Transcription
Jane King:
I wish I would have just trust my instinct at the time because I feel like I knew, gut, what was going on with the housing market. I don't think I understood just how deep the problems were.
Bobbi Rebell:
You're listening to Financial Grownup. With me, certified financial planner, Bobbi Rebell, author of How to be A Financial Grownup. 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 everyone! Today's episode features a friend I've known for more than a decade and learned a lot from and I know that you will as well. Jane King is a familiar face to so many of you because she's been anchoring local news business updates for years. First, on CNN, then on Bloomberg, and now with her entrepreneurial venture, LilaMax Media. Named after her two kids, Lila and Max.
Bobbi Rebell:
Even though her official money story has to do with a real estate flop, pay close attention to the extra story she casually slips in about launching her content syndication company, LilaMax. Previously referred to, which continues to grow at a time when so many bigger content companies are struggling. She makes it seems like no big deal, but I was there, and this Mompreneur is holing her own against some heavy competition. Here is Jane King.
Bobbi Rebell:
Hey Jane King! You're a Financial Grownup. Welcome to the podcast.
Jane King:
Great to be here, Bobbi, and I really loved hearing your podcast over the weekend. It's great advice out there.
Bobbi Rebell:
Oh, thank you, and I love your podcast, “KaChing With Jane King” and all of your entrepreneurial ventures. Tell us a little bit about that.
Jane King:
Well, right now I run a company called LilaMax Media. I'll just give you a little history of how this came to be. So, I worked for CNN. I worked for Bloomberg and then the division that I worked for at Bloomberg, in 2013, they decided to shut that down at the end of the year. So, they gave us about a six weeks notice and another guy on my time and I decided just to take it on. We started this company LilaMax Media.
Jane King:
We do broadcast of the NASDAQ Monday through Friday for local TV stations around the country and try to keep up everybody on this very interesting business news atmosphere that we have lately. Oh, my goodness!
Bobbi Rebell:
And, many of my listeners, I'm sure see you on their local morning news, so we love that.
Jane King:
Right. And, I have some great fill ins, like you!
Bobbi Rebell:
I do.
Jane King:
Good help.
Bobbi Rebell:
I do help you out. I love doing it. But, let's talk about your money story, because it has to do with something near and dear to my heart, because I have had a lot of financial security come my way because of real estate investments. You made a big real estate purchase. We were actually all pregnant together, us and a bunch of friends.
Jane King:
Yes.
Bobbi Rebell:
We had our babies all at the same time back in 2007 and we all bought real estate at that time. But, your story is a little bit different from the standard run of the mill story. Tell us what happened.
Jane King:
Well, I got caught up in that whole disaster of what we lived in 2008 and 2009. So, I was working as a financial reporter at the time and I just had this feeling that the housing market was over valued. I, you know, I had even had discussions with people. I'm like, come on, the average house is $250,000. But, the average American is only making like 45 and nothing just added up. So, I just ...
Bobbi Rebell:
Right, so logically, you went to buy a house. A home.
Jane King:
Well, so here's how this all came about. So, we had a friend who was moving and he said “Hey, how would you like to buy our apartment?” And, I was like “Oh, I really don't want to do that.” He was like “Oh, we don't have to pay commissions.” I was pregnant at the time as you mentioned. I thought “Well, gosh, it wouldn't be good for the child to have a house instead of a rental, for some reason. Even though, it kind of makes no sense.” Our accountant weighed in. Said the tax write offs were great so, we bought a home. Let's see. We closed on that in March or May of 2007, and ...
Bobbi Rebell:
So, right before Max was born?
Jane King:
Right before Max was born and at almost the exact peak of the housing market. When we closed on the home, I think they were around, just under seven percent. Like, six and a half or six point seven.
Bobbi Rebell:
Which, sounds really high right now.
Jane King:
Sounds high right now, but this was 2007. They went all the way down to three something and we just could not take advantage of that because the home values just ... the value of the appraisals were coming in too low. So ...
Bobbi Rebell:
So, your equity was not high enough to refinance?
Jane King:
That's right. So, third times a charm. Finally got that done, and of course we paid all the fees and everything in the process. But ...
Bobbi Rebell:
So, so much for saving so much on the commission.
Jane King:
So much for saving on the commission. You know, I don't know. You know, it was a co-op. We had trouble selling it because the co-op board was just ... that's another thing. I would never buy in a co-op again.
Bobbi Rebell:
Wait, let's go back to the story. So, okay, you get into the apartment. First of all, you wanted to refinance just because the rates were going lower, right?
Jane King:
Oh yeah.
Bobbi Rebell:
Okay.
Jane King:
We did, but it was, you know, a couple thousand dollars a month difference.
Bobbi Rebell:
Oh wow. So, your payments were high, number one. So, number two, then you're being rejected from refinancing because your equity relative to the value of the home was not a good enough ratio.
Jane King:
That's right.
Bobbi Rebell:
And then, number three, why did you want to sell? Why not, once you were able to refinance, why not just hang there?
Jane King:
Well, because it's a co-op and you can't rent it out for more than two years, so another one of those co-op rules that you have to deal with in New York City. So, we could only rent it out for two years and then we had to finally sell it. Because, we had moved to a different neighborhood and we weren't really ...
Bobbi Rebell:
Okay, so why did you move then, I guess is the question. Because, you bought it in 2007, why not just live there?
Jane King:
Two things. So, one was the apartment was up by Columbia University and they were taking over the building where my husband had a business. So, we needed to find a new location for the business, and the timing of that was right at the time when my son was entering Kindergarten and the schools in that area, of course, I was pregnant at the time. I didn't even think about to ask about the schools, but the schools in that area were not good schools. So, we moved to a better district where the schools were better. My husband set up a business and, you know in the end, everything's better. But, it's just I don't know. I wish I would have just trust my instinct at the time because I feel like I knew, gut, what was going on with the housing market. I don't think I understood just how deep the problems were, but you just got to trust your gut. We know more than we think we do.
Bobbi Rebell:
So what is the lesson for our listeners from your story?
Jane King:
Well, I would think that if you're somewhat informed about finances, trust your gut. Don't let somebody else talk you into something. Whether, it's buying an apartment or buying a stock or buying something else, you know, whatever. I would just trust your gut and really think about it, because I do think we know more instinctively than we think we do.
Bobbi Rebell:
Alright, let's talk about your every day money tip. Because, this is very basic and yet, sort of brilliant because it probably works. I mean, if it does work for you, I think it would work for a lot of our listeners.
Jane King:
Well, it's so easy. Anybody can do this. I pay all my bills on Saturday morning. It helps me keep all of my accounts in check. I know what the balances are. Nothing is ever paid late. So, I don't have any of the late fees or anything like that. I just set them down. It's part of my morning. My Saturday morning routine along with doing the laundry and doing the dishes, its I sit down and pay the bills. And, it's so easy and I think it's a great tip and anybody can do it. You can start this Saturday!
Bobbi Rebell:
Yes! Or, it can be any day of the week. The point is that you have an appointment with yourself to focus on your finances.
Jane King:
That's right. Saturday morning works well for me. Whatever day happens to work with you is good. It's just I'm a creature of routine and I find that it helps me lead a more organized life.
Bobbi Rebell:
Excellent. Alright, tell us more about what's going on with your podcast KaChing.
Jane King:
Okay. KaChing with Jane King. It's all about kids and money. It really kind of comes from the financial crisis, because I felt like people were doing irresponsible things because they didn't know. They didn't know that housing doesn't go up forever or that you can't spend more than you earn. You know, things like this, so I really decry the lack of financial education in our schools and in our society. So, I started this little podcast and we have some great guests on there. Authors, and people who come and they talk about, you know, just helping to raise kids so they're financially responsible. KaChing with Jane King.
Bobbi Rebell:
Alright everyone. Check it out. Thank you so much Jane, you're the best!
Jane King:
Thank you Bobbi! Great to see you!
Bobbi Rebell:
Hey friends, there's a lot to take from Jane's story. The first thing though, that strikes me is this.
Bobbi Rebell:
Financial Grownup tip number one: If you make a real estate mistake. Admit it and get out. Jane did that right. Holding on to something you bought. Just because you bought it, is not going to fix the problem. And yes, you could lose money, but holding on, you could lose even more money. You don't know. So, staying put is just going to add to the pain. When we drill down the key problem with the apartment, was that the schools weren't a fit for Jane's kids. The other issue was that her husband's business was losing its lease. So, by paying the price, and it was expensive, it was painful for her. But, admitting the mistake, her family was able to move to one of, if not, the best public school districts in the entire city. Her husband set up a new business, in a hot neighborhood, with great clientele, and they moved on and they prospered. Digging in their heels and hoping things would just get better would have been a mistake.
Bobbi Rebell:
Financial Grownup tip number two: Let's talk about Jane's business, LilaMax Media, which produces content primarily from the NASDAQ market site. So, this is the bonus story that I mentioned at the top. Her previous employer, Bloomberg, was shutting down that line of business. She and her partner, Bob Morris, figured out a way to make the economics work with lower overhead as a smaller company. So, instead of being out of work, Jane actually became the co-founder of a business that is going strong more than four years later.
Bobbi Rebell:
She took a terrible situation and made it into an opportunity of a lifetime and yes, you can see me filling in for Jane, so DM me and say “hi” if you see me on your local news in the early hours of the morning. If you have not already hit that subscribe button, so you don't miss any upcoming episodes and be in touch. On Twitter, I am @BobbiRebell. On Instagram @BobbiRebell1. On Facebook @BobbiRebell and as I said, DM me. I love hearing your feedback on the podcast.
Bobbi Rebell:
Jane had to make some very Grownup decisions as a consequence of that against the gut real estate decision, but she did it. And, it's a great lesson. Trust your gut, and if you find yourself having made the wrong decision, get the heck out. So, thanks Jane for helping us get one step closer to being Financial Grownups.
Announcer:
Financial Grownup with Bobbi Rebell is edited and produced by Steve Stewart and is a BRK Media Production.
