Transcription
CarrieSheffield:
I was like, "Well, what am I going to do with this? I don't want to waste it. I don't want to have this inheritance from my grandfather go down the drain when he had worked so hard for it." I was petrified because I had not been prepared. Unfortunately, I put all my eggs in one basket.
Bobbi Rebell:
You're listening to Financial Grownup. With me, Certified Financial Planner, Bobbi Rebell, author of "How to Be a Financial Grownup." But 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 got this.
Bobbi Rebell:
Hey, friends, welcome to another episode of Financial Grownup. As you heard in the open from our guest, diversification was not in her investment vocabulary when she came into a nice pile of money at a very young age. She is Bold CEO, Carrie Sheffield. You would not know it from the badass leader that she has become, but Miss Sheffield came from a very different world. Carrie grew up Mormon, a faith that she has since left. Carrie studied journalism at Brigham Young University and later went on to graduate school at Harvard.
Bobbi Rebell:
She is now a prominent and prolific journalist and commentator. You've probably seen her almost on a daily basis at CNN, MSNBC, Fox, countless other media outlets. This girl is everywhere. Oh, by the way, she is as I mentioned, the CEO of Bold, which is a growing digital news and cultural platform. She is also a dear friend. Here is Carrie Sheffield.
Bobbi Rebell:
Carrie Sheffield, CEO of Bold, you are a financial grownup. Welcome to the program.
CarrieSheffield:
Hey, Bobbi, great to be here. Thanks for having me.
Bobbi Rebell:
We're coming up on how many years of Bold, two now?
CarrieSheffield:
Yes, it was two years on November 30, 2017.
Bobbi Rebell:
Happy anniversary a little bit late. You have Bold, you have your main show, you have Bold Business, and now new 4/20/18, Bold Life. Tell me about that.
CarrieSheffield:
Absolutely, thank you. Bold Life is our third show, our third main vertical. Our Bold Politics is our keynote show, marquis show that I cohost with Clay Aiken from American Idol, left-right political dialog. Bold Business is a show about entrepreneurship, innovation. This third vertical will be Bold Life. Our host is Miss Kirsten Haglund, a former Miss USA., who battled an eating disorder before she won her crown, and spent her platform bringing awareness to eating disorders.
CarrieSheffield:
The broad themes of Bold Life will be around living your boldest life possible, so themes around personal development, themes around bold women, how to empower women. We'll have a segment called Bold Soul, looking at social entrepreneurs who are overcoming amazing obstacles and changing the world.
Bobbi Rebell:
Where can people find this? Is it just sign up for your Facebook page and you get notifications? Cause they're very interactive shows.
CarrieSheffield:
Absolutely, we love to have people engaging with us on social media in real time with the show. We've got A-listers who are coming on as guests. You can watch it on Facebook.com/BoldTV. You can also go to our website, Bold.global, B-O-L-D dot G-L-O-B-A-L. We've got show clips there, notifications, follow us on Twitter, Bold Global Media, and join the discussion.
Bobbi Rebell:
Awesome. All right, now I do want to talk about your money story that you brought. This is very traumatic. We all think, "Wow, wouldn't it be great if we just came into a pile of money, and all of our problems would be solved." But not so much, tell me what happened.
CarrieSheffield:
Sure, well as they say in "Mo Money Mo Problems," and that happened with me when I was in my early 20s. I had spent my childhood, my early childhood, in poverty. My parents, my Dad, he is mentally ill, and so he just had a hard time holding down a stable job. We spent a lot of time in trailer parks and in mobile homes. My brother was born in a tent. It was just a really unstable childhood, and I really wasn't taught much about money at all.
CarrieSheffield:
Then when I was in my early 20s, I had some inheritance that I got from my grandfather that was given to me because I had been an adult and the property that my grandfather had invested in had been sold at that point in my early 20s, and so it came to me directly. It wasn't a huge amount, but it was enough to where I-
Bobbi Rebell:
But you had nothing, so it was a huge amount. Everything's relative.
CarrieSheffield:
Yeah, exactly, exactly.
Bobbi Rebell:
It was a life changing amount.
CarrieSheffield:
It was. It was one of those moments where I had to completely reframe how I think about money. I was actually traumatized when I found out because I was like, "Well, what am I going to do with this? I don't want to waste it. I don't want to have this inheritance from my grandfather go down the drain when he had worked so hard for it." I was petrified because I had not been prepared. I hadn't been given training. I just kind of paralyzed myself. Unfortunately, I put all my eggs in one basket. I invested in a TIC structure. It's similar to a REIT.
Bobbi Rebell:
A REIT is a real estate investment trust.
CarrieSheffield:
Exactly, yes. The type that I was in was a tenant in common, which is a similar structure. It ended my cratering with the financial crisis. It was multi-family real estate. It ended up just being this debacle, where the management said they needed a capital call if we didn't want to lose our investment, but the loans were underwater.
Bobbi Rebell:
The capital call, just to explain, would be you would have to put in more money effectively, which you did not have.
CarrieSheffield:
Exactly, I was going to have to take out student loans. I was going to have to max out credit cards because I was in graduate school at the time.
Bobbi Rebell:
Oh my goodness.
CarrieSheffield:
It was so traumatizing. I thought I might have to drop out of school to feed the beast. It just ... Wow, the trauma was very real.
Bobbi Rebell:
What happened in the end?
CarrieSheffield:
Well, what happened was ... I had gotten into the investment from a family member, who I loved but at the same time had himself and his family had a much more diverse portfolio. For him, it wasn't that much of a big loss because he had so many other options and eggs in baskets he had put in. But for me, it was pretty much almost all that I had. That's one lesson I had, which was to learn to separate family love from just hardheaded analysis, which I had not taken the time to do because I was so inexperienced in matters of finance.
CarrieSheffield:
But what ended up happening was that he did stand with me and we were able to get a few other investors to the point where we basically became activist investors. We told the management, "Hey, let's stop this. We're not going to allow this to happen where you're going to get more money from us, even while we don't even trust your management of this investment. Let's find a solution here." Because we had reached enough critical mass, we were able to leverage and negotiate where we legally said, "No, this capital call, it ain't happening." We kind of put it all on halt, and later on I was able to sell it and just exit. But I did exit at a loss unfortunately, but it was an education.
Bobbi Rebell:
Right. What is your lesson for the listeners?
CarrieSheffield:
Absolutely, my lesson is ... Especially, I think for women, I think we get intimidated when we think about money ... is to not be intimidated and to take ownership for your financial future. Don't think that you can't control your financial future because you can. You can teach yourself. Google everything. Don't think that you can't learn the basics of investing and diversification. We, in this internet generation, we are so empowered because we have so many more resources right at our fingertips that our parents couldn't even dream of with the internet.
CarrieSheffield:
Educate yourself. There are so many financial platforms and programs and podcasts like yours that are empowering people to take a step back and say, "I can own my financial future. I will not be intimidated by this process."
Bobbi Rebell:
Carrie, while I have you here, can you give us a money tip? Something that you and your family, your friends, something that you guys do that our listeners can implement immediately?
CarrieSheffield:
Yes, make sure that you know what your long-term goal is, and to make sure that you're creating a plan for that. I think committing to paper is the first step. This might evolve. It will evolve. But committing to paper, I think, is the empowering thing you can do immediately. Writing down your financial goals. Writing down exactly where you see yourself in next year, five years, 10 years. Committing that to paper and creating a plan is the first step to empowerment.
Bobbi Rebell:
Do you tell people it, or do you just write it on your paper yourself and put it kind of in a drawer for you to reference?
CarrieSheffield:
Well, you know, I do have friends who I talk with in terms of thinking about financial advice. I've talked with several financial planners. At this point, because I am an entrepreneur, so much of what's happening financially for me is related to the business, so I think I'm in kind of an interesting netherworld versus if I was in a more typical nine to five role. It's very much evolving, but I would say for me it's been very empowering to put everything down on paper, get your Excel spreadsheets, and just envision where you want to go.
Bobbi Rebell:
Awesome, thank you, Carrie. This has been great.
CarrieSheffield:
Thank you, Bobbi. Thank you for what you're doing. I love that you're educating the next generation.
Bobbi Rebell:
Here is my take on Carrie's story. Financial Grownup tip number one, diversification is always a good thing. The mistake that Carrie made, as she said, it was that she put all of her eggs in one basket. She got a pile of money and she put it all into one thing. No matter how good that thing is, that can be really risky. When things did not go well for Carrie, she was toast. Note, her relatives, by the way who recommended that investment, had other investments. They were diversified, and of course, it wasn't as traumatic for them.
Bobbi Rebell:
Financial Grownup tip number two, consider dollar cost averaging. Carrie got a pile of money. She basically won the lottery. Then she invested it all at once. But sometimes it is okay to be patient. Divide your money into parts, and invest it over time. For example, Carrie could have divided it into 12 parts and invested one part every month for a year. That way, if the investment value went down, you could buy some at a lower price and your average cost basis would in turn reflect the changes and be lower.
Bobbi Rebell:
Financial Grownup tip number three, be aware and be wary of investments that aren't very liquid, meaning they will be hard to get out of. Also, of course, be wary of investments where you may have to pay up just to stay in. In Carrie's case, the investment was losing money, and to avoid it going under and losing all of their money, the investors were being asked to put more money in. That is not a good position to be in.
Bobbi Rebell:
But I do want to say in Carrie's favor, she was proactive in knowing that she should invest the money rather than just sticking it under a mattress or even worse, spending it. It did have a somewhat happy ending in that Carrie did not lose all of her money. Of course, she is flourishing today as the CEO of Bold.
Bobbi Rebell:
That wraps up this episode of Financial Grownup. Thank you for listening. We are loving all the amazing feedback. Please subscribe, share, rate and review. That is how a little podcast like this can get noticed and we can stay in business. It matters and is truly appreciated. With that, I wish you all financial freedom.
Bobbi Rebell:
Financial Grownup with Bobbi Rebell is a BRK Media production.
