspiration, but also a model to follow for other realtors.

Erin Lowry:
I also think an interesting part of her narrative is who you marry has a really big impact on your career. Especially for women, particularly those of us in heterosexual relationship dynamics, where it still tends to people defer to men more often than not. She married somebody who's also in the business, but does a different side of the business so that they can collaborate and be collaborators and push each other, but also work together.

Erin Lowry:
And I thought it was really to hear a little insight to boundary setting between the two of them. In the early episode, they talk about one of the listings that he had, that she said "I was too far along in my pregnancy to take it on when it went to market." And that's just a little boundary that you heard gets set with these two people who clearly work together a lot, but don't work for the same company, do different sides in the real estate industry. But on the flip side, she goes to Tyler's open house at the "mansion" location and her husband's there. Her husband's a developer. He can schmooze with the developer that owned the place. They can go up and see the penthouses that aren't listed. It's a very interesting ecosystem that they can create for themselves too, to really both be powerful in their own right, but also be powerful together.

Bobbi Rebell:
That's a really good point. She also puts her kids in the show. She doesn't hide that she is a working mom. Some of the other people on the show have kids as well and we see them with the moms, primarily taking care of the kids, which is interesting. We got to see a lot more of the cast. I know Erin, you didn't watch other seasons of it, but we will see more of their home life because of the pandemic. And so the final money lesson strategy that I wanted to touch on was adapting to the unexpected because the show was filming while this all happened. They started filming before the pandemic and then on from there. And I met KJ through Paulette during the pandemic and I was like, "Wait, what? You're you're filming now? How is that working? You can't even show real estate." So I was truly impressed as I've been seeing the episodes of how they adapted their businesses in literally an impossible environment. They were not allowed. There were robots there. It was awesome and ridiculous at the same time. What do you guys think?

Erin Lowry:
I jumped ahead to a pandemic episode because first it was very jarring and the opening episodes that no one had masks on. I was like, "What? Who's walking around New York city without a mask what's going on here?" And they make it clear that we're backdating before the pandemic now the pandemic hit. So the two things that I found really intriguing: one, is his name Steve?Stephen? The guy who had the luscious hair that he shaved off

Paulette Perhach:
He's a former mode, by the way.

Erin Lowry:
It was said multiple times. I got that and I watched three episodes. So he went out and diversified immediately by getting his license in other states. Because as soon as stuff started fleeing Manhattan going upstate and all that property was getting hot and heavy. He got his license, I think in Massachusetts and Connecticut, in addition to having it in New York so that he could diversify out, which I thought was really interesting. And then also Ryan Serhand deciding to double down on starting his own company and making the comment about, "When others are fleeing, that's when you really need to put the pedal to the metal." As someone who did take some time off in the pandemic, because I was exhausted, it was a very interesting other side argument.

Bobbi Rebell:
You did take time off, but you also had your third seller come out. Let's just everybody of the Broke Millennials series. Okay. Those were great standup moments. Paulette, what were your standout moments?

Paulette Perhach:
I think it reminded me as a business person to just delve down into what is your core value? And accepting whatever comes our way, even though 2020 seemed like the most unacceptable year in the history of the world as we all know it. For example, I was inspired by it's Sia's choreographer did an online dance class. That was the first time that I think I laughed during the pandemic. Then I started an online writing group that meets every morning. And so just seeing how they didn't let themselves spin out all the brokers on the show and there was just a lot of positive self-talk that you could see because it's so tempting to wallow and I find myself there too.

Paulette Perhach:
But it's so much about resilience and grit is catching yourself in those low moments and being like, "Okay, I accept that this is really hard and I'm going to feel bad for myself for the next 30 seconds." And then, "All right, come on. What can we do? What do we have control of?" It felt like our locus of control shrank down to the size of a pea during 2020, but within that tiny, tiny circle, it's like, "What can I do? And how can I still help people and be of service even during this time when everything changes?" I think as the faster you can get yourself out of that cycle, the more powerful you can be as a business person.

Erin Lowry:
I was going to say, the other thing that I liked seeing, and I didn't get a whole lot of the pandemic episodes, but there were moments of celebrating small wins and I felt on both a personal front and a professional front. And that is a take away I think all of us need to have coming out of the pandemic is just taking moments of celebrating, even if it's something little or that you are deciding as little, celebrate it, be excited about it. Not everything has to be like, "I just sold a $30 million house and got a bonkers commission." Sometimes it can just be the little things that make you feel really good too.

Bobbi Rebell:
I totally agree and I also liked seeing the adaptability of not just the stars of the show, but also their clients and the realness of it, because some of it was to balance out your happy celebration moments, just the genuine sadness of a life that had to change. There's a woman on there who put her heart and soul and a ton of money into decorating her apartment to be basically Palm Beach in New York. It's very, as they like to say "Specific style." I still can't decide if I love it or hate it, but it is very intentional, very overdone to some degree, every little square foot of this apartment is decorated because she intended to spend her life there and for reasons that they don't get into huge details on the show, she has to move to Florida permanently. I was like, "Can't you rent it for a few years?"

Bobbi Rebell:
No. It's very clear this house, this apartment is being sold and she just has such a hard time even getting out of the apartment so that they can show it because she's like, "I need more time with my home." And I think that that reflected this gradual acceptance that we all have had to had at some level of, "Wow, we just have to let some things go that just, we thought were going to happen and the pandemic did change everything and we have to adapt, but it's okay to also be sad and be human." And that story really got to me and it is very much a story as Paulette likes to say.

Paulette Perhach:
It was the morning of the life that she wasn't going to have was clearly what was happening. But flip side, Tyler, who was the broker she was working with in that scene, he has a life coach and you can tell he has a life coach in that scene because he made a comment about, "Our life as a pie and this is just a slice and you're going to Florida and that's just a slice and if you don't like it, you can always come back." And I thought that was such a good way. He clearly was just trying to talk his client down to get her out of the house so he could show this apartment, but he came again with an element of storytelling and also with empathy and compassion. And it wasn't just, "Hey, if you want me to get you the most money GTFO this apartment."

Bobbi Rebell:
I don't know that she cared to get every last dollar out of there. I think she just was coming to terms with this. And it's a very human show in that way, because you do see that even though there's big dollars. They flash the numbers on the screen constantly of what the apartment's asking, what the commission would be and all this stuff. There's still humans in the show. And there's a lot of stories to be told.

Erin Lowry:
I have a question For Paulette. I don't know if you've ever had this conversation with KJ, but how does she feel about just tiny slices of her income flashing on the screen national television?

Paulette Perhach:
We haven't discussed that. She's literally-

Bobbi Rebell:
That would be interesting to know.

Paulette Perhach:
... She's so busy. I would be surprised if she even saw that happened. And it's so funny. A lot of the, they talked about on the Andy Cohen show that a lot of them fast forward through the parts that other people are on. Oh my God. But yeah, they're busy.

Erin Lowry:
So do the housewives.

Bobbi Rebell:
They just watch themselves?

Paulette Perhach:
Yeah.

Erin Lowry:
Yeah.

Bobbi Rebell:
That's so narcissistic. Oh my gosh.

Paulette Perhach:
I think the take away is that people who are making that much money are working so hard. And I know in my soul that I will never work as hard as Kirsten. And so it's like, "You want to be this successful. You want to be at this level. This is what it takes." And I look at it and I'm like, "I'm going to take a nap and then let's regroup." it's a fun thing to see. Yes, this is the payoff, but also pay attention to how hard they're working, because you only see 1% of it on the show and it's bananas.

Erin Lowry:
I love that takeaway. And I would couple it with just seeing tiny slices of what they're having to do to try to have some element of self care, or at the very least keep their appearances where they need them to be. How they get the working out in. How they get some of the cosmetology tweaks that are happening and drinking your junk juice, going to acupuncturist, whatever it is that you need to be doing and anytime any of them are in those "self care moments" and I don't know if it's for camera or what happens. They always take calls. That's the other thing they are always on call. There is no off switch on these folks.

Bobbi Rebell:
Yeah. I love the human element. I love that they, as the show has grown and I think, I don't quite remember, so I could be a little bit off, but I don't think any of the original brokers when it started had families. And so for me as a longtime viewer and fan of the show, I really love seeing how we've traveled through the different seasons and hopefully for many more seasons with KJ and seeing how they've grown, how they've evolved, how they've grown their businesses and how they've grown their families. They come on a lot of these guys as single guys, and now they're all moving into family mode and it's really nice to see. And we've also had Ryan on the show, I should acknowledge as well. He was great. Maybe we'll have him on again in the future. I think that they are all very interesting characters, but also very human to us as they come across. I think Robert does a great job presenting the show and creating storylines.

Erin Lowry:
The Bravo editors are unmatched, in my opinion, in terms of editing reality content. To a dash, Netflix is starting to do some really solid reality content, but Bravo really created the mold that everyone is just trying to match at this point.

Bobbi Rebell:
Agreed. All right. Thank you so much, Paulette, where can people catch up with you?

Paulette Perhach:
You can follow me on Twitter at @pauletperhach And I also blog about storytelling and writing and business at welcometothewriterslife.com.

Bobbi Rebell:
Wonderful. And you also, by the way, have a growing business supporting writers.

Paulette Perhach:
Yes. So I'm a writing coach and working on creating a program called the PMSA, the profitable MFA, where I help writers lead a profitable and satisfying writer's life.

Bobbi Rebell:
All good stuff, Erin, my friend, what are you up to these days? And where can people be in touch with you?

Erin Lowry:
You can find me most actively on Instagram @brokemillennialblog on Twitter @brokemillennial. The website is brokemillennial.com. The books, all three of them are available. Wherever books are sold and also hopefully your local library.

Bobbi Rebell:
Definitely your local library. We're all an advocate for borrowing books and supporting your library. And by the way, that doesn't mean you can't tell your library to buy the books of your favorite author and in that way financially support your favorite author. That was my PSA. All right. Thanks everyone for listening. Do not forget if you enjoy the show too. Please tell your friends and share on social and tag me on Instagram @bobbirebell1.

Bobbi Rebell:
For show notes, a full transcript of this show add more, go to my website, bobbirebell.com, and just look for the podcast dropdown menu. Thank you for listening everyone. And thank you, Erin Lowry, Paulette Perhach for helping us all be Financial Grown Up.

Bobbi Rebell:
Money Tips for Financial Grownups is a production of BRK Media, LLC. Editing and production by Steve Stewart, guest coordination, content creation, social media support and show notes by Ashley Well, you can find the podcast show notes, which includes links to resources mentioned in the show as well as show transcripts, by going to my website, bobbirebell.com. You can also find an incredible library of hundreds of previous episodes to help you on your journey as a financial grownup. The podcast and tons of complimentary resources associated with the podcast is brought to you for free, but I need to have your support in return. Here's how you can do that. First connect with me on social media @bobbirebell1 on Instagram and Bobbi Rebell on both Twitter and on Clubhouse where you can join my money tips for grown-ups club. Second, share this podcast on social media and tag me so I can thank you.

Bobbi Rebell:
You can also leave a review on apple podcasts. Reading each one means the world to me. You know what? It really motivates others to subscribe. You can also support our merchant shop grownupgear.com by picking up fun gifts for your grownup friends and treating yourself as well. And most of all, help your friends on their journey to being financial grownups by encouraging them to subscribe to the podcast. Together we got this. Thank you for your time and for the kind words so many of you send my way. See you next time. And thank you for supporting Money Tips for Financial Grownups.

Advice, Authors, Financial Grownup, Investing, Money, Role Models, Women Entrepreneurs, Women Role ModelsBobbi Rebell KaufmanMDLNY, Million Dollar Listing New York, Paulette Perhach, Erin Lowry, Broke Millennial, Summer Watch Party, Summer Watch Series, real estate
Financial Grownup Guide: The SPAC trend. What are they and why they have become a huge Wall Street trend?
Financial Grownup Guide: The SPAC trend. What are they and why they have become a huge Wall Street trend?
FGG SPACs- Insta.png

The buzz on SPACs keeps building. Bobbi shares what is driving the trend, what a SPAC is, and what investors need to know about them. 

Pros of SPAC

#1: It lowers the risk of going public. Let’s face it: a lot can go wrong. Companies are worried that market volatility could tank their public debut. Merging with a SPAC gets them a capital influx much faster and easier. 

#2: It’s faster. Space have no financial history- so the only track record is the reputation of the management teams. For a company, merging with a SPAC can get them funding in a few months. The traditional IPO route which involves a lot of paperwork with the SEC can take as much as 6 months, sometimes longer. 

#3: More control over valuation. With a SPAC merger, the company can negotiate a fixed valuation with the sponsors. 

Cons of SPAC

#1: Shady history.  Back in the 1980’s SPAC’s were known as  “Blank Check Companies” The industry was full of fraud, and known for scamming investors. A federal law was even passed to crack down on them. Now there are some guardrails in place- for example, if an investor does not approve of a company that the SPAC is merging with they can get their money back. 

#2: A successful SPAC can be incredibly lucrative for the for the sponsor, to the point where there is a concern that they might merge the SPAC with a less than ideal company just to get their big payday. Oh- and generally they have to make a deal within 2 years- so there’s a ticking clock to make something, sometimes anything, happen. 

#3: Investors should be aware that the company that has gone public by merging with the SPAC has not gone through the vetting process of doing all the financial audits and requirements that happen in a traditional initial public offering. So you have to wonder: what do you not know about the company? In other words, it is easier for the company, but riskier for the investor. 

Some of the links in this post are affiliate links. This means if you click on the link and purchase the item, I will receive an affiliate commission at no extra cost to you. All opinions remain my own.


FULL TRANSCRIPT:

Financial Grownup Guide: What is a SPAC- and why it is such a hot trend on Wall Street

Hi friends!

If you pay attention to the money and investing related news, which you should be, you have probably been hearing about SPACS- which stands for special purpose acquisition company. They have actually been around for decades-but the buzz has really been building lately. Their rep is that they are last resorts for small companies to go public, because they couldn’t raise money on the open market. But that doesn’t really explain why they are having such a big moment right now. 

So here’s what we are going to go over in this episode:

-What is a SPAC

-Why would a company go public using a SPAC rather than the traditional route?

-What are SPACs so popular now- and what role did the global pandemic play in the trend?

-I'll tell you about the shady history of SPAC's

-What are the risks for investors?

Before we get into it- I do want to welcome everyone. If you are new- this is kind of a special episode. I do these solo episodes on occasion where I talk about a money topic- usually something in the news. 

But most of our episodes focus on having a role model as a guest- a financial grownup as we like to say, sharing a money story that had a big impact on their life and then the lessons we can all learn from their experience. We also have them share everyday money tips that we can put to work right away. If you enjoy this podcast I hope you will take a moment to subscribe, and share it with friends or family that you think might enjoy it. One easy way is just to take a screenshot of the show and share it on social media- and please tag me @bobbirebell1 on instagram so I can thank you. 

Back to SPACs. Let’s first go over exactly what a SPAC is- and is not. 

Think of a SPAC as a shell company set up to buy another company- except it doesn’t necessarily know what that company will be. Usually a team of investors raise the money first- but again- very often without a target company. It goes public as a Special Purpose Acquisition Company but it contains no company. All it has is money kept in a trust. 

Then we have companies that need money- and are on the hunt for the right way to get it. 

So to simplify- on one side we have money with no company, and on the other side we have a company, that it looking for money. 

This is different from the more common way for companies to raise big money in the public markets with a standard initial public offering. But that is really complicated- and expensive. There’s a ton of paperwork, financial audits and regulations. There are road shows, and pitch meetings with institutional investors. And it is super risky. Some of the risks the company can control, but the truth is the depending on what is going on in the world at the time the company wants to go public, a lot of how well that company will do- it can’t control. 

But they have become a really big trend on Wall Street recently. 242 SPACs were introduced in 2020, quadruple the number raised in 2019, according to SPAC Insider. The average size of a SPAC in 2020 was $335 million, that is almost  10 times the amount in 2009.

And there are some interesting reasons why that we are going to talk about. 

Reason #1: It lowers the risk of going public. Let’s face it: a lot can go wrong. Companies are worried that market volatility could tank their public debut. Merging with a SPAC gets them a capital influx much faster and easier. 

Reason #2: It’s faster. Space have no financial history- so the only track record is the reputation of the management teams. For a company, merging with a SPAC can get them funding in a few months. The traditional IPO route which involves a lot of paperwork with the SEC can take as much as 6 months, sometimes longer. 

Reason #3 More control over valuation. With a SPAC merger, the company can negotiate a fixed valuation with the sponsors. 

All this has a lot of appeal during the global pandemic, given how much uncertainty there has been in the global markets. It got a lot harder to raise money the traditional way. So SPAC’s can provide a viable option for capital starved companies to access funding. 

This all sounds great- so what’s the catch?

Well first- their shady history.  Back in the 1980’s SPAC’s were known as  “Blank Check Companies” The industry was full of fraud, and known for scamming investors. A federal law was even passed to crack down on them. Now there are some guardrails in place- for example, if an investor does not approve of a company that the SPAC is merging with they can get their money back. 

Second: A successful SPAC can be incredibly lucrative for the for the sponsor, to the point where there is a concern that they might merge the SPAC with a less than ideal company just to get their big payday. Oh- and generally they have to make a deal within 2 years- so there’s a ticking clock to make something, sometimes anything, happen. 

Third: Investors should be aware that the company that has gone public by merging with the SPAC has not gone through the vetting process of doing all the financial audits and requirements that happen in a traditional initial public offering. So you have to wonder: what do you not know about the company? In other words, it is easier for the company, but riskier for the investor. 

Which brings us to why you should be paying attention to the trend. In my opinion- and this is an opinion, we should look carefully at why a company would choose to go public this way. That does not mean it is not a good investment. It just means, it did not go through the traditional red tape. To be clear, many companies go through the red tape, and no one takes the time to read all the details of what they have disclosed to potential investors. 

That said, once a company is publicly traded, as the calendar mandates, it will have to comply with the laws regarding disclosure. So maybe, if you want to invest in a company that used a SPAC to go public, you might consider taking your time, and getting more information before you jump in. 

Before I let you go- a reminder that I am on a campaign to boost financial literacy by giving out free books. If you want to win a book that has been grownup list approved- all you need to do is either do a screen grab of the podcast while you are listening to it - and post it on instagram and tag me at bobbirebell1- or write a review on apple podcasts and email it to us at hello@financialgrownup.com. You could win a book by one of the authors that has been on the show, or some of the merch from the grownupgear store which you can check out at grownupgear.com.

Some of the links in this post are affiliate links. This means if you click on the link and purchase the item, I will receive an affiliate commission at no extra cost to you. All opinions remain my own.

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Business Breakups: How to know when it is time to go- and how to find your next move with author and personal branding expert Jessica Zweig
Business Breakups: How to know when it is time to go- and how to find your next move with author and personal branding expert Jessica Zweig

Jessica Zweig leads the thriving personal branding business: Simply Be. But the author of the new book "Be: A No-Bullsh*t Guide to Increasing Your Self Worth and Net Worth by Simply Being Yourself” only got to this point in her life because she was able to exit a toxic business relationship that brought her personally and financially to rock bottom. Plus she shares an everyday money tip that will help us reach our goals during the pandemic, no matter what obstacles we are facing. 

Jessica’s Money Story:

Jessica Zweig-insta (3).png

My first company was a magazine that I ran called Cheeky for seven years, from 2008 to 2014. I was 26 when I started that company. We launched the biggest platform for women in Chicago. We were the it fashion, food blog in the city. We had 100,000 local readers. And from the outside we were this really sparkly, successful business but on the inside we were very dysfunctional, toxic, and weren't really succeeding. And it was our first business. We were so young. I was 26, she was 24. I didn't know her that well when we went into business which is I think a common mistake people make when they meet someone they really love and they have that spark and then they get into business together and then they're like, "Oh my gosh. Business is like running a family and a marriage. It's such an intense relationship." And we really didn't know each other and so we just made a ton of mistakes. We opened up a ton of credit cards. She was managing the books, I was doing sales. We were so young, so green, so inexperienced and seven years later we had $75,000 worth of debt and I wanted to leave the business and she didn't. And so, I was willing to settle for my half of the debt and she was very, very upset with me for leaving and it was a really tough decision. I loved her, I loved the business. I mean, we were like sisters. We had a love, hate. After seven years of building something great with someone you do have a relationship. So it wasn't an easy thing but I think in many ways she looked at me like I was abandoning her but I was really just following my truth. It had run its course. I couldn't do it anymore. And I did want to clean up my side of the street and pay off my 50% of the debt with a payment plan because that's all I could afford. And I got a lawyer and she got hers and it just got really, really, really ugly and it took about seven, nine months for us to settle it. And I ended up paying 50% of the debt in one fell swoop and I had very little money in savings. I ended up having no choice but to just clear it and start from scratch.


Jessica’s Money Lesson:

Communicate. Be willing to have hard conversations. Money makes people funny. I also would say, don't ever talk about money in those conversations on email or on Slack or even on the phone. We unfortunately can't get together in person so if you Zoom, Zoom, but in-person is best. Having sacred space around conversations, honoring this is uncomfortable, honoring this is important, honoring this is going to make or break our business if we don't talk about it. And we just didn't communicate. Our communication style was so dysfunctional and broken. Because if you do then you won't need to ceremonialize these conversations so much because you'll already be in the same vibration, in the same page.


Jessica’s Money Tip:

So I actually write about this in my book. I have a whole chapter on accountability partners. Because attempting to do anything great and big and significant for your life you need someone to keep you accountable. You need someone to hold you in check. So whether that's writing a book, launching a business, saving money, paying off your debt, having a partner in it is I think the key to the success of it all. And to be frank with you, I'm very fortunate. So the pandemic disrupted my business in a lot of beautiful ways, in a lot of challenging ways. And one of the things I did is I applied for the PPP. I had a finance team at the time that I didn't really fully like, they were fine, and they wanted to charge me $10,000 to apply for the PPP loan which I thought was the most counterintuitive request I've ever seen because we were a small business going into a pandemic applying for a loan and they wanted to charge us money.


Bobbi’s Take:

Financial Grownup Tip #1:

Some of the greatest business and financial success stories come from people who have survived toxic business relationships, and used the lessons from those crushing and painful experiences to thrive in their next venture. - This past week the dating app Bumble went public. Its founder,  Whitney Wolfe Herd started Bumble in 2014..  after she very publicly left the dating app Tinder, where she was a co-founder- after a breakup with another co-founder. She is now the youngest female CEO to take her company public and is worth over a billion dollars. 


Financial Grownup Tip #2:

So many of us are having trouble staying on track to meet our goals during the pandemic- in part because it feels like no one is watching. I mean after all. We can and do literally work in our pajamas. We can quite literally take a nap between meetings. So it is time. Get an accountability partner. Get someone who will be committed to you- and to whom you will also be committed to keeping on track. And if you both aren’t doing that- break up fast and find another accountability partner. Nothing wrong with taking it a little easy, but this more quiet time will come to an end, and the opportunity to get to your goals without so many distractions should not go to waste. 

Get your copy of Be: A No-Bullsh*t Guide to Increasing Your Self Worth and Net Worth by Simply Being Yourself.

Follow Jessica!

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Full Transcript:

Bobbi Rebell: Question for you guys, are we ever going to get back to that whole dress-up for work thing the way we used to? I don't know. But one thing I do know is it is time to get out of those PJ's and those grungy t-shirts and we need to give ourselves an upgraded but still super comfy wardrobe that makes us smile and ideally makes our coworkers, our friends and our family smile as well.

Bobbi Rebell: I have so many friends that I've wanted to send little pick me ups to to let them know it's all good and that includes you. So that's why I created Grownup Gear a fun line of t-shirts, sweats, pillows, mugs, totes, and more that I guarantee will give you and everyone that you're Zooming with all day long a good giggle. Grownup Gear is about saying the things out loud that we tell ourselves silently like when you wake up and you look in the mirror and you think, "I can't believe I'm a grownup either." Or maybe you just want to be honest that you are still a grownup in progress or you want to send a gift congratulating a friend for paying off their debt. The most comfy sweatshirts, t-shirts, tote bags, mugs, pillows, and more give it to yourself or your favorite grownup or almost grownup friend. Go to grownupgear.com to check it out. For discount codes and sales follow us on Instagram at our new handle at @GrownupGear and DM us with any questions. And thank you because by supporting Grownup Gear you help support this free podcast.

Bobbi Rebell: The debt and the brokeness has made me value money today and cherish money and respect money and operate my money with so much more reverence and care than I think I would've if I hadn't reached that rock bottom. You're listening to Financial Grownup with me, certified financial planner Bobbi Rebell author of How To Be a Financial Grownup. And you know what? Being a grownup is really hard especially when it comes to money but it's okay. We're going to get there together. I'm going to bring you one money story from a financial grownup, one lesson, and then my take on how you can make it your own. We've got this.

Bobbi Rebell: Welcome everyone to a new episode of the Financial Grownup Podcast. We share money stories here that had big impacts on our guests lives and of course then they share with us the lessons from them. I'm your host Bobbi Rebell, Journalist, Certified Financial Planner and author of the book How To Be a Financial Grownup. If you're new here welcome. I'm so glad you found us.

Bobbi Rebell: So that clip that you heard at the top of the show was from author and personal branding expert Jessica Zweig. Jessica has a new book out called Be, A No Bullshit Guide to Increasing Your Self-Worth and Net Worth by Simply Being Yourself. I have to say I love that title. The thing about Jessica is that if you don't know her you would never know all the things that she has had to overcome to well be where she is now that included a toxic business relationship that lasted for seven years. The breakup left her with nothing hitting rock bottom at age 33, even having to ask her parents for money just to pay her phone bill. Just when we think we will be hitting our grownup stride you never know what's going to hit us. There is a lot to learn from this remarkable woman and she does not hold back in this interview. Here is Jessica Zweig.

Bobbi Rebell: Jessica Zweig, you are a financial grownup. Welcome to the podcast.

Jessica Zweig: Thank you so much for having me Bobbi. I'm pumped to be here.

Bobbi Rebell: Well, I am pumped to have you here. Your book Be, I'm holding it up by the way, Be, A No Bullshit Guide to Increasing Your Self-Worth and Net Worth by Simply Being Yourself is about to come out and it's your first book. Congratulations.

Jessica Zweig: Thank you so much. You know how much goes into it so thank you for saying that.

Bobbi Rebell: I really enjoyed learning so much about you and what you teach people in the book. What's interesting is you come across as having it all together which you do now I'm going to say but it wasn't always the case. You brought with us a money story that is sadly something many of us can relate to but often don't know what to do with, I should say that often don't know what to do about, and that is finding ourselves in toxic relationships personally and in business in work environments. Tell us your money story Jessica.

Jessica Zweig: My first company was a magazine that I ran called Cheeky for seven years, from 2008 to 2014. I was 26 when I started that company. We launched the biggest platform for women in Chicago. We were the it fashion, food blog in the city. We had a hundred thousand local readers. And from the outside we were this really sparkly, successful business but on the inside we were very dysfunctional, toxic, and weren't really succeeding. And it was our first business. We were so young. I was 26, she was 24. I didn't know her that well when we went into business which is I think a common mistake people make when they meet someone they really love and they have that spark and then they get into business together and then they're like, "Oh my gosh. Business is like running a family and a marriage. It's such an intense relationship."

Jessica Zweig: And we really didn't know each other and so we just made a ton of mistakes. We opened up a ton of credit cards. She was managing the books, I was doing sales. We were so young, so green, so inexperienced and seven years later we had $75,000 worth of debt and I wanted to leave the business and she didn't. And so, I was willing to settle for my half of the debt and she was very, very upset with me for leaving and it was a really tough decision. I loved her, I loved the business. I mean, we were like sisters. We had a love, hate. After seven years of building something great with someone you do have a relationship. So it wasn't an easy thing but I think in many ways she looked at me like I was abandoning her but I was really just following my truth.

Jessica Zweig: It had run its course. I couldn't do it anymore. And I did want to clean up my side of the street and pay off my 50% of the debt with a payment plan because that's all I could afford. And I got a lawyer and she got hers and it just got really, really, really ugly and it took about seven, nine months for us to settle it. And I ended up paying 50% of the debt in one fell swoop and I had very little money in savings. I ended up having no choice but to just clear it and start from scratch. Bobbi Rebell: When you look back were there red flags that you should have spotted in the relationship, in the business in terms of the skills that you both brought?

Jessica Zweig: From day one. I mean, there were massive red flags. I think I realized three months in just how different we were but we were young and we were so naive and we both really loved this business. This magazine Cheeky was our baby. And so I didn't want to give it up and she didn't want to give it up and at the core there was a magic connection with us. We wouldn't have created what we created if there wasn't that synergistic spark. And we both loved each other to a degree which was what made it so difficult.

Jessica Zweig: But there were red flags and it was honestly one of the most toxic relationships of my life. I mean, we were together for seven years and we were water and vinegar. We were just totally different people. And I'm not saying I was better or she was worse, we were just different. I've come to so much peace and love and honestly forgiveness for myself first in the way that I showed up in that relationship as much as her and how she showed up in the relationship which I think has really been a huge key to me soaring in the last few years because I really did my own work.

Jessica Zweig: I think it's so easy to point fingers at people when they burn us or they hurt us or they come after us. There's that expression when you point one finger at someone, I mean do it, you're pointing three back at yourself. So you really do have to look at yourself in any sort of situation but when it comes to money it's especially loaded and I could still be angry, I could still be bitter, I could still be resentful. I don't feel any of those feelings. And it was the greatest learning lesson of my life. I applied all of those mistakes, all of those failures to simply be and simply be is so successful and it wouldn't have been unless I had that seven year chapter and run of making all of those mistakes.

Jessica Zweig: So, I think that everything happens for a reason and I feel like the debt and the brokenness has made me value money today and cherish money and respect money and operate my money with so much more reverence and care than I think I would have if I hadn't reached that rock bottom. So, everything happens for a reason and divine order. It's happening for you not to you even though it can really feel the opposite in the moment. I wouldn't be who I am without that business and that failure.

Bobbi Rebell: Can you me a specific example of something that happened that highlighted your differences? It doesn't have to be your biggest fight or something but something especially money related that you just never agreed on.

Jessica Zweig:I think we were both pretty irresponsible with the way we spent the business's money. I really wanted to grow it and scale it and exit. I wanted to be that type of entrepreneur and she wanted it to be a more lifestyle business. If you're going to go into business with anyone whether it's a business partner or someone on your team or your leadership team to really understand those nuances and get everyone on the same page. Because it sets the foundation for the type of business and the rate in which you want to grow and how you want to operate and who you want to do business with so, so much. And we just didn't have the skills. We were so young. We didn't have the tools to talk about money and business at that level. We were green as grass. So, of course it netted out the way that we netted out. And we also were really done when we opened up our credit cards. She was the personal guarantor on the credit cards. It was just mistake, after mistake, after mistake.

Bobbi Rebell: Yeah. I love that you're talking about the fact that it is so hard to talk about money and it sounds like you guys didn't have a lot of talks about money and how you were going to structure your firm and how you were going to fund it before you started it. What is the lesson for our listeners as we put it all in context?

Jessica Zweig: Communicate. Be willing to have hard conversations. Money makes people funny. I also would say, don't ever talk about money in those conversations on email or on Slack or even on the phone. We unfortunately can't get together in person so if you Zoom, Zoom, but in-person is best. Having sacred space around conversations, honoring this is uncomfortable, honoring this is important, honoring this is going to make or break our business if we don't talk about it. And we just didn't communicate. Our communication style was so dysfunctional and broken and I think actually way, way up and make the right decision to partner with the right people in the first place. Because if you do then you won't need to ceremonialize these conversations so much because you'll already be in the same vibration, in the same page. And yet money makes people funny no matter what and so you really have to recognize that in yourself and in the others and bring as much consciousness and integrity to those kinds of negotiations, conversations, whatnot.

Bobbi Rebell: I could talk to you forever about this but I want to get your everyday money tip because it's something that I am already implementing for 2021 and that is having accountability, having an accountability partner. Talk about that.

Jessica Zweig: Yeah. So I actually write about this in my book. I have a whole chapter on accountability partners. Because attempting to do anything great and big and significant for your life you need someone to keep you accountable. You need someone to hold you in check. So whether that's writing a book, launching a business, saving money, paying off your debt, having a partner in it is I think the key to the success of it all. And to be frank with you, I'm very fortunate. So the pandemic disrupted my business in a lot of beautiful ways, in a lot of challenging ways. And one of the things I did is I applied for the PPP. I had a finance team at the time that I didn't really fully like, they were fine, and they wanted to charge me $10,000 to apply for the PPP loan which I thought was the most counterintuitive request I've ever seen because we were a small business going into a pandemic applying for a loan and they wanted to charge us money.

Jessica Zweig: And so, I brought in my husband who is a financial advisor, as well as you are. And his business had kind of slowed down, he couldn't go out and network, we were quarantining. And he's like, "Jess, I'll help you with the PPP." He took one look at my finance team and was like, "Dude, I can do this better." And so I fired my finance team and I hired my husband. And my husband and I have always obviously been partners and accountable to each other because we're married but bringing him into my business...

Jessica Zweig: He's now my CFO, he helps me run the shop, saving money, ensuring that our P and L's are always balanced, making sure we're net profitable. Having someone that I trust, obviously I trust no one more than my own husband but he has really allowed me to fly as the CEO because I know that he's got things covered. And we operate like a legit finance CFO to CEO. We take weekly meetings. He has an agenda. We run through every money in money out, hiring, investments, savings. We don't have any debt in our business. It's a really powerful person, obviously it's my own husband. But if you can have someone to pulse check you, to support you, to believe in you, to honestly be able to see the forest from the trees more than you can in your own project or business or money endeavor that is so key.

Jessica Zweig: And then another thing that I have done that has really allowed me to get out of debt and save money and feel really, really peaceful and abundant and my husband has helped me with this is we've set up an account. I call it my island account and it's a bank account we can only put money in. And if I needed to take money out I'd have to drive all the way across town in the worst hours, whatever. It's my island account. I can only send money to it, it can only grow. And I'm stacking my cheddar as my accountant once told me and my husband helps me ensure that money is being sent to that account every single month and that we're totally able to send that level of money over to that account and that's really grown our savings. My husband and I sleep well at night because of it.

Jessica Zweig: And so those are the key hacks that having my husband and having that account has changed honestly my financial wellbeing more than my finances but more of my financial wellbeing, which I think is key to vibrating at that level of abundance and attracting more.

Bobbi Rebell: That's such great advice. There's also a lot more great advice and I'm picking up your book now even though I know we're on audio and your book, okay I'm going to read the title Be, with a period, A No Bullshit Guide to Increasing Your Self-Worth and Net Worth by Simply Being Yourself. And I love the yellow cover. Yellow became one of your themes in the book so it transcends so much about you and your sunny personality. Tell us briefly about the book.

Jessica Zweig: So the book is a personal branding book. It's going to walk you through my trademark methodology of how to build your platform, the platform of you. Whether you work for yourself, or you work for someone else, or you want to one day work for yourself, having an understanding of what makes you you is an invaluable asset that you can take with you no matter what your job title is. That's number one. It's going to teach you tactically step-by-step how to do that from messaging, to strategy, to content, to social media, to PR.

Jessica Zweig: However, it is a personal empowerment book in fact disguised as a business book. Because I think at the core most people feel afraid to do that and to put themselves out there. And I say that my book is the permission slip and the reminder that you are worthy to be seen and to shine and to have everything you ever want. And it's my own journey in fact as well and my uncovering that truth for myself. And so, I'm right along with you throughout the whole book and you're going to take away so much tactical knowledge but at the end of the day I hope it inspires people to stop playing small and stop apologizing for their authentic amazingness. And that's what my book Be is about.

Bobbi Rebell: One of the recommendations in the book is to keep your social media and all of your public identifying names, et cetera, very consistent. So let's end with you telling us where people can find you on all of the social media because I know you keep it easy.

Jessica Zweig: I walk the talk as I say I drink my own Kool-Aid. So yes I am at Jessica Zweig on Twitter, on Facebook, on Instagram, on LinkedIn, jessicazweig.com. You can also go to simplybeagency.com which is my company's website and find me. I'm really, really, really easy to find. I'm out there. So please come and say hi.

Bobbi Rebell: Perfect. Thank you so much for joining us.

Jessica Zweig: Thank you so much for having me. This was amazing.

Bobbi Rebell: Here we go my friends Financial Grownup tip number one, some of the greatest business and financial success stories come from people who have survived toxic business relationships like Jessica, and like Jessica they use the lessons from those crushing and painful experiences to thrive in their next venture. This past week the dating app Bumble went public and its founder Whitney Wolfe-Herd started Bumble in 2014 after she very publicly left the dating app Tinder where she was a co-founder after a breakup with another co-founder. And she's talked about it a lot, it was a toxic relationship for sure. She is now the youngest female CEO to take her company public and worth over a billion dollars. What a great story.

Bobbi Rebell: Financial Grownup tip number two, so many of us are having trouble staying on track to meet our goals during the pandemic in part because it feels like no one's watching. I mean, after all we can and do literally work in our pajamas, certainly the off-camera part. We can quite literally take a nap between meetings. So it is time, get an accountability partner like Jessica. Get someone who will be committed to you and to whom you will also be committed to keeping on track. And if you both aren't doing that well break up fast and find another accountability partner who's a better fit. Nothing wrong with taking it a little easy but this more quiet time will come to an end and the opportunity to get your goals without so many distractions should not go to waste.

Bobbi Rebell: One way to get motivated, get out of those PJ's. Realistically, I know we aren't getting dressed up but have some fun with your pandemic wardrobe. That's what I know I needed when I came up with a concept for Grownup Gear it is all about celebrating wherever we are in our journey to being grown ups which never really ends let's be honest. Check out the designs on my website, bobbirebell.com. Click on shop or just go directly to grownupgear.com. And please be in touch. DM me what you want more of on this podcast. I love your feedback. I put discount codes for Grownup Gear on my Instagram, which by the way is Bobbi Rebell one. And we did just start a Grownup Gear Instagram. We don't have a lot of followers so please come check it out. That's at @GrownupGear on Instagram.

Bobbi Rebell: So big thanks to Jessica Zweig, author of Be, A No Bullshit Guide to Increasing You Self-Worth and Your Net Worth By Simply Being Yourself. Everyone check out the book and thanks again to Jessica for helping us all be financial grownups. Financial Grownup with Bobbi Rebell is edited and produced by Steve Stewart and is a BRK Media production.

Advice, Authors, Business, Career, Entrepreneurs, Family + Relationships, Financial Grownup, Financial Grownup Guides, Financial Independence, Investing, Money, Personal Finance, Podcasts, Startup, Women Entrepreneurs, Women Role ModelsGuest UserJessica Zweig, Business Breakup, simplybe, money stories, money, finance, saving, spending, stocks, debt, credit cards
Financial Grownup Guide: Gamestop lessons and reflections for investors
Financial Grownup Guide: Gamestop lessons and reflections for investors

Gamestop's meteoric rise and fall, and the roles Reddit, Hedge Funds, and Robinhood played in it, have many lessons for financial grownups. Bobbi explains what happened, and reveals what new data is showing that many news reports initially got wrong. 

In this episode, you will learn:

The real final gamestop insta.png

-What actually happened?

- Why did Gamestop stock surge?

-How does short selling work?

-What goes on in the online forums (like reddit’s Wall Street Bets)?

-What is a short squeeze?

-How FOMO (Fear Of Missing Out) played into things.

-Why did brokerages like Robinhood put the brakes on trading?

-Who got hurt and why?

-What did we learn from this?

Takeaways:

#1 - While everyone loves a great David vs Goliath story- be aware that sometimes there is more to the story.

#2 - Trading stocks is really risky and this kind of trading-where you are buying a stock not based on any connection to the actual business of the company- is not investing - it is gambling. So only use the money you would take with you to a casino. 

#3 -Beware of the hype and think twice before getting on the bandwagon. Yes, a lot of small investors are out there bragging about how much they made off Gamestop and other similar situations. But a lot of people lost money, or are holding stock that is well below what they paid and will likely sell it at a loss. 

Full Transcript:

Bobbi Rebell:

This is going to be a special solo episode and we are going to talk about the Gamestop phenemonon that happened recently that has gotten a lot of you interested in how the stock market works, how the companies that hold the money you invest in stocks work, and most of all, how you can make money by buying stocks. 

Here on the financial grownups podcast we normally share money stories that impacted our lives and the lessons from them, or tips and tricks to improve your financial situation but today we’re breaking format because what happened recently with Gamestop, and a few other stocks, and Robinhood and some other brokerage firms really changed the game for a lot of people. 

Here’s what we are going to cover:

What actually happened- why did Gamestop (which is a company that wasn’t doing well). suddenly have a surging stock?

How does short selling work?

What goes on in the online forums, like reddit’s Wall Street Bets?

What is a short squeeze?

FOMO- fear of missing out- how that played into things…

Why did brokerages like Robinhood put the brakes on trading?

Who got hurt and why?

What did we learn?

So let’s start with what happened. Gamestop’s actual business, which is primarily selling video games in brick and mortar retail stores, was not doing well. So a lot of professional investors, including hedge funds, were betting against it, doing something called short selling. And by the way- this happened recently with a few stocks but we’re just going to talk about Gamestop here. 

What is short selling. Essentially- the investor goes to the broker and borrows the stock. They turn around and sell that stock to someone else. So they don’t have the stock, but they do have to return it to the broker. The goal is for the stock to go down between the time they sold it to someone else, and the time they have to buy it back, to return it back to the broker who lent it to them. Short selling is super risky because if the stock goes up- it absolutely has to be bought to give back to the broker. Since there is no limit to how high a stock can go, there is no limit to how much the short seller can lose. In other words- don’t go there unless you really know what you are doing. 

While this was happening, the stock started getting talked about on reddit, in particular on a page called Wall Street bets. They noticed that the stock was heavily shorted- and that there was a big change at Gamestop- some new members of the board. One in particular, Chewy Co-founder Ryan Cohen got noticed because he had a lot of digital experience- something Gamestop really needed. That combination got the Wall Street Bets folks to pile into the stock and cause it to rally. 

Next topic: The short Squeeze. Remember all those Wall Street professionals that had shorted the stock? As the stock rose, they were seeing that the price to re-buy the stock they had shorted was skyrocketing and they had to cover their bets.. by buying the stock… which set in motion this seemingly accelerating rise in Gamestop stock-

Then came the FOMO- fear of missing out. As news reports of this were coming out, more and more people wanted in on the action, and things started to get out of hand. Plus the whole thing took on a larger meaning because of media reports that  all these little guys banding together- there were more than 5 million folks on that reddit page- and the word was they were beating these big professional hedge funds. Everyone was talking about it. 

Now let’s talk about the brokerage firms and one in particular that gets a lot of attention: Robinhood. Amateur investors can go on Robinhood and trade for free. Robinhood has had it’s share of controversy in the past, but that’s a whole other podcast. In this case, Robinhood started to get worried- and, citing extreme volatility stopped allowing it’s customers to buy the stock- though they could still sell it. So keep in mind, Robinhood’s customers are generally individuals. The professional investors who were not dependent on Robinhood could keep buying and selling. The optics were not good. Some people thought they were doing it to protect the Wall Street pro’s from losing too much money. Politicians cried foul, and people lawyered up. 

As the dust settles - there is another dramatic twist. University of Chicago law professor Todd Henderson, says the pros saw what was happening and basically piggy backed on the little guys. 

He studied the data from that time. And while there was a burst of retail activity-  he says in a cnbc piece- eventually it was actually the big guys- against the other big guys. According to Henderson, hedge funds purchased stock and held it. This created fewer shares for short sellers to borrow in the market, and that squeezed the number of possible shares available to be loaned, making it harder for short sellers to bet against the stock. The desperate short-sellers needed to find new shares to borrow but supply got constricted.. If you are not following at this point- that’s kind of the point. It’s complicated. And it is not for amateurs. 

And that brings us to who got hurt and why. So yes, hedge funds and one in particular got hurt. As I write this, Gamestop’s gains have almost all disappeared, so a lot of people who bought it will likely sell it for a big loss. And they probably won’t talk about it. Especially with all the bragging going on about how much their friends and family made on the rise up- assuming they sold it at a profit. FOMO can cost you. 

So finally - what are the lessons to take away from all this?

Lesson #1 - while everyone loves a great David vs Goliath story- be aware that sometimes there is more to the story.

Lesson #2 - Trading stocks is really risky and this kind of trading-where you are buying a stock not based on any connection to the actual business of the company- is not investing - it is gambling. So only use the money you would take with you to a casino. 

Lesson #3 Beware of the hype and think twice before getting on the bandwagon. Yes, a lot of small investors are out there bragging about how much they made off Gamestop and other similar situations. But a lot of people lost money, or are holding stock that is well below what they paid and will likely sell it at a loss. 

As for my take, it’s never a good feeling to know that many well meaning people took risks they didn’t understand and lost money, I am glad that this got so many non-investors interested in learning more about the stock market. And even though that interest was motivated by momentum driven trading, my hope is that eventually that will evolve into learning about thoughtful, intentional and strategic investing, that will help all of us reach out grownup financial goals. 

Thanks everyone for joining me- for more money tips and advice- plus lots of giveaways please go to my website bobbirebell.com and sign up for the grownup list. 

I love bringing you this podcast and it is and always will be free to you but there are a number of ways that you can support the show if you enjoy it. 

Number one- tell a friend about it. 

Number two- take a screenshot and share on social media

Number three- write a review on apple podcasts

And finally- do a little responsible shopping on my grownupgear.com website. It’s got t-shirts, sweatshirts, mugs, tote bags and more- all tied to being grownups. The products make great gifts, for friends, family and co-workers, and even for yourself. 

Thanks everyone, for joining me and for being financial grownups. 

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Advice, Business, Entrepreneurs, Financial Grownup, Financial Grownup Guides, Financial Independence, Investing, Money, Personal FinanceGuest Usergamestop, wall street, stock market, robinhood, stocks, reddit
It’s a Pandemic- Let’s Buy a 50- Acre Ranch! With Hello Seven’s Rachel Rodgers
It’s a Pandemic- Let’s Buy a 50- Acre Ranch! With Hello Seven’s Rachel Rodgers

Hello Seven CEO and author Rachel Rodgers has always been bold. But even she was surprised when her family took the plunge and bought a 50-Acre Ranch just after the pandemic started. Her money story will reveal why it makes total sense to expand just when everyone else is in retreat. 

Rachel Rodgers

Rachel’s Money Story:

Rachel Rodgers:
We built a house that we currently live in two years ago. We love it, right? I thought this was our forever house. And literally the moment we moved in, my husband's like, "We'll be here a couple of years and then we'll upgrade." And I'm like, "No. Stop saying that. We're going to live here forever. I don't want to upgrade. I want to raise my children here."

Rachel Rodgers:
And sure enough, two years later we saw a property go on the market here in North Carolina. We were like, "Oh my God, we got to see it." It was a ranch, 50 acres. Horse ranch, so it had horses and a beautiful main house on the property. There's also a cottage and there's trails. I mean, it's insane. There's a river runs through it. I mean, it's a little unreal.

Bobbi Rebell:
And Rachel to put this in context, just maybe four years ago, you were actually living in New York and even in much smaller quarters.

Rachel Rodgers:
Yes. So I lived in an 1100 square foot house in Tenafly, New Jersey, right outside the city. And I loved that house, I loved that town, but I got all the kids in the world and we did not fit. And I was running my business from the house as well, so we were bursting at the seams and needed to expand, right? So we wound up with 50 acres. Not exactly what I intended.

Bobbi Rebell:
Right. And to be clear, [crosstalk 00:03:56]. You have four children. Wait, you have four children. What are their ages?

Rachel Rodgers:
They are 20, 8, 7 and 2.

Bobbi Rebell:
Oh my goodness. Okay. So you moved it to the ranch as we record this about a week ago. And by the way, there's actually a separate Instagram channel for the ranch. Tell us what it's like. So you've now gone up from five years, you've gone from 1100 square feet, and correction in New Jersey I thought it was New York, 1100 square feet in the New York area, we're call it, and now you're at this 50 acre ranch. You've got a big to-do list. How are you managing that financially? Do you have a plan? Tell us more.

Rachel Rodgers:
Yeah. Well, I have a big successful business.

Bobbi Rebell:
So this is your next investment.

Rachel Rodgers:
Yes, exactly. And so I actually use the things that I want to do in my personal life as motivation to keep growing the business. And so we've been having a lot of success. We actually had our first million dollar month where we made seven figures in a single month in June, which was really exciting. But we were in the process of buying this before that and so fast forward to February of 2020, we went to see the property. My husband whispers in my ear, "We must do this." Right? Like as we're walking around the property and so I'm like thinking in my head, I don't know how the hell we would pull this off. This feels like a lot. I got to wrap my head around it. And we were thinking maybe it's a retreat space and we use it for business and we make money from it as well. I couldn't wrap my mind around actually living there personally. It just felt like this property is too big. Who raises their kids on 50 acres?

Rachel Rodgers:
And then, literally, we sat down with the sellers. We connected with them. They are entrepreneurs as well. They felt like our fairy godparents, right? They were almost like mentors and they are the ones that built this property. And so we were like, "You know what, we're going to try to find a way and we'll use it for the business and we'll make money from it. Right? I'm good at that. I'm good at ways to make money from things. And so I was like, great. And then literally two weeks later, there was a world pandemic declared and banks weren't even giving out loans. It was like basically business stopped in March and April. And so we were like, I don't know what we're going to do with this property. Obviously this is like a no-go because who buys an enormous property in the middle of pandemic. Maybe not the best choice.

Rachel Rodgers:
And so we kind of hemmed and hawed and we kept in touch with the sellers and we had realtors involved and everything. But in our minds, we really didn't think that we were going to go through with it. And then as the news kept rolling out, it became clear that this is going to be a long-term thing. We're going to be in this pandemic for like a year, maybe longer, who knows. And so we were out in our backyard at the house that we built that I thought we were going to live in forever. We were just laying there, hanging out with our kids. And I was like, "You know what? We should totally move into that big ass ranch. We should move into that ranch. We should live there with our family. If we're going to be in a pandemic, might as well own a ranch." And my husband's like, "I'm down." That was the moment where we committed in the midst of this craziness. It was like, I think we wouldn't have actually gone through with it without the pandemic.

Bobbi Rebell:
So projecting forward, Rachel, tell us about the business of the Rodgers' ranch? What do you envision now?

Rachel Rodgers:
What we envision for it is that we're going to have a little farm. We are going to host retreats. There's a cottage on the property that I'm going to use for my business as my office. And a little sneak peek ahead, we're actually in the process, because we're crazy, of buying a house across the street. Because of course, before we even closed on this property, the house across the street which is the only other house in the culdesac, that house went on the market. And I was like, "Oh my God, it's the perfect retreat house. It has seven bedrooms. We can house so many clients and we could do amazing retreats on the property. We have to buy it."

Rachel Rodgers:
My financial advisors is like, "Please don't. Can we take a beat?" And I'm like, "No, no, no, we have to buy this." Because when will we get another chance if somebody else buys it. So now we're in the process of purchasing the house across the street, so now we will have 57 acres because that house comes with four acres. So it's like 57 acres total that we will own and we'll rent out the house and do Airbnb and stuff like that. But then we'll have retreats where we'll have like coaching with the horses and we'll have a pool party. We've got trails. We have a tennis court. It's pretty bananas.

Rachel Rodgers:
I personally cannot wait to come. Tell us what is the lesson from this money story for our listeners? How can they put this into their own lives? What can they learn from it?



Rachel’s Money Lesson:

Rachel Rodgers:
My lesson for you guys is during a pandemic or recession or any type of hard time, I encourage you to expand instead of contract. I think that's what our natural response is, particularly when it comes to money. Let us just get smaller and contract and we're afraid and so we shrink ourselves and we shrink our dreams during tough times like this. And I say, no, let's expand. Because I actually think, and I've studied this, there are a lot of businesses and a lot of opportunities and careers that get made during times like this. It's the crazy people who are willing to take risks during these sort of shaky times. Those are the people that wind up having wild success. Netflix became what it is in the last recession because remember they were doing the DVDs and then they started doing streaming because they had to change their business model. And guess what? Now they're an enormous giant. And so I say, look for opportunities to expand.


Rachel’s Money Tip:

Rachel Rodgers:
So my everyday money tip is to pay to be productive. So pay coaches, pay people to babysit you, pay people or pay for space to get things done. So I recently wrote a book and the way that I wrote the book, because I live in a household with a bunch of children, big family, we also have my mother-in-law lives with us. Like there's a lot of people in my house and so I went to Hawaii for a week. This was pre-pandemic and got half of my book done and then-

Bobbi Rebell:
Half?

Rachel Rodgers:
Half of it and then when I got back to town, the only way I got the other half done was by going to a hotel locally and getting the rest of it done. And then I would meet with a book coach every Wednesday. And she would basically sit there and babysit me on Zoom so that I would write. Yeah. But I mean, to some degree I completely get that. I mean, I was joking. My family interrupted me like 10 times all with really good things. They wanted to share their opinion on something. They wanted my opinion on something. They wanted it to tell me something. It was all good things, but it took me hours to watch a 40 minute video that was something for work because I couldn't find a place to not be interrupted and people mean well.

Bobbi Rebell:
Yes.

Rachel Rodgers:
It's a good thing that they want to talk to you, but you just can't always get stuff done and leaving sometimes is the best thing. Leaving temporarily, you know what I mean?

Bobbi Rebell:
Yes.

Rachel Rodgers:
And when you pay for that space, I think sometimes you value it more. Now we obviously can't go sit at a coffee shop the same way we could before, but even that you're not paying for, I think when you pay for someone to watch you, you take it a lot more seriously.

Rachel Rodgers:
You know what someone said to me years ago, and I will never forget this phrase. They said, when people pay, they pay attention.



Bobbi’s Financial Grownup Tips:

Financial Grownup Tip #1:

Bobbi Rebell:
start thinking about ending the timeout, if you haven't already. When the pandemic first started, it was totally understandable that we weren't going to be very productive, so timeout made a lot of sense. But at a certain point, we need to find a way despite the fact that the situation very much still stinks for many of us and could get worse, we got to do it. Rachel talks about even paying to be productive. And I agree if you can do it, do it. If it's not in your budget, well try to get creative. Maybe create blocks of time where if you can't leave your home, everyone else does so that you can get some work done. Or go to sleep earlier than everyone, a few days a week so you can get up and work before they get up. Maybe have an accountability buddy that does it with you and you text each other to make sure you're getting up. You can make excuses that are totally valid, good reasons, but that's not going to get you to your goal. Life has to go on and so does your path to success.

Financial Grownup Tip #2:

Bobbi Rebell:
don't assume your dreams will always be just dreams. Rachel never imagined moving south and opening up a ranch and a retreat. In fact, that wasn't even in the dream category at a certain point, but here she is. Dream big and then break it down into small steps that you can work towards. Even if the overall timeline has to be extended, just keep making progress and don't forget to document it all.



Episode Links:



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Authors, Business, Financial Grownup, Money, Investing, Role Models, Women Entrepreneurs, Women Role ModelsBobbi Rebell KaufmanRachel Rodgers, The Rodgers Ranch, Coronavirus, COVID-19, Ask For More, Reach For More, More Space
4 Myths About Money and Investing With Work Your Money Not Your Life Author Roger Ma
4 Myths About Money and Investing With Work Your Money Not Your Life Author Roger Ma

Some of the most common advice is also the worst. Bobbi and her guest, certified financial planner Roger Ma discuss some popular myths and how investors can protect themselves - and their money- from going down the wrong path. 

Roger Ma

4 Myths About Money and Investing

  • Myth #1 - Earning a high salary will make you financially secure

  • Myth #2 - Renting is throwing your money down the drain

  • Myth #3 - Investing is the most important aspect of personal finance

  • Myth #4 - Investing is complicated


Episode Links:


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Advice, Authors, Financial Grownup, Financial Grownup Guides, Investing, Money, Personal Finance, Role ModelsBobbi Rebell KaufmanRoger Ma, CFP, cfp®
That time we joked about $18 cocktails with Dumpster Doggy’s Amanda Holden
That time we joked about $18 cocktails with Dumpster Doggy’s Amanda Holden
Amanda Holden

Pre-coronavirus we joked with Dumpster Doggy Blog’s Amanda Holden about her decision to upsize her life and move to New York City, and all the ridiculous expenses that were becoming part of her new NYC life. 


Amanda’s Money Story:

Amanda Holden:
I just made the move. I came out to New York City alone. I've never lived on the East Coast before. I moved from Portland, Oregon, and so it was a super big change, but one that I had started thinking about probably about a little bit more than a year, a year and a half, two years ago as something that I wanted to do. And so I saved up my money. I built up my business. I waited until I was ready and then I moved out here for no reason other than I wanted to be here.

Bobbi Rebell:
I love that. Tell me more about what the change was like financially.

Amanda Holden:
Sure. So I did market research on rent prices and then also just normal cost of goods, groceries, also sales tax. I moved from a state that didn't have sales tax, so everything is going to be automatically about 10% more expensive in New York City, so taking that into account as well. And what I did, and this is not necessarily what everybody has to do, but what I did is I wanted to make sure that I had a year's worth of rent saved and a year's worth of my business taxes saved. So I actually saved quite a bit of money in cash before making the transition, knowing that it's really hard to understand how expensive it's going to be to live in a city until you're actually doing it yourself.

Amanda Holden:
I asked friends and I can hear from them, but they live different lives than I do and so what I spend money on is not what they spend money on. I knew that some of it's a guessing game and just getting to a point where I had a big enough cushion that I felt comfortable doing so was essentially all that I did. And I'm really lucky in that I am extremely light on my feet. It's just me. I moved with literally two suitcases and I'm not even exaggerating, and that just makes it really easy as well. If I need to pick up and leave and go back, then I can certainly do that, which helped give me some flexibility as well.

Bobbi Rebell:
So tell us more about what was as you expected financially and what surprised you financially moving to a bigger city and a more expensive city?

Amanda Holden:
Bobbi, every single cocktail here cost at least $18.

Bobbi Rebell:
Yeah, that's not bad. 18 sounds about right. Definitely, you can go more.

Amanda Holden:
It's truly terrible. So I moved from Portland, Oregon, but I also lived in California for the majority of my adult life. I was in school in L.A. and then working in investment management in San Francisco. Which is an expensive city.

Bobbi Rebell:

It's an expensive city.

Amanda Holden:

It's not cheap there either. No, it's not. But when I was there, the years that I was there, I left actually in 2013, which is crazy that it was so long ago, you could absolutely, the bars I went to, you could absolutely walk in and get a whiskey soda for $6 or $7. At least the places that I was going to. But in New York city, I don't think that I quite expected that my fun budget was going to need grow by more than double because Portland is a really cheap uneasy place to drink. And so that has been a surprise. Obviously, I'm paying more in rent, but there's some other things where I feel like I'm saving money. I don't have a car here. I had a car in Portland, and so that's nice. I love being able to walk. I love living in a walking city. I love public transportation.

Amanda Holden:

That's been really great to not have to have my car and so after it all shakes out, yeah, I'm definitely spending more money here, but I'm also just pretty naturally good at sticking to a spending plan and even in a more expensive city, I do a pretty good job of saving.

Bobbi Rebell:

One thing that a former guest here on Financial Grownup said, Barbara Corcoran, she talked about the fact that she liked having a little bit of a fire under her because it made her want to earn more. And she says it works, that needing to have more money to live the life you want actually motivated her successfully to earn more money. What do you think about that? Do you think that being here has helped your business because you want to do all the things, you want to be able to go have that $18 cocktail, if you want it?

Amanda Holden:

Absolutely. I think that's absolutely a driver and maybe even more than that, just being surrounded by people who are doing and who are ambitious and who are trying to squeeze every last drop out of life and it's not like people in Portland aren't doing that, people in Portland are absolutely doing that, I know some of the most wonderful and creative people there, but the pace of life is certainly slower. And so there's just a different cadence to being in New York City that I think helps and it's energizing and I feel very alive here. Man, nothing like walking through the streets of Manhattan and getting an umbrella right into the eye to really make you feel alive when you're here. Yeah, that's definitely a motivating factor.

Bobbi Rebell:

Looking back, are there things that you in retrospect would have done a little bit differently in terms of the preparation to basically up-size your lifestyle? I mean, it's just a more expensive place to live.

Amanda Holden:

I think that doing the saving is doing the work. Coming with some sort of financial cushion was imperative to me moving without taking on a whole bunch of financial anxiety, because I could see having a bunch of financial anxiety. If I was to do one thing differently, I probably would have worked on creating some more passive income streams before I got here, not only because having a passive income stream is really helpful, but also because the cost of building out something like, let's say, a video course or something like that is going to be much cheaper to create in Portland than it is going to be in New York.

 
“There’s just a different cadence to being in New York City ...  it’s energizing and I feel very alive here.”
 

Amanda’s Money Lesson:

Amanda Holden:

I think that the lesson here is that if you have a financial goal, it is worthy and you don't have to listen to what anybody else says your financial goal should be, but just make a picture of it in your head, make a bank account to match it, and then just hit that goal hard. I'm a firm believer in the value of really conceptualizing your goals and really thinking about it often, like, whatever, put it on your mood board, I don't use Pinterest, but put it on your Pinterest, whatever it is, and working towards that specific goal because it is so much more motivating than if you have just some random savings account that you're just putting money into with no particular goal in mind.

Bobbi Rebell:

Did you have deadline and a specific amount of money and work back from there?

Amanda Holden:

Well, really my deadline was earlier this year doing my taxes.

Bobbi Rebell:

Mm-hmm (affirmative).

Amanda Holden:

And so I had an idea of how much I would owe in taxes. Last year was my first full year self employed doing my own business and so I had an idea of what I would owe in taxes. But you always kind of are like, "Well, until I actually do it, I could be way off. Am I going to owe $1000 or am I going to owe $40000? Where is it going to fall?" And so luckily once I did my taxes, I hired a CPA to do my taxes for the first year, I found out that I owed exactly what I expected and so therefore I had enough cushion where I was like, "Okay," I told myself this was my deadline. If I kept my cushion and didn't pay it all to self employed taxes, that I would move to New York City.

Amanda Holden:

And actually one of my good friends, I don't know if you know Emma Pattie, but Emma in Portland, she, on tax day, literally looked at me and she's like, "So are you moving to New York City?"

Bobbi Rebell:

Oh.

Amanda Holden:

I know, and I was like, "Oh, I guess I did say that, didn't I? Yeah, I guess I should go. I guess I should go now."

Bobbi Rebell:

We love accountability. Accountability is everything.

Amanda Holden:

I know. I was like, "Dang, I forgot I had said that.

Bobbi Rebell:

Yes, tell people things. That's one of my favorite tips, is actually telling people because then you have more ownership and accountability.

 
“If you have a financial goal, it is worthy and you don’t have to listen to what anybody else says your financial goal should be”
 

Amanda’s Money Tip:

Amanda Holden:

So my everyday money tip, if you found $300 to spend at Target, then I encourage you to consider that you have money that you can also invest in a company like Target or invest in companies in general, invest in yourself and in your future,

Bobbi Rebell:

Right. So take whatever budget you were going to spend wherever you were going to go shopping and instead shop for the stock of that company. But make sure it's a good investment too. Don't just buy blind leave. We don't want to tell you to do that, of course.

Amanda Holden:

Right, right. And this is just an example.

Bobbi Rebell:

Right. But I love the analogy because when you rethink it and you approach something differently, wait, I was going to spend $300 on groceries for my very large family at Whole Foods, maybe I can spend less and invest the extra in Whole Foods. Not necessarily recommending that investment, but the idea is there.

 
“I’m a firm believer in the value of really conceptualizing your goals and really thinking about it often”
 

Bobbi’s Financial Grownup Tips:

Financial Grownup Tip #1:

I love that Amanda's friend Emma held her accountable. Accountability is a great tool to use. Without it, I know I would not have accomplished many things in life, so however that works for you, tell a friend about a goal and give them permission to check in with you on your progress, and yes, to hold you accountable.

Financial Grownup Tip #2:

Let's talk about risk tolerance. It's being tested for a lot of us right now. Amanda took a huge risk uprooting her life and moving into a more, let's say, financially challenging city. Given the economic chaos we are all now seeing with the impact of the coronavirus, was it a mistake? I say no. We make the best decisions for ourselves based on the information and the goals we have at that time.





Episode Links:



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Entrepreneurs, Financial Grownup, Investing, Personal Finance, Money, Travel, Women Role Models, Women EntrepreneursBobbi Rebell KaufmanAmanda Holden, Dumpster Doggie, Dumster Dog Blog, Dumpster Doggy
Hint CEO Kara Goldin on working with celebrity investors like John Legend
Hint CEO Kara Goldin on working with celebrity investors like John Legend
Kara Goldin Instagram

When Hint CEO Kara Goldin started getting calls from celebrities about investing in her company, she quickly learned to make sure she only partnered with those who were authentically aligned with her brand values. Kara shares the story of why she said yes to John Legend, but took a pass on another big pop star. 



Kara'’s Money Story:

Kara Goldin:
Well one of our investors, probably the most famous of our investors is John Legend. I mean, John Legend, every time he's playing he a bottle of Hint on stage with him. And people always say, "How do you get John to do that?" I'm like, "I don't." I mean, John does it on his own. John just brings it up there because he loves drinking our product.

Bobbi Rebell:
So I have to ask you, how did John Legend become an investor?

Kara Goldin:
So John, actually, it was almost 10 years ago now that he reached out to us. He had been drinking Hint, actually in Starbucks. We were in all 11,000 Starbucks stores nationwide, and he had picked up a bottle and really enjoyed it. Then reached out to us, and I have to be honest, I didn't know who John was, and you know he's grown a lot in the last 10 years.

Kara Goldin:
He called just trying to understand if this was a product of Coke or Pepsi. He was surprised to hear that it wasn't, and that he was like, "Gosh, this is really good. You're not using sweeteners of any kind. You're not using preservatives of any kind. I think that you guys have an incredible mission that is sitting in front of you to really help people get healthy."

Kara Goldin:
And he's said, "I am super curious if you guys are taking on investments, I'd be really interested." So when we did our next round, I reached back out to him and I said, "I'm not sure if you're interested, but you know, in addition I really want to meet you," because that's a whole other piece that I wanted to meet everybody who's invested in our company as well.

Kara Goldin:
And so, I might not meet them on a monthly basis, but I think it's also a very important thing to really understand where these people are coming from and do they buy into your mission. I think that's really important.

Kara Goldin:
So yeah, so that was how John came on, and he's just been a huge advocate, and has been, even called by people who were thinking of investing in the brand that knew him as well, even before when they found out that he was an investor. He's just a great advocate and good reference too for what we're doing.

Bobbi Rebell:
We talk about different stakeholders and different investors and what they bring to the table. So with a celebrity investor like John Legend, what does that bring to the mix that is complimentary, that's different from just your average investor?

Kara Goldin:
It's interesting. I think the key thing that I share with other entrepreneurs who are raising money, about celebrities, whether that's a sports figure or an actor, or performer, is that, do they actually believe in your product? Do they drink your product? Right?

Kara Goldin:
Because I think that if they don't actually understand what you're doing, and if they aren't a fan already, it's very confusing to the consumer, and it looks phony. And so, gone are the days where you can pay a celebrity to do an endorsement and throw it up on a billboard and people actually believe it.

Kara Goldin:
And so, I think that there has been a shift in, "Let's go invest in these companies." But I still think there's a lot of these celebrities that are really just doing it and then they're not actually ... They don't believe in it, and they'll be walking down the street and drinking something that is totally counter, in the case of a beverage company, to sort of what you're doing.

Kara Goldin:
If you end up on TMZ and you're not really living the brand, then I think it's just really phony. So I think there's confusion to so many, like, "Do I take the money from these celebrities or not?" The sniff test, as I call it is, do they love the product already?

Kara Goldin:
I mean, we've had calls over the years from a lot of celebrities, and I'm always willing to send them a case if they haven't had Hint, and just see what their response is. If the response is, "Yeah. You know, they liked it okay." Then I'm like, "You have to love it. You have to really understand why we're doing this." Because for me, again, it's not just about having a great tasting product, it really is about a mission to really help people drink better tasting water. That's like a huge thing.

Kara Goldin:
I mean, I also just don't want people involved in the company who are going to ultimately do something to tarnish the brand, and that's really the challenge I think with celebrities overall. So that's the key thing.

Kara Goldin:
I think another piece that comes up for a lot of entrepreneurs, and we've never done it this way, but I've heard that there are celebrities out there that just want equity in the company and they don't put any money into the company because they believe they can help the brand in some way. I don't know, I think you really have to have skin in the game and put some kind of money into the company too, because if you're just getting equity in the company, it's probably a deal that you ultimately want to pass on.

Bobbi Rebell:
I think it's interesting because a lot of celebrities ... I mean I think about Ashton Kutcher and Bono, and they've done real investing for real ... The ones that from what I know, have been most successful, are the ones that really are putting their money into it and their time and their attention, and they believe in it. And it sounds like that's something in your case that Mr. Legend does do.

Kara Goldin:
Yeah, and I think, I mean, very similar to successful entrepreneurs today, I think that if you have an investor who doesn't know why they're investing, then you should not have them investing in your company. It's such a key thing. Like, if they're just investing because they've seen that John Legend invested and they want to ride the coattails of John. I don't know, I just think that that's like, they're too high profile and they will be asked along the way and they will be watched along the way.

Kara Goldin:
So again, I don't want to do anything for them that's going to tarnish their image either. So I think that's such a key piece. I feel like just because you're saying, "I don't want your money," it doesn't mean that you can't have them, in the case of Hint, drinking the product. Right?

Kara Goldin:
I think basically having the conversation with these people like "Look, we want to create a win-win here for you too, and if this is going to be uncomfortable for you."

Kara Goldin:
I'll never forget this one quick story. We had a celebrity approach us, actually an agent approached us, and he said, this individual singer loved Hint, and called me, and he said, "He loved it, he thinks it's really great."

Kara Goldin:
And I remember going home to my daughter and I said, "Gosh," like the singer you know, who will remain nameless, "just loved our product and thought it was really great." And I said, "We might actually do something with him he wants to invest," et cetera. And my daughter, who is a teenager, she knew exactly who he was, but she said, "Oh, that's really interesting." And she said, "Well, last year he did a deal," an endorsement deal, not an investment, but, "an endorsement deal with 7 Up."

Bobbi Rebell:
Which has a lot of sugar.

Kara Goldin:
Which has a lot of sugar in it. And I said, "Huh," I googled it and saw it was true. And unless he was willing to actually say like, "I've seen the light and I don't want to have sugar anymore and I found Hint," and he's able to tell us why and speak to it, then I just think it's affecting your own brand ultimately, and it will be like he could be ridiculed.

Kara Goldin:
Here a 14-year-old was telling me this, and I went back to this guy's agent and I said, "I have to tell you the story." And I told him what my daughter had said and he said, "Well, no matter where this conversation goes, could I please hire your daughter because she really understands this stuff?" So being careful about where you're taking an investment.

 
“Gone are the days where you can pay a celebrity to do an endorsement and throw it up on a billboard and people actually believe it”
 

Kara’s Money Lesson:

Kara Goldin:
I think the big takeaway is know where your money is coming from and how it could ultimately affect you down the road.

 
“Know where your money is coming from and how it could ultimately affect you down the road”
 

Kara’s Money Tip:

Bobbi Rebell:
So for your everyday money tip, you have some advice of some basically free or almost free things that people can do and get discounts on right at their own company that many people don't even pay attention to.

Kara Goldin:
Yeah. So it's the beginning of the year and, maybe you're looking at a new job opportunity. Definitely look for jobs that have equity potential because that's ownership in a company, that's almost free money to have in addition to your salary. So definitely look for opportunities like that. But if you're also in a company that does not offer equity, there's often stock incentive plans at discounted rates that you can join onto and participate in.

Kara Goldin:
And then in addition to that, there's all kinds of benefits internally, that just makes sure that you know about those things at the beginning of the year so that you're not stuck at the end of the year realizing that you left a bunch of money on the table.

 
“John Legend, every time he is playing, he has a bottle of Hint on stage with him and people always say, How do you get John to do that? I’m like, I don’t. John just bring it up there because he loves our product. ”
 

Bobbi’s Financial grownup tips:

Financial grownup tip number one:

Has to do with taking money from investors or for just any reason from somebody where you need cash. Money has strings. That's why you pay interest to banks. They want something which they should get because they're lending you or giving you the money.

When you take money from someone or an entity, think about their angle. Are they giving you money to help you and/or what you are building, or do they have maybe an ulterior motive that you may not be in alignment with? Could they become a liability because you're affiliating with them, and depending on the terms, they could have a lot to say about the future of wherever that money is going.

Financial grownup tip number two:

There's a lot more to compensation than just the cash in your paycheck or from a client paying their bill. As Kara recommended, don't leave money on the table or wherever. Go read your HR website in full. It may not be boring and maybe kind of interesting.

Maybe take notes if you aren't going to do the things now, or if you are self-employed or a freelancer, read up on the tax code. Yeah, the tax code and what you can do to maximize benefits you may not even realize you were entitled to.

Look into groups that you can align with to get benefits. As an example, here in New York City, we have TDF, that stands for Theater Development Fund, and you can join if you fit a number of categories, one of which is freelancer, and that means you can get tickets for Broadway shows for as much as 70% off. That's a benefit, much like you would get when you work for a company. You also can get free membership, for example, to cultural institutions like museums by getting a New York City ID. So check what's available in your city.



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Entrepreneurs, Financial Grownup, Investing, Money, Role Models, Women Role Models, Women EntrepreneursBobbi Rebell KaufmanHint, Hint Water, Kara Goldin, John Legend, Invest, Investing, Founder, CEO
Financial Grownup Guide: 3 Best Investing Tips for Financial Grownups with Money for the Rest of US author David Stein
Financial Grownup Guide: 3 Best Investing Tips for Financial Grownups with Money for the Rest of US author David Stein
FGG David Stein Instagram

David Stein shares a sneak peak of the investing strategies from his new book, including how to differentiate between investing, speculating and gambling. He also discusses why you need to know who is on the other side of a trade, and the key factors that will make an investment profitable. 

3 Best Investing Tips

  1. Know if a financial opportunity is investing, speculating or gambling

  2. Know who is on the other side of the trade

  3. Know what it takes to be successful

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Authors, Entrepreneurs, Financial Grownup, Investing, Personal FinanceBobbi Rebell KaufmanDavid Stein, Money For The Rest Of Us, Books, Author, Money Tips, Investing, Investing Tips
Financial Grownup Guide - Top New Money Books for Grownups Right Now (October)
Financial Grownup Guide - Top New Money Books for Grownups Right Now (October)
October Money Books Instagram

Bobbi reveals her favorite new money related books, and how to decide if they are right for you. This month’s picks include The House Hacking Strategy: How to use your Home to Achieve Financial Freedom by Craig Curelop, Your Turn: Careers, Kids and Comebacks by Jennifer Gefsky and Stacey Delo, Retirement Reality Check: How to Spend Your Money and Still Leave an Amazing Legacy by Josh Jalinski and ZenBender: A Decade-Long Enthusiastic Quest to Fix Everything (That was Never Broken) by Stephanie Krikorian.

Book #1: The House Hacking Strategy: How to use your Home to Achieve Financial Freedom by Craig Curelop.

Here’s what I liked about it: 

-The book has a ton of very specific case studies- including that of the author.

-The under the radar red flags for choosing tenants. Things you would not think about.

-How to successfully invest in areas that are NOT distressed.

Who is this book for? 

Everyone interested in actually house hacking but also those of us who are just curious how it all works. I was extremely skeptical, and honestly, some people over leverage in my opinion. But there is a real formula and method to success and Craig does a great job explaining it. This makes GREAT cocktail party chatter as they say.. I thought it was well worth the time I invested, even though I do not plan on investing in real estate using the house hacking strategy.


Book #2: Your Turn: Careers, Kids and Comebacks by Jennifer Gefsky and Stacey Delo. 

Here’s what I liked about the book: 

-If we are being honest- it spoke to me, and to most of my friends. This is a book about how to keep that career going- even if you hit pause.

-While there is a positive tone, it is not the usual rah rah blah blah blah you go girl stuff. This is realistic and because of that both empowers and challenges the reader to take ownership of the fact that making it happen has to come from them

-The book doesn’t just speak to the parents wanting to make a career comeback- it also speaks to the employers who want these great resources back at work. 

Who is this book for? 

The authors have targeted working moms- so that’s clear. This is also a book that men should read- and not just dads who may face similar challenges coming back into full time work. I mean the men who worked with the women earlier in their careers and will get re-introduced to them when they return to their jobs.


Book #3: Josh Jalinksi’s Retirement Reality Check: How to Spend your Money and Still Leave an Amazing Legacy. 

What I like about this:

-Josh talks about tools that aren’t always super mainstream these days- including annuities and whole life. Not for everyone- but they are for some people and we all should have a sense of what they are so we can make the decision that is right for us.

-Josh strikes a nice balance between focusing on living the life we want, and also wanting to leave something for those who come after us. Passing wealth on to family members is something many people also care about that isn’t often addressed in books aimed at one’s own retirement. 

-Josh’s gregarious personality comes through making this tough topic a lot more pleasant to learn about

Who is this book right for:

Anyone who wants to retire comfortably, and wants a roadmap that wants a fresh perspective - including some controversial options. 

Bonus Book: Stephanie Krikorian’s Zenbender: A Decade-Long Enthusiastic Quest to Fix Everything (That was Never Broken).

What I loved about this book:

-So much of the time we think we are the only ones experiencing but in fact many others like Stephanie are having similar life experiences- from insecurity, to weight and career battles, to questions about where you are in life, relationships and of course, adulting. 

-This book may be non fiction but it is a page turner as if it were the fiction book you just need to tell someone about asap so they can be in on it too. 

-Stephanie has amazing money tips and life insights- from just using one pump of shampoo to save money- to the admission that yes, in her words “I’m built to spa”. Stephanie knows who she is, and she will help you figure out- or admit- you you are too! 

Episode Links:

Blinkist - The app I’m loving right now. Please use our link to support the show and get a free trial.

Craig Curelop’s Financial Grownup episode + Get your copy of The House Hacking Strategy: How to use your Home to Achieve Financial Freedom

Jennifer Gefsky and Stacey Delo’s Financial Grownup episode + Get your copy of Your Turn: Careers, Kids and Comebacks

Josh Jalinksi’s Financial Grownup episode + Get your copy of Retirement Reality Check: How to Spend your Money and Still Leave an Amazing Legacy

Stephanie Krikorian’s Financial Grownup episode + Get your copy of Zenbender: A Decade-Long Enthusiastic Quest to Fix Everything (That was Never Broken)

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Entrepreneurs, Financial Grownup, Financial Grownup Guides, Investing, Money, Health + FitnessBobbi Rebell KaufmanBooks, House Hacking, investing, Real Estate, ZenBender, Craig Curelop, Your Turn, Financial Freedom, Jennifer Gefsky, Jennifer Gefsky and Stacey Delo, Stacey Delo, Retirement Reality Check, Josh Jalinski
8 Steps to Being a Great DIY Investor with Clint Haynes
8 Steps to Being a Great DIY Investor with Clint Haynes
FGG Clint Haynes Instagram

Investing can be intimidating, but there are some simple basic steps that can put anyone on the path to success. NextGen Wealth founder Clint Haynes CFP® walks us through 8 steps to get started investing, including how to decide how long to own a stock, if and when you should pay fees, which stocks make sense with your goals, and how to understand the role emotions can play in our investment decisions. 

8 Steps to Becoming a Great DIY Investor

  • Understand How to Invest for the Timeframe for Each Goal

  • Understand the Role Your Emotions Play in Investing

  • Your Investments Will Lose Money on Average Every 3-5 Years

  • Each Goal Should Have Its Own Specific Portfolio/Bucket

  • Rebalance Your Portfolio(s) at Least Annually

  • Choose Investments with Low Fees and Expenses

  • Don’t Reinvent the Wheel When Creating Your Own Portfolio(s)

  • Monitor Your Investments Quarterly to Annually

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Advice, Entrepreneurs, Financial Grownup, Investing, Money, Personal FinanceBobbi Rebell KaufmanClint Haynes, DIY, investing, Investing Tips, Investor
How her financial planner made more on her investments than she did with ZenBender author, and financial journalist, Stephanie Krikorian
How her financial planner made more on her investments than she did with ZenBender author, and financial journalist, Stephanie Krikorian
Stephanie Krikorian Instagram

Ghost writer Stephanie Krikorian trusted a financial planner with her investments after a big layoff a decade ago. But years later discovered blind trust was costing her, and learned to read the paperwork, and take grownup ownership of her money strategy.  


Stephanie's money story:

Steph Krikorian:
So, basically, I get laid off and I did two quick things. I refinanced while I still had a paycheck coming in, because rates were down and they hadn't been for awhile. I thought that was a smart thing to do. Secondly, I went to this financial planner and merged several 401ks, because I had been at several jobs and never really paid much attention to it. I always put in the max that I could, et cetera. But I thought, "This will help me move it, and then I can focus on finding a job or starting a business, whichever I'm going to do."

Steph Krikorian:
I remember meeting with this financial planner and asking a very specific question, "How are you paid?" My understanding when I left that meeting, and I interview people for a living, so I feel fairly confident I was given a certain answer and didn't make that mistake, but maybe I did, my understanding was the payment for the financial planner was based on money I made, so that if I made 10%, the financial planner was paid a percentage of that. So, I do all these things, and I am on my own little austerity program. I'm doing a single pump of shampoo. You can read about all the crazy things I did to not waste money while I was trying to, you know, make sure I didn't overspend. ,I was trying to stay on my budget. I invested. I knew I had to save. Even when there was no money coming in, even though I cut everything else out, I scraped together a certain amount of money.

Steph Krikorian:
So, in the meantime, I start going on the Zen Bender, because I start reading self-help books. I've reinvented myself. I start reading self-help books. I start getting obsessed-

Bobbi Rebell:
This is all because you're ghostwriting a lot of them too, so you're really immersing yourself in your material.

Steph Krikorian:
That's how it started. I really was immersing myself in the material, because everybody has a book idea, and then they say, "Oh, it's like the Suze Orman of such and such or the Marie Kondo of such and such." So, I was reading for research, but as I read, I also got a little obsessed, because I said, "Oh my God. There's all these fixes out there. I must have all these holes in my life to fill. I'm single. I'm thick around the middle, because everyone wants to lose a few pounds. I'm trying to figure out my career." So, I started grasping at all these things a little more than necessary, as per the research.

Steph Krikorian:
So, I take my eye off the ball of what I think I had set up with the financial planner, and I spend hoards of money on Reiki, and rainbow healers, and dating coaches. You know, I could've basically probably gone to law school instead and done something productive. But all of this time I think, "You know, I've made my budget. I'm following the rules. I'm being careful." But somewhere in all that mishmash, kind of the point of the Zen Bender was I lost a little bit of confidence. I stopped trusting my gut and I kind of took my eye off the ball of the important things and ceded a lot of power to these ... you know, this dating coach who's telling me, "You've got to wear high heels and have shiny hair in order to find a husband, because he'll think you're fertile, and he'll want to marry you."

Bobbi Rebell:
Right. And probably very expensive heels too.

Steph Krikorian:
[inaudible 00:06:24] I got $200 a pop, but if you do five, then of course X,Y,Z is going to happen. The doors will open up. I had started treating my business like a business. Even though it's writing, I formed an LLC. I have a lawyer. I outsource things like copy editing, because I wanted to only do the work that was mission-critical. So, I was making enough money. It wasn't like I was on my credit card doing this stuff. You know? There were lean years the first couple of years. Then I started getting on my feet and I started making enough money.

Steph Krikorian:
Somewhere in there I have a call from my financial planner. Also, in fairness, if I step back and look at it, she gave me a couple of pieces of advice which were, "Sell all your stock from your first job," which was General Electric stock, which at the time was not a good suggestion, and, "Dump this apartment, even at a loss." I disregarded both pieces of advice. I was not going to dump that apartment at a loss. I was going to make my payments, and I was going to save it, that investment. So, I didn't take that warning sign, you know? That should have made me a little nervous, and it didn't, because I knew better. I'd worked in financial news, like you, and I knew that wasn't right. Every year I'm putting together the maximum I can scrape in and put in, but nothing's really moving in the fund. I'm in one of those funds as you age, you know, with the term and the end.

Bobbi Rebell:
The target date fund, which sometimes have double fees. Sometimes those can be very expensive.

Steph Krikorian:
Right. It didn't seem to be doing a lot, and I thought, "Oh, it must just be the time, you know. Whatever." So, we have this call and she suggests, since I've reached a certain milestone, she explains there's this, you know, almost like a fund of funds with these various ETFs in the same thing. It sort of ages as you go and it's really something to consider. I said, "Okay. Great. I guess so. Sure." She said, "And the fee is so much less. It's almost half,| or whatever. I say, "Oh, what's the fee been generally, because it shouldn't ... you know, we haven't made a lot of money, so it couldn't possibly be very high." She tells me the percentage, and I do the math, and I get furious.

Steph Krikorian:
I'm like, "Wait a minute. You're charging more out of my fund than I'm depositing every year. You should have seen that." You know, she said, "Well, I don't keep track of who's putting in more or who's not." I'm like, "That's your single job. That's like your only job, to be ... Maybe you should've stopped and said, 'Hey. I don't think you need to be in here. Just go to Fidelity and buy a fund.'" I was mad at her, but honestly I was more mad at myself, because the one thing I probably should have spent the time on was understanding what was going on there. But I got so lost in the haze of all the chaos and life change that was happening, that I trusted the professional to handle it, and I don't think ... She didn't do anything negligent or anything like that. She did what she told me she would do. It's just I didn't double check. I think you have to stay on top of these things, because the single most important thing is your money, period. It really is.

 
“Nobody reads the fine print. So you have to do your own annual or semi-annual check in and now I do. I check very rigorously all my financial statements. ”
 

Stephanie’s money lesson:

Steph Krikorian:
Double check, double check, double check, and then quarterly, when you have those check-ins, check, and maybe you're smarter than the experts. Maybe if you're in a single fund, investigate the other ways to invest in that single fund, so that you don't pay the load that you're paying a financial planner,` who has much wealthier clients to make money off of.

Bobbi Rebell:
Was she a fiduciary? Do you know? Was she a CFP? Was she a fiduciary?

Steph Krikorian:
Yup. Mm-hmm (affirmative).

Bobbi Rebell:
Really?

Steph Krikorian:
Yeah. It was a big firm and all. She wasn't doing anything wrong. She did her job.

Bobbi Rebell:
And she informed you. You just didn't hear I guess is what you're saying.

Steph Krikorian:
I misunderstood at the beginning and I was an early client.

Bobbi Rebell:
You're a financial journalist.

Steph Krikorian:
I know.

Bobbi Rebell:
Oh my goodness, Stephanie. What hope is there for everybody else?

Steph Krikorian:
I know, and I wonder. I was an early client of hers, and she was just starting out. I liked her, because she was woman and she was new, and people were giving me a chance, and I gave her a chance. I still don't regret that, but I think, you know, these things aren't transparent. You can't tell how much you pay. In fairness to anybody, it's hard to tell what percentage you're paying in these things. So, I think you have to ask those questions regularly, because things also change, and nobody reads the fine print. So, you have to do your own annual or semi-annual check-in, and now I do. I check very rigorously all my financial statements. I check my bank account to see ... You know, my bank account got hacked. If I didn't check as frequently as I did, I would never have known. So, you-

Bobbi Rebell:
Oh my goodness.

Steph Krikorian:
It did. Yeah. They had my name. They had my bank account. Must've been off a piece of paper or a bill. They were trying to get in there. They didn't get anything. But, so, you have to always check. Nothing to do with your money should ever be on autopilot, even paying your bills. You know, you can miss a bill, because autopilot is not the way to go, and that's for your financial planning and your daily accounts. You got to keep a tally.

 
“Walking solves all my problems… It helps creatively, it helps anxiety.. and saves some money. ”
 

Stephanie's everyday money tip:

Steph Krikorian:
So, you can get really caught up into these things. The average price for any of these sessions is $200. It's very easy to get-

Bobbi Rebell:
For what? I'm sorry. $200 for what?

Steph Krikorian:
Like Reiki, the astrologist, acupuncture. $200 seems to be the going rate of 2019, and buying five packs is very easy to get caught up. I would say this. Try anything, because there's a placebo effect or you find it inspiring. Try anything once. Don't buy the five packs. Just try it and see, and then step away and think of it. Don't get caught up in it. But more importantly, what I found, after all of the sessions, and all of the coaches, and thousands of dollars on a dating coach, I'm still single.

Steph Krikorian:
All the diets I tried and paid for and I think of how much per pound I've spent trying to lose the same 5, 10 pounds. Go for a walk, and then go for another walk, and then walk for more, longer, longer, longer. Walking solves all my problems, and it took me ... I knew that at the beginning, and then I didn't figure it out until the end, but it helps creatively. It helps anxiety. It does the same trick as some of this other stuff does, and it helps you work out, and it's good for your health, and so do that. That's my suggestion. Save some money. Do everything that you want to do, but just once in a while. Don't go on a Zen Bender, like I did, and hit it all hard, all at once, all the time.

Bobbi Rebell:
Amazing advice, and it's so true about walking. I get all my best ideas when I'm walking. It's also a great way to socialize, instead of going somewhere and spending money on food that will cost you money and weight.

Steph Krikorian:
What was the scariest thing to write? Oh, a lot of it was scary. It set out to be a book on humor, you know, a humor book on all these crazy things I tried, and then as I wrote it, I'm like thinking, "Well, why did I do that?" I think a couple of things, quickly, how much weight has held me back in life. You know, we all wish we were a little thinner I think. I don't know. I can't speak for everybody.

Bobbi Rebell:
Me.

Steph Krikorian:
I think-

Bobbi Rebell:
I'm raising my hand.

Steph Krikorian:
Exactly. And we all wish that we could drop a few pounds, and I spent a little bit too much time obsessing about that. That was sort of disappointing, and I was surprised I was able to put that on the page, because I really don't like to talk about it. I think being single, you know, I kind of likened the dating at ... I'm 50 now, but this whole book took place in my 40s. It's like shopping at Marshall's or T.J.Maxx. Everything is picked over. It's like seconds right now. So, that was a lot for me to talk about. You know, I had a hard time with that.

Steph Krikorian:
The realization I came to through writing and through discussing it is that after doing the Marie Kondo, I Marie Kondo'd, the living crap out of my house, including my freezer, did the doors open up? I don't know, but I learned to say no to things that didn't bring me joy. I don't think that was her intent in the book. I think that was, as interesting as ... It wasn't a hard to write about that, but it was an interesting learning experience for me that that takeaway kind of came through the process of trying to be funny about folding my socks, rolling my socks a certain way, that all of a sudden I realized, wow, I have a hard time saying no to things. Now, I'm a little better at it.

Bobbi Rebell:
We're all working on that. I think that's a big theme these days is sometimes it's okay to just decline an invitation, even if you don't have a conflict. Just say, "I'm sorry. I can't make it," and don't elaborate.

Steph Krikorian:
Exactly.

 
“After doing the Marie Kondo..  I learned to say no to things that didn’t bring me joy.. that takeaway kind of came through the process of rolling my socks a certain way that I realized I have a hard time saying no to things.”
 

Bobbi’s Financial grownup tips:

Financial grownup tip number one.:

Buy what you want if you want to be trying things. That's always all good. But when Stephanie talks about buying the five packs, that applies to pretty much any upsell that you get in life. Yes. You do get a better price per item, but you also get more items than you want or need.

Financial grownup tip number two:

If you aren't sure that you understand how someone controlling your money gets paid, keep asking until you are beyond 100% sure. Stephanie is educated and smart and was literally writing about money for her job, but she made assumptions that were not correct.

As a financial grownup, I love that she takes ownership that maybe she didn't understand what she thought she did. It can happen to any of us, if it can happen to Stephanie. Read, and reread, and then, as Stephanie recommends, go do regular check-ins, as she now does, and of course be careful with automation. It is a great tool for regular bills and such, but that doesn't mean you shouldn't be checking as well. How are you doing on this front? Do you understand how people or companies that hold your money ore paid? Is free really free if there are maybe commissions or fees in there that you may not know about. Maybe they're disclosed in very tiny print, because if something is truly free, well, then how is the company making money? You need to ask what is going on on the other side.

Episode Links:

Follow Stephanie!

Some of the links in this post are affiliate links. This means if you click on the link and purchase the item, I will receive an affiliate commission at no extra cost to you. All opinions remain my own.

Advice, Authors, Financial Grownup, Investing, Journalists, Money, Personal Finance, Women Role Models, Women EntrepreneursBobbi Rebell KaufmanStephanie Krikorian, Financial Planner, Invest, Investing, Investing Tips, investing advice, ZenBender, Author, Money, money lesson
Financial Grownup Guide: Top new money books for grownups right now (August)
Financial Grownup Guide: Top new money books for grownups right now (August)
August Money Books Instagram

Bobbi reveals her favorite new money related books, and how to decide if they are right for you. This month’s picks include The Startup Squad by Brian Weisfeld and Nicole Kear, Grown and Flown: How to support your teen, stay close as a family and raise independent adults which is by Mary Dell Harrington and Lisa Heffernan, And then finally The Essential First-Time Home Buyers book: How to buy a house, Get a Mortgage and Close a Real Estate deal by Judy Dutton and Realtor.com editors.

Some ground rules:

There will be only positive comments. Because why waste your time telling you about something I don’t think is worth your time. 

Also - we limit our selections to books written by authors that appear on the podcast. In most cases they will have already appeared- so you can then go back and listen to their episode if you want to learn more. Occasionally, the episode will be in the future - so hopefully you will subscribe so you don’t miss it. 

Here are 3 books I truly enjoyed in the past month!

Book #1

The Startup Squad - which is aimed at kids but I will tell you it hits on themes and lessons many adults in business will truly benefit from.

Here’s what I liked about it:

  1. Don’t be fooled by the illustration on the cover or the fact that this is about a lemonade stand. This is a sophisticated book disguised as a kids book. The book covers a lot of territory.

  2. They get into extreme detail- for example: the cost of ingredients, pricing strategy and profit margin, organization and planning ahead, design and branding, the importance of selecting the right location to attract target customers- and of course how to figure out who your target customers are in the first place.

  3. The book addresses the more human issues associated with a business- including dealing with imposter syndrome, competition, and interpersonal relationships among team members.

Who is this book for?

This book is of course great for kids but I strongly recommend it for aspiring entrepreneurs. It covers all the bases. I also recommend parents read it and then discuss with their kids. Investors will also benefit because they can learn more about how to identify a business that is setting itself up for success, and the skillset to look for in founders. There are so many layered nuances to this book that it really creates a framework for understanding exactly what goes into a successful startup. I loved this this book and am thrilled it is the first in a series.

Book #2

Moving on the the next life stage- the teenage years. Here we have Grown and Flown: How to support your teen, stay close as a family and raise independent adults which is by Mary Dell Harrington and Lisa Heffernan,who are the founders of the #1 website for parents of teens and young adults. People magazine named them 2 of 25 women changing the world.

Here’s what I liked about it:

  1. While there are endless resources for new parents, the information overload thins out substantially as kids get older. But in this age of extended childhood and delayed adulthood, we all need more guidance

  2. While the authors have a lot of great advice, the book’s heart and depth comes from it’s broad sourcing of contributors. You feel like you have an army of advisors bringing you information you were either looking for- didn’t know you needed.

  3. They go there. Topics include the expected on family life and happiness, college admissions and academics. But they also tackle, love, sex and the ultimate taboo- mental health.. and yes even money. For example: in the chapter on college admissions, the authors point out the importance of understanding the financial costs- the sticker price, meaning the listed tuition, is not the whole story- or even close. Financial aid letters can be misleading And to make sure you understand the average number of years it takes a student to graduate- it is not always four. An example of the advice: Don’t let a small price differential keep you from choosing the school that is the best fit - but that debt also matters a lot and needs to be factored in.

Who is this book for?

Primarily it is for parents of kids ages 15 -25- the teenage and college years. But as the parent of a 12 year old- I can say it’s never too early to learn about these years and if anything it will make you appreciate the simpler times of younger kids.

Book #3

The third book I am recommending this month is The Essential First-Time Home Buyers book: How to buy a house, Get a Mortgage and Close a Real Estate Deal

Here’s what I liked about it:

  1. It is to the point. This book is going to get you the information you need, and is a great compliment to the realtor.com website- it is self contained and an easy shortcut for first time homeowners.

  2. It has fun and fascinating (and sometimes reality check) trivia. Did you know: the average in state move costs $2300? Moving out of state averages $4300!

  3. It cuts through the BS with recurring “myths” like the the fact that a new home doesn’t need to be inspected- or that you can’t buy a home if you have bad credit- even a score under 600. . The editors also tell you the truth that a human often won’t. For example: did you know that your appraiser works for the lender- not you. My favorite: 5 things never to say at a real estate closing.

Who is this book for?

Clearly people who are buying their first home. It’s a small book and you can literally carry it with you when you look at homes rather than fumble to look stuff up on your phone. But also current home owners can benefit- as can renters - because in the end every time we decide to rent or stay in our home- that is a decision made that should be done in comparison to the benefits or drawbacks of owning a home. This book lays out what you need to know- so that you can be deliberate in your decision whether or not to buy a home or upgrade or downsize to a new home

Episode Links:

Some of the links in this post are affiliate links. This means if you click on the link and purchase the item, I will receive an affiliate commission at no extra cost to you. All opinions remain my own.

Authors, Entrepreneurs, Family + Relationships, Financial Grownup Guides, Investing, Personal Finance, Women Role ModelsBobbi Rebell KaufmanBooks, Money Books, Money, Financial Grownup
To Give or to Lend with Her Money Matters Jen Hemphill (Encore)
To Give or to Lend with Her Money Matters Jen Hemphill (Encore)
Jen Hemphill Instagram

Jen Hemphill and her husband believe in supporting family, but when the author of Her Money Matters, and the host of the podcast of the same name, was asked to lend money to a relative, she realized it would come at a cost to her own financial well being. 

In Jen’s money story you will learn:

Jen Hemphill: The first time this came up was when we were first married, so this was almost, we'll be married almost 18 years, so this was our first year in our marriage. We're a military family, we were stationed in Clovis Air Force Base in New Mexico.


We were really still trying to get to know each other, all the newlywed stuff. He got a call from my brother-in-law, and he, my brother-in-law apparently had hit a financial hiccup, and he reached out to his brother for help. Now, I grew up in a household that was very giving. My parents literally grew up in Columbia, and they always helped people. There was always people that would stay at our home, with their family, or some friends. My parents were always givers, even when they didn't have to give.

I saw that a lot growing up. I knew the financial struggles that they dealt with.

Bobbi Rebell: Were they dealing with financial struggles because they gave more than they could afford?

Jen Hemphill: I don't think it was that. That might have been a component, but not all of the components. Right? But it was partial, because I saw them giving, and giving, but they were still trying to get their money stuff together. Right? I saw a lot of that. When I met my husband, one of the things that I love about him is his big heart. He is definitely a giver. He's also a spender.

Bobbi Rebell: Are you the saver to a spender, by the way?

Jen Hemphill: I'm also a saver.

When my brother-in-law reached out to him, we had the conversation, granted again, we were newlyweds. We were trying to figure this thing out, and I can't remember the exact $1.00 amount, but it was more than $500.00.

Bobbi Rebell: Do you know what kind of situation it was? Was it like a medical operation? Was it a business situation?

Jen Hemphill: It was behind on bills, collections. Those type of things.

Bobbi Rebell: Your husband wanted to give him a loan, not a gift, a loan?

Jen Hemphill: Well, he told me a loan, but I knew him. He's a giver. He's not going to expect it back. Where I was more, in my mind, a lender. If you're asking us to lend you money, I'm like, “Okay. You're going to pay us back.” We had debt. We had things that we needed to pay for. Things that we needed to purchase. Literally, at that time we just had our checking account, and our savings account and literally whatever savings went into our savings account, so it was the emergency account, it was when we overspent, it was for big purchases, so everything that was needed that wasn't in our checking account came from the emergency fund. It literally got depleted fast, and it also diminished our abilities to have that extra money to pay the debt that we had. Right? It was a very conflicting time. We had this conversation-

We lent him the money, or actually gave him the money, and then never saw it back.

In Jen’s money lesson you will learn:

What we've done is, we included this in our budget, so we set some money aside in a different account, and whenever a family member needs help, we just look at what's in that account, so that way it doesn't really disrupt what we're trying to do financially, and the goals that we're trying to achieve. There's a designated amount that goes in there every month, and currently has just been to help grand mom with some bills, and that's what we work with.

Bobbi Rebell: It sounds like you've basically come to terms with you're just going to gift it.

Jen Hemphill: Yes, because then emotionally we don’t get upset, “Oh, my gosh, we said we were going to lend it, we never got it back,” so I've learned and grownup.

Over the years to really, when it comes to family, and friends, and when it deals with money, it's just a gift.

In Jen’s money tip you will learn:

Basically, my money tip is, what we tend to do, let's say we're at the grocery store, and maybe we have some coupons, always strike up a sale, and we're winning. We celebrate, “Yes. I've saved X amount this trip,” but what's important here is, yes, we can celebrate the $20.00, or $10.00, whatever that amount is that we saved, but what are we going to do with that money? Because we're missing out if we're just celebrating it, that we saved that money, but we're not doing anything with it.

Literally, we have the bank up on our phone. Right? And with so many people having smart phones, you can download your bank app, and whatever that amount of money that you save, transfer it to your savings, or transfer it to pay off some debt. Whatever you deem is best in your situation. But doing that versus just leaving it in there, you know it disappears. That money doesn't have a job, if you will, it just disappears. We've seen it time and again. I know I've experienced it, I'm sure you Bobbi have experienced it yourself.

A little bit about Jen’s book:

The book, oh, my goodness. The subtitle of the book is, The Missing Truths From Traditional Money Advice, so when we think of traditional money advice, we think about, we really hear, “Save more, spend less, and get out of debt,” but I know from my own experience, I had the financial books, I've read those financial books, I applied what the experts told me, and I was still finding myself stuck. In the book, I really share the lessons that I learned, and what I found out that really kept me stuck after doing all the things right.

In my take you will learn:

Jen's story was a reminder that family really can be everything, however you define family. We should bend over backwards to help out the people that we care about in our lives. In Jen's case even though her brother-in-law did not pay back that loan, as time went on the asks for financial help from family did go down.

Financial Grownup tip number one:

Remember it's hard for people to ask you for help, so factor that in when deciding what to do when someone comes to you asking for help. If you are able to help them with their financial troubles, it's usually a better idea to just give them money. If you lend them money, it becomes yet another thing that they need to pay back in a very stressful time. Of course, it can also put stress on your relationship with them. They might avoid you. They might feel like you're judging them, if they buy something. It's better to just keep it clean, give them the money. You know what? Someday you may be in a position where you need their help, and they'll be there for you.

Financial Grownup tip number two:

Jen talked about compartmentalizing money. Setting funds aside in different accounts for different purposes. This can be a great way to deliberately save for certain things like a slush fund for relatives that need help. Another thing that I have found can make a lot of sense to do is to put a certain amount of money, or allocate a certain amount of money, maybe on an annual basis to support friends, charities, causes that they care about.

That way when people ask for you to support whatever they're involved in, it might be a charity run, or some other fundraising effort, a benefit, you can take the money out of that fund, and if at some point in the year, I mean, you got to be real, here, the funds could run out, you can tell them, “Look, I've completed my giving for the year, but I will send a donation in January.” People understand. Your resources are not unlimited even if your heart is.

 

EPISODE LINKS

Get Jen’s book Her Money Matters

Jen’s website - www.JenHemphill.com

Follow Jen!

Twitter - @jenhemphilll

Instagram - @jenhemphill

Facebook - @Jennifer.Hemphill

Some of the links in this post are affiliate links. This means if you click on the link and purchase the item, I will receive an affiliate commission at no extra cost to you. All opinions remain my own.

Advice, Business, Career, Financial Grownup, Financial Independence, Investing, Women Role Models, Women EntrepreneursBobbi Rebell Kaufmanher money matters, Jen Hemphill, mompreneur, money expert, Podcast, military wife, money coach
Financial Grownup Guide - Top new money books for grownups right now (May)
Financial Grownup Guide - Top new money books for grownups right now (May)
FGG - May Money Books Instagram- WHITE BORDER BOOKS.png

The best new money books for Financial Grownups.

May 2019 Edition.

Once a month we feature a handful of books by authors that have appeared on the financial grownup podcast and share with you some of the reasons I chose to have the authors on the show. My promise is to be candid about how you can decide if the book is the best selection for your time and goals. For example,   Dig your Heels in by Joan Kuhl. While it has the most amazing strategies for staying in the corporate workforce, if you are in full startup mode or already feeling pretty solid in your entrepreneurial ventures, it maybe not the best investment of your reading time. 

Some ground rules:

There will be only positive comments. Because why waste your time telling you about something I don’t think is worth your time. 

Also - we limit our selections to books written by authors that appear on the podcast. In most cases they will have already appeared- so you can then go back and listen to their episode if you want to learn more. Occasionally, the episode will be in the future - so hopefully you will subscribe so you don’t miss it. 

Here are 3 books (+ a bonus book) I truly enjoyed in the past month!

Book #1

Let’s start with the one with one that is by Erin Lowry, whose brand “Broke Millennial’ no longer applies to her- and actually for those who follow her- never really did if we are being honest. She’s always been pretty money conscious. 

Here are three things I liked about her new book Broke Millennial takes on Investing. A beginner’s guide to leveling up your money. 

  • There is no attitude. Erin takes ownership of the fact that her readers literally may know nothing about investing and will take her explanations down to the most basic level. The things we all pretend to know because we think we should. So for example, when she explains what asset allocation is, she uses the term risk tolerance but then takes the time to explain what that is. 

  • She owns the fact that she is the writer- and not always the expert- so she seeks out experts including Jen Barrett from Acorns, Certified Financial Planner Doug Boneparth and Jill Schlesinger- the latter two have been on this podcast- and yes we’ll have links to them and their books in the shownotes as well.

  • And finally- Erin gets personal about the financial grownup lessons she learned from her parents- and very specific. For example, her dad declared at age 24 that he wanted to be a millionaire by age 40. Did he? You probably guessed correctly but read the book to confirm.

Who should read this book:

Anyone who hears about investing and is curious but doesn’t know where to start, as well as beginners who want to get a better handle on what they are doing, and a little validation along the way.


Book #2. 

Dig Your Heels In. Navigate Corporate BS and Build the Company You Deserve by Joan Kuhl.

This is just what it sounds like- it’s about finding a way to stay in a corporate job when you really want to tell them to go to you know where. 

Here’s what I liked about it:

  • Her strategist are specific and laid out for the reader- but there is also no bs that you have to do the work. For example, she talks about different ways to achieve goals. And is honest that you have to figure out who has the power to get you to that goal. But you have to do the work to seek out those people and find a way to get them to advocate for you. There are solutions here but no easy fix. She’s just being honest.

  • There are some big revelations that I had no idea about- things like how opportunities and promotions are really decided behind closed doors that you think you know but you don’t. Like pre-gaming for reviews. Read the book. Joan has secrets.

  • She did a lot of legwork and has interviewed an unbelievable number of high level women and men so there is propriety research in this book. Specific first person stories of how the most successful people make it work and yes, dig their heels in. 

Who should read this book?

I’m going to say both genders, but the truth is Kuhl is speaking primarily to women.. in large part because more women quit the corporate workforce in droves to deal with the demands of family- and these days they often start their own thing. But for women who would like to find a way to work things out, this is the best thing ever. As I said when Joan was on the podcast, I wish I had this book when I was at Thomson Reuters as a tv anchor and trying to balance my family life. 


Book #3:

An Economist Walks into a Brothel and other Unexpected Places to Understand Risk by economist Allison Schrager who is also with Quartz. 

Here’s what I liked about it:

  • If we are being honest, the title. I mean- I love that Allison Schrager had the guts to just put it out there there is definitely a shock value to this book.  

  • The fascinating different stories illustrating risk and reward in industries from surfing to paparazzi to the movie business.. and of course the brother. You learn economics- but you also learn a lot of behind the scenes dirt about these very cool niche businesses.

  • The author has a real point of view. She takes a stand. For examples, Schrager gives us permission- and justification to NOT take risks that don’t make sense. “Taking more risk than necessary is inefficient.” 

Who is this book for?

People whose eyes glaze over when someone starts talking economics and risk. In a way- It’s for the nerds that haven’t yet come to terms with their nerdiness.. we’re turned off by insider jargon and boring explanations-  but secretly really do want to know all the data- just in a really fun and accessible way. This book is story telling at it’s finest. 

Bonus Book (because technically it is not a money book):

Travel Anywhere and Avoid Being a Tourist by financial grownup guest Pavia Rosati and her Fathom co-founder Jeralyn Gerba

The authors met as editors at Daily Candy and then later teamed up to launch the travel platform Fathom. It is an editorial website and so much more. You can find digital guides- as well as help planning your travel through their concierge service which I have personally used and loved when I went to Iceland.

Here’s what I liked about the book:

  • I love it for all the reasons you should not read it on a kindle! This is just a beautiful book to just experience. Stunning photos and a beautiful layout and sharp focused writing. 

  • There are actual money saving tips - like hostels where you feel like you are staying at a boutique hotel, and a nice little travel hacks section with tips like how much to invest in a top of the line suitcase, what to check on your data plan before you go and knowing your auto insurance coverage in advance. Doing these things can potentially save you a ton of money.

  • The Digital Nomads chapter. Because although in theory we talk a lot about shutting off all the electronics when we travel, sometimes it’s just really nice not to be judged when we choose not to. Put another way- what if you get to travel because your work is portable- not everyone with a laptop on a beach is a slave to their job- it could be quite the opposite. 

Who is this book for:

People that already travel a lot and are looking for fresh perspectives, and those who want to travel but just don’t know where to get started.I personally can feel overwhelmed and so fearful of making a mistake that I can’t even get started.  And of course it’s great If you just want to look at beautiful pictures and learn about all the world has to offer- even if it’s not on your calendar in the immediate future. This book can just be for the love of relaxing with a special book. I’m not giving away my copy any time soon. 

Episode Links:

Some of the links in this post are affiliate links. This means if you click on the link and purchase the item, I will receive an affiliate commission at no extra cost to you. All opinions remain my own.

Financial Grownup Guides, Authors, Entrepreneurs, Investing, Money, Travel, Women Role ModelsBobbi Rebell KaufmanBooks, Money Books, Broke Millennial, Erin Lowry, Dig Your Heels In, Joan Kuhl, An Economist Walks into a Brothel, Allison Schrager, Travel Anywhere, Pavia Rosati
Financial Grownup Guide- 3 actionable investing tips with "Broke Millennial Takes on Investing" author Erin Lowry.
Financial Grownup Guide- 3 actionable investing tips with "Broke Millennial Takes on Investing" author Erin Lowry.
FGG - Actionable Investing Tips Instagram WHITE BORDER.png

Broke Millennial’s Erin Lowry joins Bobbi with 3 specific things you can do today to upgrade your investing strategy, along with her take on how to be a successful investor.  For example: How much should you be paying for your investments? How long should you set it and forget it- when do you check in on your investments? What is an investment audit? Are all index funds the same? Plus a preview of her new book “Broke Millennial Takes on Investing’ . How to tell if your goals are in line with the investment choices you are making? And what to do if you don’t understand an investment term but don’t want to ask. 


Here are the 3 things you must know about actionable investing tips

  • Increase contributions in small increments

  • Pay attention to expense ratios- they matter so much

  • write down goals and check in once a year


Episode Links:


Check out Erin's website -

www.BrokeMillennial.com

Follow Erin!

Some of the links in this post are affiliate links. This means if you click on the link and purchase the item, I will receive an affiliate commission at no extra cost to you. All opinions remain my own.

Financial Grownup Guides, Authors, Entrepreneurs, Investing, Millennial Superstars, Role Models, Women Role Models, Women EntrepreneursBobbi Rebell KaufmanErin Lowry, Millennials, Broke Millennial, Investing, Investing Tips
Financial Grownup Guide: 7 ways to invest and make a positive impact with philanthropist Ellen Remmer of Invest for Better
Financial Grownup Guide: 7 ways to invest and make a positive impact with philanthropist Ellen Remmer of Invest for Better
FGG - Invest Instagram

Money is powerful and while it can’t solve the world’s problems, how we invest and the strategic decisions we make can have a huge impact. Learn what you need to look for in an investment, the questions to ask, and the best ways to make sure your investments have the impact you want. 

7 ways to invest and make a positive impact

  1. First you'll want to find out what you own

  2. The importance of figuring out what you care about most impacting through your investments

  3. Then check out the ratings for your current investments

  4. Why you will want to become a shareholder activist

  5. Why you want to consider banking with a community bank, a credit union, etc.

  6. Why this is the most important thing to do - ask questions

  7. And last, but definitely not least - Do something! Even with small amounts of money.

Episode Links:

https://investforbetter.org

https://www.tpi.org/about/people/ellen-remmer


Some of the links in this post are affiliate links. This means if you click on the link and purchase the item, I will receive an affiliate commission at no extra cost to you. All opinions remain my own.

Financial Grownup Guides, Investing, MoneyBobbi Rebell Kaufmaninvesting
Honey you bought the wrong life insurance with Broke Millennial’s Erin Lowry
Honey you bought the wrong life insurance with Broke Millennial’s Erin Lowry
Erin Lowry Instagram

Erin Lowry, author of Broke Millennial Takes on Investing thought her new hubby was all set when he assured her he had bought life insurance to protect his parents obligation to his student debt. But a chance discovery revealed the insurance was not what either of them thought he had purchased. 

In Erin's money story you will learn:

  • Erin is a newlywed - Congrats again Erin!!

  • Her husband had a huge amount of student debt that his parents had co-signed for

  • She suggested that he get life insurance so that, in the unfortunate event that he were to lose his life, the debt wouldn't pass to his parents

  • She found out that the life insurance he got was Whole Life insurance instead of Term Life insurance

  • Why Whole Life Insurance wasn't the best for him

  • The difference between Whole Life Insurance and Term Life Insurance

In Erin’s money lesson you will learn:

  • Fiduciary means they are required to act in the best interest of you. Suitability means they just can’t do anything that is harmful to you.

  • Her husband was sold a product that wasn't the best fit for him


In Erin's everyday money tip you will learn:

  • When she receives change back from a purchase, she saves the $5 bills. In 2018 she saved over $1000 to use towards her honeymoon


In My Take you will learn:

  • There’s a lot of financial jargon out there. If you are making a financial decision, make sure you take the time to look up the words you don’t understand.

  • I’ve been talking a lot recently about what I call the Family Ecosystem. You are not just responsible for yourself, even if you are single.


Episode Links:


Check out Erin's website -

www.BrokeMillennial.com


Follow Erin!

Some of the links in this post are affiliate links. This means if you click on the link and purchase the item, I will receive an affiliate commission at no extra cost to you. All opinions remain my own.

Transcription

Erin Lowry:
My editor wrote me back and said, "Hey, this amount seems pretty high for a mid 20-something who's healthy." And I thought, "You know what? You're right." Then it dawned on me, "Uh-oh, he probably got a whole life insurance policy."

Bobbi Rebell:
You're listening to you Financial Grownup with me, certified financial planner, Bobbi Rebell, author of How to Be a Financial Grownup, and you know what? Being a grown up is really hard, especially when it comes to money, but it's okay. We're going to get there together. I'm going to bring you one money story from a financial grownup, one lesson and then my take on how you can make it your own. We got this.

Bobbi Rebell:
Hello Financial Grownup friends. Have you ever had a conversation with someone that in your mind was totally straight forward? The conversation was totally straight forward with no room for error or misunderstanding, super clear and clear to them, they said they got it, but there was one deal once you didn't realize you had been silent to and they didn't know to ask about and that caused things to go very wrong? Well, it happened to newlywed author, Erin Lowry, and it serves as a real warning to all of us because it can happen to a money expert and her new husband.

Bobbi Rebell:
Welcome, by the way, and thanks for joining us, new listeners, so glad you have found us. DM me if you have a sec, bobbirebell1 on Instagram, Bobbi Rebell on Twitter and let me know how you discovered the show and what you would like to hear. We do this for you. Let's get to our guest. Her new book is Broke Millennial Takes On Investing, which after you hear more about it will definitely be something you want to pick up. Here is Erin Lowry.

Bobbi Rebell:
Hey, Erin Lowry, you're a financial grownup. Welcome to the podcast.

Erin Lowry:
Thanks for having me.

Bobbi Rebell:
I'm so excited. I've been waiting to have you on my show for over a year and we said we're going to wait and hold off until your next book comes out and it's happening. It is Broke Millennial Takes On Investing and people should know this. This is a followup to your first book, Broke Millennial, and there's actually going to be a third one, which is pretty unheard of to do like a three ... Do we call it a hat trick to get a three book deal? That's pretty amazing. So congratulations on all.

Erin Lowry:
Thank you.

Bobbi Rebell:
We're going to talk more about Broke Millennial Takes On Investing, but first we're going to do your money story. You're a newlywed. Congratulations on your wedding and that comes with merging finances and you start to learn about the love of your life in different ways. In this case you learned that your now husband did the right thing, but made the wrong choice in a big financial decision and it just shows how complicated things are. It had to do with student loans and insurance. Tell us the story.

Erin Lowry:
It also shows that when you give somebody advice they take it sometimes, but don't take it in the way that you intended, which was a big part of what happened here. And for context, my husband, whom I call Peach, he has student loans. When this whole thing went down, first of all, it was not an insignificant amount. I don't really share his number, but it was a hefty chunk of change.

Bobbi Rebell:
And we're talking about student debt?

Erin Lowry:
Student loan debt. Yep. And a big chunk of those student loans were private student loans that his parents had cosigned on, which meant that if something happened to him, his parents would still be responsible for paying off those loans and by something happening, I mean, if he died, and the debt was still there. His parents would still be required to pay off that student loan debt. Now, I want to say right now, some companies have changed their policies and started to discharging debt and most federal student loans can be discharged in death, but not necessarily the case with private.

Erin Lowry:
After we have this conversation, this was a few years before we got married, I said, "I think it would be prudent for you to get a life insurance policy on yourself because seriously having forbid something happen, your parents are still on the hook for a lot of money and that could really impact their ability to retire. So you should have a life insurance policy that has them as the beneficiaries."

Bobbi Rebell:
Right. And the good news is he took your advice.

Erin Lowry:
He did. And I just kind of said it. I wasn't even necessarily like, "Go do this right now." He went and got a life insurance policy and a few months later I was actually writing an article on life insurance and I interviewed him for it. He told me how much he was paying every month and what the payout would be. And I wrote the article up and my editor wrote me back and said, "Hey, this amount seems pretty high for a mid 20-something who's healthy."

Erin Lowry:
I thought, "You know what? You're right." And then it dawned on me, "Uh-oh, he probably got a whole life insurance policy." So I go back and I went, "Hey babe, what kind of life insurance policy did you get?"

Bobbi Rebell:
"Hey babe, let's talk life insurance tonight?"

Erin Lowry:
So sexy. It's such a great topic. He had indeed gotten a whole life insurance policy and I tried not to get any sort of aggressive about it. He was like, "Why?"

Bobbi Rebell:
He's like, "Aren't you proud of me? I went out and got life insurance just like you said," and he had actually talked to somebody. He didn't even go out blindly and just kind of buy it ... I don't even know if you can literally just buy it on the web. There's obviously a step that you have to take. But he did proactively talk to somebody about it and get "advice" and I put advice in quotation marks.

Erin Lowry:
And that was where the problem was, is the person that he talked to was essentially pitching him a product, and listen, the pitch on whole life insurance is great. It does sound really good, I get it. But on the backend, this salesperson, and I'm going to call them a salesperson also probably got a commission for signing him up for whole life insurance. This is a fiduciary versus suitability conversation. Fiduciary meaning it's in your best interest. Suitability, just meaning it's suitable for you. Whole life is suitable for him, but it certainly wasn't the best product for him, what his needs were and what his age was.

Erin Lowry:
Even what it is now, it doesn't make sense for him.

Bobbi Rebell:
Could you explain a little bit about why? Why was whole life insurance not right for him and how is that different from term life, which is what was appropriate for him.

Erin Lowry:
Without getting into the weeds on technicalities, a big part of it really is one, the monthly premium that you're paying on a whole life insurance policy is usually significantly more expensive than term. Significant can be kind of a subjective term, but he was at the time in his mid 20s trying to pay off student loans, living in New York City and he's a public school teacher. So $25.50 a month in his budget does make a really big difference.

Erin Lowry:
That was thing one and two term life insurance is usually much lower monthly payments, typically a higher payout. It's just for a shorter period of time and it's a use it or lose it policy. So if you stay alive, which "Yay! You stay alive," and don't use it, the policy eventually just expires. So some people don't like this feeling of, "Well, I never see a return on my money," but that's true. Really most insurances that we pay for, if you have auto insurance and never get in a car accident, yay, you didn't get in a car accident, but also what were you paying for? You we're just paying for the protection.

Bobbi Rebell:
Right, so term life does not have an investment component and therefore when the term is over, if you do not use it, which we hope we don't use it, there is nothing left. There's no benefit at all. You have just spent the money and the money that you spent on those premiums is gone, but it is less money.

Erin Lowry:
It's less money. You can be putting the money that you're not spending towards other financial goals and or investments. The other thing you've got to think about is does this particular product make the most sense for you? Whole life insurance does make sense for some people. It didn't make sense for him at the time. Maybe way down the line it will make more sense, but right now all he needed was a basic simple term life insurance policy.

Bobbi Rebell:
What finally happened?

Erin Lowry:
He called the folks back up that had sold him the whole life insurance policy and said, "Hey, this isn't actually what I wanted. I want a term policy." The woman tried to talk him into staying with the whole, he was adamant-

Bobbi Rebell:
No. Oh, I hate that.

Erin Lowry:
Yep. So there was a back and forth, but he was adamant about switching to term. He switched to term, has a really basic policy. Now that we're married, actually we have to have a whole other conversation about life insurance as well in our own estate planning, but he still does have that policy because those student loans still do exist. We're working on getting rid of them and his parents are still the beneficiary because again, if something happened to him, even though he and I are married, if something happens to him, his parents would still be on the hook for those particular student loans. They didn't transfer it to me in our marriage.

Bobbi Rebell:
And he was able to get out of the whole life insurance policy? He wasn't locked in?

Erin Lowry:
He wasn't locked in. He was able to switch.

Bobbi Rebell:
That's great.

Erin Lowry:
Yeah, it's the same company actually. He didn't switch companies, but he did completely switch policies.

Bobbi Rebell:
What is the lesson for our listeners? It sounds like they really need to understand fiduciary versus a salesperson.

Erin Lowry:
The big thing is understanding fiduciary versus suitability. And for me, I also use this story in my book to talk about sniffing out a scam. I don't want to say he was necessarily scammed in the way that we traditionally think, especially when we think about investing, but he was definitely sold a product that wasn't the best fit for him. And I want you to consider that anytime you're working with any sort of professional, because they don't necessarily have your ultimate best interest in mind, they might also have their bank account in mind and you need to know how that person is getting paid.

Erin Lowry:
For instance, if you're a financial adviser gets paid on commission, you need to understand how that's going to be impacting your overall portfolio. What products are they putting in there that they get a kickback for? Now, I'm not saying everybody that takes commission is working in any sort of nefarious ways, but I am saying you need to make sure you understand exactly what that means for you and your investments. And again, fiduciary means they are required to act in the best interest of you. Suitability means they just can't do anything that's harmful to you.

Bobbi Rebell:
All right, let's talk about your everyday money tip. It's something you really do and it has made a big difference in your life.

Erin Lowry:
Yes, and this is going to sound so silly to people, but I like to save $5 bills, and I know a lot of people don't use cash anymore. I still do like to use cash and every single time I get a $5 bill back when I pay for something in cash, I put it inside in a little jar and just let that money accumulate. And then eventually I put it all in my bank account. And in 2018, I saved over a thousand dollars to put towards my honeymoon fund account just with this tiny little trick.

Bobbi Rebell:
Love that. So let's just talk briefly about your latest book, number two, out of your three book series, Broke Millennial Takes On Investing. Tell us more about what sets this apart and the kind of advice that people could expect from the book?

Erin Lowry:
This is a true beginners guide to investing and that's the way I like to position it. Also, I'm not an investing expert. What I like to consider myself in this book is a translator. So I went out and interviewed a bunch of very, very smart, very experienced people and was able to distill this into a more digestible package. But the reason I wrote the book is because, listen, there are great investing books out there, but a lot of them do kind of operate under the assumption that you have some base level knowledge when it comes to investing. And frankly, most of us don't when we're just getting started.

Erin Lowry:
So I wanted to write a book that bridged the gap. It assumes that you have no background in investing, no base level knowledge and if you do, great, there's still content for you, but you don't need to know what asset allocation or index funds are or time horizon means or anything like that in order to pick up my book. It also really talks a lot about the emotional side of investing and how to kind of get control over that because a lot of us do fear and are intimidated by the market.

Bobbi Rebell:
And I love the fact that you actually have a ton of just plain definitions in the book.

Erin Lowry:
Yes. There's a whole chapter about having this sort of baseline understanding of terminology and I even kind of apologize and the beginning of, "Hey, I know this is about to get real technical bear with me," but it's important that you understand the language because these are the terms you're going to hear when you're out there as an investor and you want to make sure you know what people are talking about.

Bobbi Rebell:
Yes. And never be afraid to ask a question that you "think is dumb," because there've been times I've asked questions that I'm embarrassed to ask and you know what? The person I'm asking doesn't actually know the answer. They're kind of faking their way through it, so don't fake it and pretend you understand something when you don't. It's okay. Ask the questions or look it up in Erin's book. There you go.

Erin Lowry:
That was actually one of my favorite parts of writing this book is learning terms and like, "Oh, that's what a basis [inaudible 00:12:22] is." It really wasn't helpful.

Bobbi Rebell:
A lot of people gloss over those things and don't actually know what they mean. You would be surprised. Just say. Great. Give us all your socials and where people can find out more about the book and you.

Erin Lowry:
I am on Instagram @brokemillennialblog, on Twitter @BrokeMillennial, Facebook the same. You can find a lot of information about me on my website, brokemillennial.com, and both my first and second books are available wherever books are sold. Amazon, Barnes & Noble, Powell's, Indie books, hopefully your local bookstore and I always like to make a plug for your local library and if it's not there, please request it and get it on the shelf.

Bobbi Rebell:
And make sure everyone follow her on Instagram. She does great AMA, so that's one of my favorite parts of all of your social. So thank you Erin.

Erin Lowry:
Thank you so much for having me.

Bobbi Rebell:
Okay, my friends. Let's do this. Financial Grownup tip number one. There's a lot of financial jargon out there. Erin talks about it a lot. If you are making a financial decision, make sure you take the time to look up the words you don't understand. I get it. It can be embarrassing to ask someone something you think you should know, but by the way, a lot of times those people are nodding along pretending they fully get it and they may not or they may think they get it and they don't really know the questions to ask.

Bobbi Rebell:
As was the case with Erin's husband where he didn't know to ask exactly what kind of life insurance because he didn't know and he certainly wasn't educated by the salesperson what to ask and what the nuance differences are between different kinds of life insurance. So Erin has a lot of definitions in her book, but you can also check out websites for example, I like a website called Investopedia. It breaks down exactly what things really mean. Takes away the jargon.

Bobbi Rebell:
As I often say, the IRS website. Yes, the irs.gov website is also great at clarifying how certain things work. You forget about this, but a lot of the savings vehicles and retirement plans that we have are named after their tax code, like the 401k or the 529. Those numbers, that's the meaning of the numbers. They're actually part of the tax code. I know it's kind of crazy, but that's our system.

Bobbi Rebell:
Financial grownup tip number two. I've been talking a lot recently about what I call, the family ecosystem. You're not just responsible for yourself if you're going to be a financial grownup. Even if you're single, you likely have financial ties to members of your family you may not even realize. For example, you may be with somebody who's your partner. They may have ties that both of you aren't fully aware of in terms of top of mind. If you really think about it, you are and that's what I'm asking you to do, but it may not be the first thing you think of.

Bobbi Rebell:
You think of yourself as just single. It could be something like in the case of Erin's new husband, co-signing on debt of some sorts, student debt in that case. Maybe it's a car loan or even a mortgage or maybe you and your siblings could find yourselves in the future caring for parents or another member of the older generation and you have financial responsibilities. You may need to pick up the pieces of something that they did not do.

Bobbi Rebell:
Maybe they didn't save enough for retirement. This could be something that you get involved with. Maybe you'll inherit something with your siblings. The point is make sure that you know and that you talk about it with anyone that's a stakeholder. Erin didn't cosign her husband's student debt, but she is definitely a stake holder. Thanks so much for spending this time with us. Please subscribe. We have an amazing spring lineup of guests you don't want to miss, and we are also doing some listener requested topics on the Financial Grownup guide series that we roll out on the weekends. So feel free to send in suggestions on the socials.

Bobbi Rebell:
You can DM me at Instagram @bobbirebell1, on Twitter @bobbirebell and our email is hello@financialgrownup.com. Big thanks to Broke Millennial, Erin Lowry, for helping us all get one step closer to being financial grownups.

Bobbi Rebell:
Financial Grownup with Bobby Rebell is edited and produced by Steve Stewart and is a BRK Media production.

Authors, Millennial Superstars, InvestingBobbi Rebell KaufmanAuthor, Erin Lowry, Broke Millennial, Entrepreneur, Life Insurance