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Living with Money Podcast

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Recently, I had the pleasure of speaking with Tim Mullooly, the host of the Living with Money podcast.

There are plenty of times when I feel like I’m railing against the system, and that the industry is in need of a fire-hose spray down, but when I speak with fellow advisors who are doing right by investors it lifts me in ways I can’t adequately describe.

Such is the case with Tim.

He and his family have their own fee-only registered advisory firm, Mullooly Asset Management.  They built their practice as a family, which certainly puts the personal in personal finance.  They take the time to educate investors through blogs and podcasts.  They are thought-provoking, compassionate and I am inspired by them.

In this podcast, we covered many topics that affect millions of investors – like investor protections (or lack thereof), the importance of working with professionals who want to look out for investors’ well-being and the landmine that is the 403(b) retirement plan for America’s public school teachers.

In the interview, I referenced a blog post I wrote a long time ago: The Devil is in the Detail.

Every bit of this is as relevant today – maybe more so as regulators are blurring the lines between those who act as a fiduciary and those who only want to pose as such.

I hope you’ll give the podcast episode a listen and pass it along to someone who can use some plain-English explanations of personal finance issues.

I also hope you’ll explore Tim’s other podcasts as well as his top blog post links.   Share them with others.  It’s a small step, but maybe it will counterbalance the very conflicted messages that brokerage firms spend billions of advertising dollars on to give investors a false sense of security.

We have to start somewhere and I am happy to have the company of people like Tim and the Mullooly’s who are committed to providing investors with unconflicted information, for the simple fact that it is the right thing to do.

 

 

We Are ALL Teachers

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Weeks ago, I found myself writing testimony I would deliver before the House Financial Services Subcommittee on Investor Protection, Entrepreneurship and Capital Markets.  The topic was examining the SEC’s Best Interest Rule to see if this “replacement” for the fiduciary rule could ensure that investors’ needs would be put first by financial professionals.

Sorry to say, I felt like Dorothy in the Wizard of Oz after the curtain was pulled back – horrified at the bullying and cowardice on display.

Congress had no shortage of spin masters that day.  It disgusted me to watch as these conflicted politicians defended Regulation Best Interest even though it allows financial professionals to partake in sales quotas, contests, and sell higher costing product because it pays higher commissions (which is never in a client’s best interest). 

I walked away angry over the fact that those in a position of authority are tainted in the worst of ways and it enables them to politicize the issues and use ignorance and fear to keep the American public fleeced into thinking that lawmakers are looking out for them.

Now, in fairness, there were two bright spots that stood out – Rep. Katie Porter (CA) and Rep. Carolyn Maloney (NY) clearly were looking to strengthen investor protections.  So, if you happen to be lucky enough to have one of these fierce ladies representing you – congratulations!  They gave me a tiny glimmer of hope that not all politicians are looking to their next high-paying gig.

In the days and weeks following my testimony – I did a slow burn that kept intensifying and no amount of ranting seemed to get it out of me.  It percolated in me like a toxic sludge.

My poor husband who had endured the weeks of neurosis leading up to my testimony now had to deal with the aftermath, too.  Sometimes, life just isn’t fair.

Coincidentally, we had a number of financial literacy classes scheduled with high school students over the course of the next month.  It was there I found some peace.

If I couldn’t beat the bastards – I would work to educate others so they could not be taken advantage of.  Armed with the most passionate teacher I know (Tony), we set out and that seemed to be a therapy of sorts.

It reminded me of how, years earlier (before the fiduciary rule was even on the table) he and I would give Investor Self Defense presentations.  Over time, we had built up our clients and had less time to devote to these programs – but we had always enjoyed informing others.  It is truly at the heart of who we always have been.  Nothing has changed.

Today, our emphasis may be on the lack of protections afforded to teachers’ retirement plans – but as long as there is no fiduciary rule governing IRA accounts, college savings plans, and regular brokerage accounts – we are all teachers.  We are all vulnerable to fall prey to a convincing sales pitch.  We can all fall prey to conflicted salespeople purporting to be trusted advisors.  We can all be duped into thinking the sales guy is really working for us, when he is working for a firm who has made campaign contributions to sway politicians into weakening investor protections for their own benefit.

It’s even easier for us to become prey when the gatekeepers in Congress would rather prop up an outdated, inefficient and expensive business model than insist that they do better for investors.

It’s only a matter of time before the public catches on and finds fiduciaries to work with – or low-cost mutual fund companies, like Vanguard which allow investors to do an end-run around expensive product and unhelpful advice.  Firms like Betterment are also offering low-cost automated investment options. 

The financial services industry should support raising the bar on protections; higher standards give investors confidence and faith in our economic system.  That is an important ingredient for economic growth and robust markets. 

The brokerage and insurance industries best enjoy their gluttonous feast now because the purge will be violent.  And make no mistake – that day will come. 

Millennials are breaking with tradition and the old mold will be cracked open.  They don’t care who their parents used for investments.  In fact, they’re pretty mistrustful of the established way of doing things.  Good for them!

Our representatives in Congress should look to raise their standards above their own personal gains and interest.  Greater faith in the government is never a bad thing.  Apparently, members of Congress didn’t get the memo that Americans find them to be the most mistrusted group. 

Sadly, I have to agree.

Unfortunately not everyone realizes that it is open season on investors; we live in a buyer beware environment.   For those who are informed, the onus is on us make others aware so they can look out for themselves.

I had the pleasure of speaking with Barry Ritholtz about this experience and he asked me if testifying had been a waste of my time.  While it certainly felt fruitless, I did walk away feeling the need to scream from the rooftops: Watch out because the regulators aren’t watching out for you. 

Consider this my rooftop.  Now do a good turn and let someone less informed know.

Your Creative Solution

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I had the pleasure of interviewing Gabriela Pereira for On Her Mind podcast.  While her business focuses on writers, her message is universal: Our mindset can greatly limit our creative spirit.

I first encountered Gabriela when her book, DIY MFA (Do-it-yourself Master’s in Fine Arts) was released.  As one who loves to read and write fiction, her ability to boil down the critical components of this coveted degree intrigued me.

When would I find the time to pursue this degree? Probably never; but now I no longer had to wonder what I was missing, nor did the many others who bought her book.

Her desire to reach those writers that would be shut out from formal MFA programs due to geography, financial and/or time constraints, or genre (these programs can have a narrow focus) didn’t end with her book.

From there, this dynamo rolled out an interactive program to go through the lessons in the book in greater detail and with the support of others.  Then she unveiled a course to help writers build an audience and find a community for inspiration.

She accomplished this and managed to keep things fresh and exciting – while raising young children and managing bipolar disorder.  The challenges and constraints of life, she maintains, serve as fuel for the creative process.

Along the way, she has helped others tap their creative side – and not just through the traditional channels (art, music, writing and performance) but in everyday problem-solving – from getting co-workers to cooperate to having a child do homework.

Her TedX presentation, Creativity is a Craft and It Belongs to Everyone, pushes limits of how we think of our own creativity.  She also acknowledges that creativity can be fragile and is easily stomped out of a person.

In the world of personal finance, I see parallels.  There are people who need guidance, who would otherwise be ignored and who need this knowledge.  They are convinced that they’re just “not good at this,” so they check out and stop paying attention, barely save and cease looking for creative solutions to make life what it could be.  These are the people I hope to reach.

Her insight into how to fire up the synapses in our brain to be our most interesting, fulfilled creative selves is inspiring.  Gabriela challenges us to get unstuck, plug into our creative nature and express ourselves as only we can.

The solutions lie within.

Relentless Optimism

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Like most people, I have a real soft spot for the underdog.

Yanely Espinal has a unique story to tell, but the theme of trying to make a better life is at the core, and that story never grows old for me.

Her parents immigrated to the U.S. from the Dominican Republic and had little formal education.  As one of nine children growing up in a three-bedroom apartment in Bushwick, Brooklyn she hadn’t thought about money as abundant – and when she arrived on the campus of Brown University, her preconceived notions about money and affluence were tested.

Still, there was this undercurrent of shame and a feeling of scarcity that led her into spending more than she could afford.  One day, rather than simply pay her credit card minimum (as she had been doing), she decided to really look at what she was paying.  Though she had stopped using the card and continued paying her minimum due, she owed a lot more than she had the previous month.  What was going on?

It was then she discovered the perils of paying interest as it compounds (which is far less rewarding than earning compound interest).  She also found out what rate she was paying and made it a personal mission to get out of debt. About a year-and-a-half later she accomplished her goal and decided that the $1,000 a month she put towards her debt could now be put to a better goal – building wealth for herself.

Most important, she shared her journey for others to learn from as the aptly titled Miss Be Helpful.  With over 28,000 YouTube subscribers I would say there are plenty who crave her content and who can relate to her struggle.

I had the absolute pleasure of speaking with her for On Her Mind podcast – and like I said – her underdog tale struck a chord deep within me.

Perhaps my reasons go back to my family – my four grandparents who all came to this country from the same impoverished Sicilian town in the early 1900s; my grandmothers who sewed for sweatshop wages; my father who couldn’t afford an education so he joined the military as the threat of World War II loomed on the horizon – they all struggled in ways I have never had to.

Their experiences have also given me a relentless optimism; much is possible and their successes are proof.  My grandfather (who could barely read and write) founded a food import business that survived the devastation of the Great Depression; the proceeds from its sale and his investments would support my grandmother for the 59 years she spent widowed.  My father, a high-school dropout who earned his equivalency in his forties, would go on to head up the Cytology laboratory in a hospital and make a better life for his wife and seven children.

Yanely’s desire to help others face their challenges doesn’t end with her YouTube channel.  As Director of Educational Outreach, she is teaching a new generation of teens and educators about money through the non-profit NextGen Personal Finance (which offers free personal finance programs and training).  This knowledge could greatly alter a child’s future (and all the lives that child touches).

How others face their struggles, overcome their mistakes and ultimately find their way is a story that I never tire of hearing.  What unites us is when we can relate to someone’s experiences.  When we share these experiences and learn from one another, we find our own way.

At just 29 years old, she has much wisdom to share for those who feel baffled or overwhelmed by money.  And for all those underdogs out there — you won’t find a more enthusiastic cheerleader.

 

Attention Long Island Teachers:  NextGen Personal Finance is offering free FinCamp training on Monday, January 28, 2019, at The Old Field Club in Setauket.  To register, go to http://bit.ly/FinCampLongIsland.