Tag Archives: guest post

Sheila Bair | FDIC Chair, Author, Professor

Welcome back to our Blooom Brain Pickers series!  We’re picking the brains of the best in the biz to inform, entertain, and most of all, educate you when it comes to making personal finance decisions. Today we are honored to feature former FDIC Chair, Sheila Bair.

Sheila Bair has had a long and distinguished career in government, academia, and finance.   Twice named by Forbes Magazine as the second most powerful woman in the world, she is perhaps best known as Chair of the Federal Deposit Insurance Corporation (FDIC) from 2006 to 2011, when she steered the agency through the worst financial crisis since the Great Depression.  For her efforts to protect bank depositors and homeowners during the crisis, she received the Kennedy Library’s Profiles in Courage Award, and was named “the little guy’s protector in chief” by Time Magazine. A former finance professor and college president, Ms. Bair has been nationally recognized for her innovative initiatives to make college more accessible and affordable. She is a frequent commentator and op-ed contributor on financial regulation and the student debt crisis, as well as author of the NY Times Best Seller, Bull by the Horns, her 2012 memoir of the financial crisis.

Ms. Bair currently serves on a number of corporate governing boards, including Host Hotels, Bunge Ltd., and Fannie Mae, and on the International Advisory Board to the Santander Group. She also serves on the board of Paxos, a blockchain technology trust company, and as an advisor to several fintech startups.  She is a founding director of the Volcker Alliance, established by Former Federal Reserve Board Chair Paul Volcker to build trust in government and is the founding chair of the Systemic Risk Council, which advocates for financial stability. In addition, she is a Senior Advisor to the Peter G. Peterson Foundation on financial issues confronting young people.

Are there lessons from the Financial Crisis that could help us in our current situation? 

Get the help to Main Street. We didn’t do that with the bailouts of 2008/2009. Government support was highly concentrated on the financial sector. It didn’t trickle down. Even while Wall Street was reaping profits– and paying bonuses– by the end of 2009, it took about 10 years for most working families to recover.  This time around, the Fed is making yeoman’s efforts to reach the real economy but their current monetary tools are just not well equipped to do so. Their programs are still primarily helping big banks and big corporates. On the fiscal side, the small business programs and cash payments to households, including EIP payments are helping. EIP has boosted the consumer spending which underpins our economy. But the process of getting those payments to households has been slow and arduous.  Digital currency technology provides part of the answer. Giving all families a digital wallet where they could receive Fed-backed digital currency would be much faster and much more secure against fraud than our current system. The technology is there and could be in place within the next few years if we have the will to do it.

 

What is the best and/or worst financial advice you have ever received personally? 

Worst Advice: getting a credit card fresh out of college to “build my credit history”. I didn’t have the knowledge or skills to manage credit card debt, and quickly became addicted, eagerly accepting all those credit card offers banks were sending me.
Best Advice:  stick to one credit card.

 

What do you think should be done to improve financial literacy in our country?  

Start at an early age. Embed it in elementary and secondary core curricula like math.  Be serious about it, with quality content written by un-conflicted sources (unlike the industry literature that advised me to get a credit card.)  And don’t use it as an excuse for anti-consumer practices. One thing that really sends me up the wall is to hear industry officials trying to defend irresponsible financial products by saying we just need more financial education. 


You have paved the way for a lot of women in the banking/finance industry, what advice would you give to young women interested in banking/finance? 

It can be a great career choice. Financial services done right can be of huge benefit to families and Main Street businesses. Don’t forget that there are human beings on the other side of those services you are providing.  Treat them right. Research shows women tend to be more compassionate and a bit more risk averse when it comes to finance. We should be proud of those traits and use them to improve banking culture. 


As a children’s book author, what would your advice be to parents when it comes to teaching financial literacy? 

You need to be financially literate before you can help your children. So educate yourself and don’t be afraid to ask questions or “look dumb”. I hate to say it, but I think a lot of the esoteric terminology and complexity in financial services today are meant to intimidate consumers into not asking questions.  One of the reasons I write picture books for kids is in the hope that parents will read them with their children and learn something themselves.


In your time as FDIC Chair, what was the most challenging aspect of your role?  

Trying to get more help for homeowners. We had some success with mortgage relief, but the government should have done so much more.


In your time as FDIC Chair, what was the most rewarding aspect of your role? 

Giving people peace of mind about the safety of their FDIC-insured bank deposits. During the depths of the crisis, the late Bill Keane drew a Family Circus cartoon showing Bill peacefully asleep in his bed, with his piggy bank next to him, on which he had drawn “FDIC”. I had that cartoon framed, and it still hangs prominently in our home. 

Twitter: @SheilaBair2013

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Pam Krueger | CEO of Wealthramp

Welcome to our first installment of… (drumroll please)… Blooom Brain Pickers!  We’re picking the brains of the best in the biz to inform, entertain, and most of all, educate you when it comes to making personal finance decisions. Pam Krueger

Pam Krueger is the creator of the award-winning MoneyTrack investor education television series that ran nationally on over 250 PBS stations.  She is the recipient of two Gracie Awards, educating the public about personal investing, and finding the right financial advice.  In 2017, Pam rolled out a one-hour special, MoneyTrack: Money for Life on PBS stations to explain what the fiduciary standard means to consumers.

Pam launched Wealthramp.com, the largest network of expertly vetted, fee-only fiduciary advisors to help consumers looking for qualified financial advisors who are independent and not commission-driven sales reps. Wealthramp is available to both individuals and employers who offer the service as a financial wellness benefit. Wealthramp uses an eHarmony style algorithm to match individual investors to the best-fit advisors and is available to consumers at no cost.

Pam has served on the board of directors of the California Jump$tart Coalition, an organization dedicated to increasing financial literacy among children and teens. She received the Financial Educator of the Year Award from the Financial Literacy Institute.

 

What is the best and/or worst financial advice you have ever received personally?

Without a doubt, the worst advice I ever got came from a very dear friend many years ago who really wanted me to invest in private mortgages ten minutes before the housing bubble burst. I never did take his advice but he did lose his shirt (or two). I just don’t consider myself wealthy enough to invest in alternative investments. I’m like a granny, I stay in my lane, and I stick to the boring basics. Best advice? Diversification wins all battles because… well… it does.

 

What are your thoughts on the future of financial advice and the direction of the industry in the coming decades?

I see the best possible combination is robo + human. The trick is finding the best available of both the robo-world and the human side. Let’s face it, we are emotional creatures and sometimes we really do need a living, breathing advisor to collaborate or to work through problems. Perhaps not now, but probably later. That’s the beauty of having robust online tools to help you manage on your own. I don’t see the future of advice as robo instead of human advisor, I see it as in addition to human advice. The older we get, the more complex our financial lives become and you may want someone to guide you one-on-one. But here’s the real challenge: human advisors are not created equal so the key is tapping the true talent, not settling for ‘just okay’ advice— especially if you’re about to retire!

The idea of combining technology + financial advisors also contributed to the creation of my company, Wealthramp. A viewer from our TV series, MoneyTrack on PBS. She was frustrated because after the financial crisis she felt she needed an advisor and she’d just fired her broker. She asked me point blank: why do I hate financial advisors? I told her I really don’t hate all of them. I love 5% of them. Given that so few are truly competent and put their clients’ interests first. That’s when the lightbulb went off and I had to ask myself why am I being so negative about the bad advisors when all I have to do is identify the excellent advisors and create a network of them across the country and let people come to me so I can match them to the best-fit advice that’s truly fiduciary. That’s how Wealthramp was born and it took me no less than four years to curate my network of fee-only advisors. I wanted to make sure that when a retiree worried about running out of money needs an experienced retirement income strategy, that person can turn to me. When someone comes to me and has a special needs family member to support, for example, I needed to make sure I’d be able to tap into my network and introduce that consumer to the best advisor possible for special needs planning. Or when a young software engineer at a late stage start up needs to understand his stock compensation and has only 90 days to make a life-changing decision, he knows I have the experts in private stock options and no one is going to sell them anything.

 

What is the one thing you wish more people knew about, given your experience in the industry?

As children we should have been taught the basics about how capitalism works, the economy, credit, practical money skills and an introduction to investing. These are life skills and if we’d gotten that baseline education, I probably would not be in business today. 🙂 All kidding aside, people deserve to feel more confident about their own personal finances, and too many feel embarrassed. That’s just wrong and it creates a lot of financial stress.

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3 Ways to Live the Retired Lifestyle Long Before Your 401K Matures

Being smart about how you build your 401K is always a good idea.

Not only are there the obvious long-term benefits of being financially secure even after you retire, but there are also lots of great short-term benefits of putting away a little extra into this important savings account every year.

But setting yourself up for success after retirement doesn’t always mean you have to give up everything you want right now either.

In fact, millions of people around the world are discovering this liberating truth: you can live the retired lifestyle (at least in-part) long before you ever retire.

Who are these people? They’re entrepreneurs. More specifically, they’re bootstrapping entrepreneurs who realize that work is a side-attraction to their daily life—not the other way around.

I happen to be one of them. I choose my own schedule every day. When my son wants to play catch in the backyard, I stop working early—a decision I have never once regretted.

Every morning, I eat breakfast with my family and then go for a nice long jog before working in the yard, showering, studying some French, and getting ready for the day.

I don’t rush into work at 8:00 am to impress my boss. I start my work day around 10:00 am, I take a long lunch and I’m usually done at 5:00pm or before.

I’ve made friends with all the retired people in my neighborhood because we all share similar schedules.

Because I’m extremely focused during the day, I make way more money being self-employed than I ever made with a salary working for someone else—and the future is extremely bright.

You can have a more intentional lifestyle where your passions, ambitions, and personal growth take center-stage (instead of the 50-slide presentation your boss needs done before you go home today).

Here are a few ways to get started yourself:

 

1. Bring in revenue that doesn’t depend on your day job.

There is nothing more freeing than making money on the side of your day job.

Why? Because it moves the scales of power and decision in your favor—even if just by a little bit.

Imagine if you were making even just an extra thousand dollars every month from a side-business.

You could put away more for retirement. You could take more vacations. You could buy that new motorcycle you’ve had your eye one, yes. All of those are possibilities.

But more importantly, you’ll find you suddenly have leverage—a safety net. Which means you can ask for more at work. Ask for a raise. Ask to work from home 2 days of the week. Ask for that exciting project you really want to tackle. Or ask to go golfing with that new client you just won.

More leverage is the quickest path to changing your lifestyle.

When your boss knows they’re not your sole source of income it changes things. Ultimately, the better you get at building a side-business, the more positive changes will come your way.

2. Start building an asset that will bring passive cash.

In addition to bringing in side-revenue, you should try to build assets that don’t require you to put in a standard workday’s hours in order to collect a paycheck.

In my case, I have spent the last 10+ years learning how to start a blog and make money from it. Today, that asset brings me a substantial amount of income.

For others, building some sort of side-hustle or software-as-a-service business is the best path. Maybe writing a book or creating a course around what you do best could be a nice asset that can work for you as you continue to save for retirement.

Whatever it is, it should (eventually) function without you. Building a business that relies on you in order to run each day is simply just another job.

If you’re worried you’re too far along in life to start building a valuable asset from scratch, remember this adage: the best time to plant a tree was 50 years ago—but the second-best time is today.

3. Set your priorities in order and be willing to sacrifice.

If you truly want to start enjoying a lifestyle that feels a bit more “retired” than your current one does, you’re going to have to adjust your priorities.

Too many people are focused on getting to the next rung on their career ladder, boosting their paycheck by 15%, getting a corner office, or getting their startup acquired.

None of those things lead to living a more free lifestyle—at least not before you’re 65.

That’s not to say you can’t make loads of money along the way (plenty of people manage to make lots of money and still maintain a beautifully flexible lifestyle).

But if your entire focus is to work hard until your 65 when you’ll finally start living, then that’s probably what you’re going to do.

Instead, do well at your day job, but do your best (I know it’s not always easy) to leave work at the office and focus on your side-business, family, and life outside of normal work hours.

Instead of having to have the biggest house and the newest car, find joy in free time, travel, loved ones, hobbies, and other fulfilling activities.

There’s so much more to life than work.

Does this mean you might miss out on a promotion? Yes. I know I most certainly have.

But it also means you’ll be one step closer to the lifestyle you want to enjoy—and if you do it right, you’ll get there long before you’re 65 and your 401K finally matures.

 

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Preston Lee is the founder of Millo where he and his team help people start freelancing or growing their small business with a focus on a much happier lifestyle. If you’re ready to start exploring how life can take center stage for you, start here.

 

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