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0:23

the conclusion of this episode. Hi,

0:27

and welcome to The Long View. I'm Christine

0:30

Benz, Director of Personal Finance and Retirement Planning

0:32

for Morningstar. And I'm

0:34

Amy Arnott, Portfolio Strategist for

0:36

Morningstar Research Services. Our

0:39

guest on the podcast today is Ann Lester.

0:41

She's author of a new book called, Your

0:43

Best Financial Life, Save Smart Now for the

0:46

Future You Want. Before writing

0:48

the book, Ann spent 20 years as head

0:50

of retirement solutions for J.P. Morgan. With

0:53

AARP, she co-founded the Aspen

0:55

Leadership Forum on Retirement Savings.

0:58

In 2020, Ann was recognized

1:00

for her extraordinary lifetime contributions

1:02

to Americans' economic security with

1:04

the Ray Lillywhite Award. She

1:07

earned a Master's in International Economics

1:09

and Japan Studies from Johns Hopkins

1:11

University and a BA from Princeton.

1:14

She was also awarded a Fulbright

1:16

Graduate Research Fellowship. Ann, welcome

1:18

to The Long View. Well, thank you so

1:20

much for having me. Well, we're excited

1:22

to have you here, and congratulations on the

1:25

book, Your Best Financial Life. Maybe

1:27

you can talk about your motivation for

1:29

writing the book. Thanks

1:32

so much. I think there

1:34

were a couple of different things motivating me. I

1:36

guess for starters, I've always wanted to write a

1:38

book and in fact have an unpublished novel I

1:40

wrote in my 20s and 30s in the bottom

1:43

of a desk drawer somewhere. So it's been a

1:45

lifelong ambition. I guess I listened

1:48

to the Write What You Know advice. So I

1:50

certainly know this topic pretty well. And

1:52

I know it from several

1:54

different perspectives. Everyone obviously as

1:56

a investment professional who's spent,

1:59

you know, Twenty plus years. Focusing.

2:02

On how to build. Investment.

2:04

Projects for people to

2:06

save for retirement but.

2:08

Also, from a very personal perspective,

2:11

I've found a lot of. What?

2:13

I was learning a business a really do into

2:15

the defeated contributes and system. Very personal because

2:17

I was a textbook example of all

2:20

of the mistakes people make when they're

2:22

trying to save themselves. Maybe not

2:24

so much on the investing side that certainly on

2:26

the saving side sell. I. Think. I'm

2:28

writing this book for maybe for my younger

2:30

self but also very much for my children

2:33

and for frankly everybody I talk to along

2:35

the. Way working. On his

2:37

poker really is. Struggling. Often

2:39

to overcome not just the realities

2:42

of saving which are challenging, but.

2:45

Also. Their own set of personal

2:47

feelings of may shame and fear

2:49

and you. Know the little voice

2:51

in their head says you should

2:53

do a better job at this.

2:55

So that's why we're so I

2:57

think you are silly. Answered our

3:00

next question which is why did

3:02

you focus your book on a

3:04

younger audience mainly millennials and then

3:06

see versus people who are getting

3:08

ready. To retire or are

3:10

already retired For example, Here.

3:13

And again their multiple reasons, but

3:15

a big one is. And

3:17

I don't mean to discourage anybody who's older,

3:19

but if you're in your fifties or sixties

3:21

and have not started saving, it isn't really

3:23

different conversation. and then it is with a

3:25

thirty year old who has. And started saving

3:28

it in so. Part. Of it

3:30

is just it is. And want to

3:32

see easy cause none of this is easy. But. It's

3:34

a less challenging, maybe less sacrificial

3:36

conversation when you're younger, because you

3:38

do have time and time is

3:40

your friend when you're in your

3:42

twenties and thirties, when you can

3:44

your fifties and sixties when. Is

3:46

from in investing perspective certainly much

3:48

less of a friend and so

3:50

I think that's one of the

3:52

reasons the other reason is again

3:55

with children this age I hear

3:57

and see so much. An

3:59

unknown. I always am or

4:01

fear or will. Never be able

4:03

to do it and I just don't think that's

4:06

true. So another one was really try to dispel

4:08

that fear. It

4:10

seems like a lot of people have tried to

4:12

crack this nut with books and web. Sites. You

4:15

know, trying to help younger

4:17

people with their financial. Wellness and

4:19

I'm wondering if you can? Can I

4:21

think about what you view is sort

4:23

of your secret sauce Or like, what

4:25

are you trying to do differently than

4:27

other entities that have tried to address

4:30

the same audience in the same general

4:32

topic. Will clearly we're not

4:34

getting it right because I don't think the savings

4:36

rates either. The proof is in the pudding and

4:38

it's is not a letter Great and as you

4:40

say they are many many many books out there.

4:42

Like this, I think I'm trying to

4:45

do two things that are maybe a

4:47

little different. The first. His. Approach

4:49

it. Is. Basically integrating.

4:52

The behavioral, the Why.

4:55

With. The How and I think there are lots of

4:58

books on the why and a lot of books. It's

5:00

gonna take a deep dive into. The behavioral

5:02

Economics and that sort of

5:04

importance of finance. I don't

5:06

know that many books has

5:08

successfully integrated the why of

5:10

the wiring and is how

5:12

you do it is explicitly

5:14

as has done so. that's

5:16

one big differentiator. The second,

5:18

think differentiator is a seems

5:20

and. I. Am one of them

5:22

might financial services professionals. Ten Two. Cats

5:25

and Concert in. You know, I

5:27

think we assume that this stuff

5:29

is interesting and I think most

5:32

people don't find it the least

5:34

little bit interesting. they just want

5:36

it all the go away. And

5:38

I think see can without intending

5:40

to sound condescending. And so I

5:43

really tried very hard to sound.

5:46

Approachable. Really. Double suman not to

5:48

use jargon, but also and I think

5:50

there are plenty of the some great

5:52

books that have come up very recently

5:55

aimed at this demographic written by people.

5:57

This. Age I think those books or a

5:59

he. I've done it all right and I

6:01

can teach you to do it too. I'm

6:04

taking kind of a different approach, which was, wow,

6:06

I made every mistake you made, and I've learned

6:08

a lot. And let me share that with you

6:10

from the perspective of someone who's made the mistakes

6:12

and learned, but also from the perspective of someone

6:14

who spent 30 years as a

6:17

professional investor. And so I

6:19

think that's a bit differentiated as well. So

6:22

what are some of the key areas where

6:24

you depart from kind of

6:26

a conventional wisdom about how

6:29

this group of younger investors should

6:31

be managing their finances? I

6:34

think at a high level, I am

6:37

trying very hard to make

6:40

sure that people don't feel,

6:43

I don't want to say don't feel responsibility

6:45

because clearly we're responsible for what we do,

6:47

but don't feel like it's their fault. So

6:49

one of my chapters has called you second

6:51

savings and it's not your fault. And

6:54

I actually mean that. Like surely

6:56

you're the one spending the money. So you are actually

6:58

spending the money and you can't, we

7:00

can't pretend that you're not doing it. But at

7:02

the same time, I think unlocking

7:05

the appreciation

7:07

and the understanding of the

7:09

why, right? Why are you spending like this?

7:12

What is causing you to spend like

7:14

this? And I think there is an argument to be

7:16

made that, and I know there's sort of a new

7:18

field of financial therapists

7:20

that I think are very helpful in

7:22

this context, but you know, well,

7:24

I think everybody should spend years plumbing the depths

7:27

of the wise on a very sort of personal

7:29

and human level. I think there are also some great

7:31

shortcuts you can take that let you hack your way

7:33

around some of the triggers that

7:36

may cause overspending or make it difficult

7:38

to start investing. And

7:40

you can do that first and then you can take the

7:42

time to really go deep on the why for

7:44

your own personal sort of sense of knowledge

7:46

and control. But I think sort

7:49

of accepting that you may be

7:51

wired a certain way is certainly one

7:53

way to get out of this frozen

7:55

shame, blame place that I think a lot of

7:57

people are in. I heard so many. many

8:00

people say to me, I just don't

8:02

know what to do. I'm afraid of doing

8:04

it wrong. This is really confusing. It'll never

8:06

work for me. Right. And those are all sort

8:08

of stories that loop through

8:11

people's heads that stop them

8:13

from taking action. We

8:15

want to delve into some of the things that you

8:17

just referenced, Anne, but first you have

8:20

two sons who are in the same age cohort

8:22

as your intended audience. I'm wondering, did they influence

8:24

how you approach the subject matter in the book

8:26

and perhaps why you wanted to write a book

8:29

geared toward this audience in the first

8:31

place? Oh, very much so. I mean,

8:33

they, I think I say it in the acknowledgments

8:35

or at the back of the book that I was very

8:37

grateful for them being my focus group of two to begin

8:40

with. And I

8:42

think what I really learned from

8:44

them is, and you know,

8:46

you read about it in the media,

8:48

but certainly talking to them, I consider

8:50

them reasonably media

8:53

sophisticated kind of engaged people.

8:55

And there is a level of

8:57

cynicism and skepticism about the

9:00

system and, you know, what

9:03

to expect from, you know, the grownups that

9:05

is radically different. I mean, maybe

9:07

people felt like that, you know, in the sixties

9:09

when they were that age, I'm a generation almost

9:11

younger than that. So I didn't feel that, but

9:14

plus the skepticism and, you

9:17

know, it'll never work for me is so

9:19

pervasive. And I think some of that is

9:22

obviously the environment we're in and two

9:24

pretty large systemic failures, you

9:27

know, most importantly, the great financial

9:29

crisis. But also I think, you

9:32

know, when you're young, compound

9:34

returns don't make sense. Like you

9:36

don't get a visceral understanding for

9:38

how that works. And I do think that

9:40

some of the sort of young

9:44

inability to trust that

9:46

it will work, right, which we've damaged in

9:48

all kinds of ways with systemic failures from

9:50

leadership. And I think that's, you know, A

9:52

challenge for all of us in this society, right, is

9:54

to stay much lower level of trust in institutions, but

9:56

specifically for the younger people, when you put money on

9:58

top of it, I think. It's so

10:00

difficult for your brain to understand

10:03

the power of compound interest and

10:05

monsieur a mask a great like

10:08

that. Nasa really really really works.

10:10

It's very powerful, but you need

10:12

to let your money. Row

10:15

for ten or twenty years, Before

10:17

you really see how powerful it

10:19

is and that I think. Is.

10:21

An insight that I really hope people take from

10:24

my book, right that the single most important thing

10:26

that somebody in their twenties or thirties has his

10:28

time in, It is truly magic for what it

10:30

will do for your future, but it's hard to

10:32

take on faith and you have no personal experience

10:34

in it until you're out in a twenty years

10:37

later, right? And then you can look back and

10:39

go Wow, That worked. Or oh, I wish I

10:41

had. Made. I want them not to say

10:43

I wish I had. A So

10:45

it is a sense you talking to

10:47

your own sons. You also conducted some

10:50

focus groups of younger adults to help

10:52

prepare for the but what was the

10:54

purpose of those focus groups and what

10:57

sensitive topic since you cover with them.

10:59

Well. I did with the help

11:01

of. A company. A.

11:04

Bunch of surveys. Were

11:06

I really manages? To get

11:09

a sense for. How people.

11:12

Be were doing saving for retirement and

11:14

how they actually were doing saving for

11:16

retirement. So we sent this out and

11:18

the summer of Twenty Twenty One and.

11:20

Got a lot as. Beta.

11:22

About savings rates and attitudes and stuff and

11:25

when we looked at it it it was

11:27

very clear that people really seen into for

11:29

Buckets. Again, aligned on this how

11:31

are you doing versus how do

11:33

you think you're doing and. It

11:36

was fascinating looking at in the everybody

11:38

I surveyed was between the ages of

11:40

twenty one and forty five, all income

11:42

levels, all education levels, and. The.

11:45

Group said. Was doing

11:47

well and new. it really

11:49

suit very. Heavily mail and also skewed

11:51

very heavily. And I really do have

11:53

into this in the focus groups I

11:55

call them the Kryptonite sites. They were

11:57

really into money. they were teaching out

11:59

on. data. They were on all the

12:01

social media and internet kind of sites and

12:03

giving each other tips. And this is again,

12:06

I called them kryptonauts because that's what was

12:08

going on back then. But

12:10

they were giving each other tips on day trading.

12:12

And like, we're kind of geeking

12:14

out on this stuff. And many

12:17

of them and the only woman in the

12:19

focus group who we could recruit,

12:21

because again, we were trying to match the demographics

12:23

of the 1000 people when we recruited

12:25

the focus group. So we got

12:27

similar age, similar income distribution and

12:30

similar sort of gender

12:32

mixes. And the only woman

12:35

had been taught how to do this by her

12:37

grandfather, but everybody in that group had a mentor,

12:39

a financial mentor who taught them how to do

12:41

it. And then the other three

12:43

groups were also fascinating. About 50%

12:45

of the people were not

12:48

doing well and knew it. And then

12:50

the other sort of, I guess, about 35% of the

12:52

people were almost evenly split between

12:54

the other two groups. The ones

12:56

who were doing just fine based on

12:58

their self-reported savings and investments, but thought

13:01

they weren't. So they were

13:03

sort of the worried well, skewed

13:05

very female, didn't have a

13:07

lot of mentorship, didn't have a lot of

13:09

understanding, but were just really good savers. And

13:12

then to me, the most interesting group, sort

13:14

of from my former hat is running target

13:16

date funds, was the group that thought

13:19

they were doing just fine and were not at

13:21

all based on their self-reported savings,

13:23

right? Were saving way too little. And I

13:25

knew this before I left Shaping

13:27

Morgan, but the single scariest thing I heard

13:29

them say was, well, we

13:31

know we're doing fine because our company enrolled

13:33

us in the 401k. And then when we

13:36

probed and said, well, how much are you saving? How do

13:38

you know it's enough? They said, well, I don't know how

13:40

much I'm saving, but the company did it so I know

13:42

it's right. That was answer number one. Terrifying,

13:45

right? If you're an autoenroller and you

13:47

haven't been autoescalating, that is terrifying. And

13:50

then the second answer that also I found troubling,

13:52

especially in this sort of internet age is, well,

13:55

I know I'm doing everything right because I'm doing

13:57

what everybody else around me is doing. And

14:00

both of those really give

14:02

me pause because if

14:05

you're gauging success on everybody else, right, and

14:07

again, I see this now on social media,

14:09

right, there's a lot of really

14:11

good stuff on social media about finances, but you

14:14

know what? There's a lot of kind of not

14:16

so good stuff out there. And if you're

14:18

not very sophisticated about this stuff, it's pretty hard

14:20

to tell it apart sometimes. So that is troubling.

14:22

And clearly the ones either they were listening to

14:25

people who were equally ill-informed or they were listening

14:27

to people who were giving them actively bad advice. And

14:29

I couldn't tell in the focus groups which one it

14:32

was, but it was troublesome. So

14:34

in the book, you talk about how people

14:37

in their 20s and 30s today are actually

14:39

pretty good savers based on the data, despite

14:41

the widespread perception that they're spenders on you

14:43

know, avocado toast and whatever else. Can you

14:46

talk about that? Yeah,

14:48

and I think I haven't seen the data

14:50

on that. But my suspicion is

14:52

that's almost entirely due to auto enrollment. And

14:54

certainly a lot of the data around this is for

14:56

retirement, right. And, you know, if

14:59

you compare them to the boomers, the

15:01

boomers didn't even have 401k plans when they were

15:03

entering the workforce, right. And they certainly weren't

15:05

getting auto enrolled. I think

15:08

for younger workers who start in a

15:10

company that offers a 401k, I'd say

15:12

most of them are now getting auto

15:14

enrolled. Many of them

15:17

are now getting auto escalated. And, you know,

15:19

certainly when I talk to people in this

15:21

age bracket, what I hear is, I'm

15:23

really worried. I'm not doing it right. I'm not

15:25

doing enough. And I say, well, are you in

15:28

your 401k plan? Yes. Do

15:30

you know how much? I'm not sure.

15:32

I think 10%. I

15:35

need to check and I'm like, you know, you're

15:37

doing you're doing okay, like, there's

15:40

some things we can check, there's some things we can do.

15:42

But if you're in and started in your 25 or

15:44

30, even you're, you're on the

15:46

right path. And so some

15:48

of that anxiety and fear is because they're

15:50

hearing it everywhere as much as actually having

15:53

any like I know I'm doing it wrong.

15:56

In fact, a lot of them are doing it pretty well, they

15:58

just need to be reassured,

16:00

frankly. You

16:02

also talk about some of the headwinds for

16:04

young adults who are just getting started with

16:07

their financial lives, including the

16:09

fact that the cost of college

16:11

has gone up so much. What are

16:13

some of the key challenges for people in

16:15

this age group? I

16:18

think there are several, right?

16:20

One is that we're

16:23

in overall a more affluent society

16:25

than certainly the society was when

16:27

I graduated from college in 1986.

16:31

Social media makes it a lot easier

16:33

to see what your peers are doing. And I think

16:35

there is a bit of sort of norm setting

16:37

that happens when you see everybody else doing it

16:39

and you think you should be doing it too. It

16:43

is also true that the median

16:45

price of housing, whether

16:47

you're renting or buying, versus

16:49

the median salary is significantly

16:51

higher. The median price of

16:53

a car is significantly higher

16:56

versus the median salary. So a

16:58

couple of really big ticket items

17:00

that most people anchor on as

17:02

signs of, I'm an adult now

17:04

because, are really more expensive. We

17:07

lose a little sight over the fact

17:09

that they're also probably a

17:12

lot nicer. And some

17:14

of that increase in cost is actually reflecting

17:16

a much wealthier society.

17:18

So the car that you

17:20

buy now is nicer and safer.

17:23

The house that you buy or the

17:25

apartment that you rent is probably per

17:28

square foot bigger than what, I

17:30

would have gotten in my age, certainly has nicer. So

17:33

it's not quite apples to apples in terms

17:35

of what you're getting for the money. So I think that's

17:37

just true. And then I also think

17:40

because society overall is more

17:42

affluent, people are more uncomfortable

17:45

struggling with stuff. Now I don't wanna sound like

17:47

a cranky old boomer who says, oh, kids these

17:49

days, because it's more than that. It really is

17:51

more than that. These big

17:53

ticket items being one of them to

17:56

get the same level of external achievement

17:58

is just harder. But

18:00

it's also, I think, a more

18:03

affluent society really struggling with, you

18:05

know, sort of a lifetime income curve.

18:07

And, you know, it takes a while

18:09

to have your salary increase to the

18:12

level that you grew up with. I

18:14

had this conversation with one of my kids who was saying,

18:16

I'll never be able to afford what you and dad have.

18:18

And that may be true, right? Especially for my child who's

18:20

a musician. He

18:23

said, oh, we'll never take nice trips. And I was like, honey, do

18:26

you remember the vacations we took all the way

18:28

through middle school? And I said,

18:30

what do you mean? We always used to see, you

18:32

know, their great-grandmother for spring break. And I said,

18:34

remember where we stayed where dad and I used

18:36

to pull the mattress off the sleeper sofa in

18:38

the living room because it was so uncomfortable. We

18:40

couldn't sleep on the sofa bed and we gave

18:42

you guys the bedroom. And he's like, yeah,

18:44

I love that place. And I was like, well, let's

18:48

talk about how fancy a vacation that was. Like,

18:50

it wasn't. It was like negatively fancy.

18:52

Or the apartments we used to rent at the

18:55

beach with no screens on the windows and mosquitoes,

18:57

like, you know. And they don't remember any of

18:59

that, right? They're anchoring on the nicest bit of

19:01

our life that happened, you know, when I was

19:03

in my fifties, right? So some

19:05

of it, I think, is just that comparison,

19:08

too, that people lose hate of. So, but

19:10

I don't mean to derail this. I do

19:13

think that because those big ticket items, whether

19:15

it's colleges and debt, certainly

19:17

starting off with debt is something that the boomers

19:19

did not do to the same degree, right? College

19:21

was just much more affordable. So you're starting in

19:23

the hole from a debt perspective. Those

19:26

big ticket items that you view

19:28

as milestone achievements are coming later

19:30

because they cost more. So,

19:34

Anne, you mentioned the comparisons, people comparing

19:36

themselves. I wonder if you can touch

19:38

on the role of social media in

19:41

that, where it seems like

19:43

younger people especially are, you know,

19:45

comparing their vacation or their wedding

19:47

or their house to

19:50

their peers and often coming up feeling

19:52

pretty bad about themselves. So maybe you

19:54

can talk about that dimension and whether

19:56

that came out in your focus group discussions.

19:59

Anne-Marie, thank you. When I was

20:01

running the focus groups, what I was

20:03

really curious about is where people got

20:05

financial information and certainly the overwhelming source

20:08

of financial information with social media. If

20:10

I knew then

20:12

what I know now, I would have maybe probed a

20:14

little more about that sort of lifestyle

20:16

anchoring and that sort of normalization of

20:18

what everybody's doing, it kind of a thing.

20:21

And again, I think when you're younger,

20:23

peer influence is so important and it's

20:26

so hard to not get swept along.

20:28

I just saw an article today and I've been

20:30

following this trend myself for the last what,

20:32

six weeks since it kind of bubbled up

20:34

about loud budgeting and sort of being really public

20:36

about saying I'm trying to save money. So

20:39

there's an example of social media actually

20:42

being a really healthy way

20:44

to use your peer group

20:46

to affirm healthy behavior and

20:48

normalize not spending money

20:50

because everybody else's, the article started with somebody being,

20:52

you know, saying, oh, I canceled my, you know,

20:54

my milestone birthday trip to London because I don't

20:56

have the money. I'm like, what, what? 30 years

20:58

old and you're taking a milestone trip to like,

21:00

what? So, you know,

21:03

so that's kind of what I was referring to

21:05

before. This sort of normalization of luxury spending, I

21:07

think is very attributable to social media. I

21:09

mean, it used to be that you'd see

21:11

lifestyles of the rich and famous once a

21:13

week on TV and now it's just in

21:15

your feed constantly. And then, you

21:18

know, so you have this aspirational level of

21:20

spending, normalizing things like weddings, right?

21:22

Well, of course you have to have XYZ. Of

21:25

course it has to be a wedding weekend and

21:27

not just an event. Of course, you know, it

21:29

just normalizes stuff. And then you

21:31

see your peer group starting to do some of those

21:33

things and then suddenly it's the

21:35

new normal, right? So I think that's very detrimental.

21:38

Like also some good stuff on there, right?

21:40

Like the loud budgeting. Yeah.

21:43

So one recurrent theme we noticed in the

21:45

book is kind of the

21:47

idea of getting out of the

21:49

shame spiral, you know, not be

21:51

rating yourself because you didn't start

21:53

saving earlier or made some financial

21:55

mistakes along the way. Was

21:58

that something that came out of the... focus

22:00

groups that young people

22:02

are beating up on themselves and,

22:04

you know, maybe getting in their

22:07

own way because they feel bad

22:09

about previous mistakes? Not

22:11

really. I think that's maybe

22:14

I gather that more in one-on-one conversations

22:16

and maybe that's just telling you a

22:18

little bit about myself. I certainly felt

22:20

that way. And I think, you know, all the research that

22:23

we read about losing weight or

22:25

trying to overcome habits, right? The

22:27

script that starts playing in your head about,

22:29

I can't, I can't, I can't. I think that

22:31

came much more from there. But I have seen

22:34

and felt and heard when I'm

22:36

having one-on-one conversations with people of

22:39

any age, when I mention

22:41

that, you know, you can just

22:43

see their posture change. Somebody

22:46

had tears well up in their eyes. This one young woman

22:48

I was talking to when she asked me if she was

22:50

doing okay, I said, yeah, you're doing fine. And

22:53

she actually had tears in her eyes. And she said, oh, thank

22:55

you. I never know if I'm good

22:57

enough or doing it well enough. And to

23:00

some extent, maybe this goes back to social media as well,

23:02

right? This constant and maybe

23:04

to some trends I'm seeing playing out

23:07

just with younger people, you know,

23:09

feeling like the stakes are very high for

23:11

them all the time. I don't think I felt like that

23:13

when I was their age, right? That I have to get

23:15

into the right school. I have to get the right job.

23:17

I have to do this right. Otherwise, you know, something terrible

23:19

will happen. I'm not sure what the terrible thing is. But

23:23

this just constant fear of failure and

23:25

stress, right, which just seems to be

23:27

dimensionally different than I recall it being.

23:31

Do you sense that people in this age cohort

23:33

feel a little more comfortable talking

23:36

about money than previous generations did? And

23:38

if so, do you think that's a healthy development?

23:41

You talked about how your parents didn't

23:44

talk much about money at all, really

23:46

at home, and how that influenced

23:48

your thinking a little bit as you were starting out.

23:51

I think so. I think things like the

23:53

salary transparency, a woman whose name I'm blanking

23:55

on on TikTok who just asked people what

23:57

they're making, right? And people are saying that.

24:00

at this now budgeting. I

24:02

think it's something I'm hearing in the financial

24:04

services community. Financial advisors are getting more comfortable

24:06

asking their clients about their money stories, right?

24:08

I think all of this is healthy. I

24:11

think again, because so many people feel

24:13

like they should, I

24:18

mean, the word should, I hate the word should,

24:20

right? They should know more about personal finances. They

24:22

should be doing better. They should

24:25

be whatever. And

24:28

I think many families either feel reluctant to talk

24:30

about their money because they're worried that people will

24:32

think they have a lot and they don't want

24:34

their kids talking about, look how much money we

24:36

have and bragging, or, and I think much more

24:38

commonly, feel ashamed because they

24:40

are struggling with money and they don't

24:43

want their kids to know that

24:45

there are hard conversations happening. So I

24:47

think, I can't remember if I

24:49

put this in the book or not and I can't remember the

24:51

stat over my head, but something

24:53

like 70% of parents would rather talk about

24:55

sex education with their kids than money, right?

24:58

I mean, it's a really high percent would

25:00

rather talk about the thing we all think

25:02

is really uncomfortable than talk about money. So

25:05

there's clearly a lot of shame associated with it.

25:07

Otherwise we would be happy to talk about it. So

25:11

in the book, you share a lot

25:13

of kind of helpful hacks and tips

25:15

and tricks for young people who are

25:17

looking to get their savings programs on

25:19

track. Can you share some of

25:21

those ideas? Yeah, so,

25:24

you know, the biggest one, and this is

25:26

straight out of the 401k playbook is just

25:28

automate everything. Automate

25:30

the money going into the savings

25:32

account, automate the investing,

25:36

automate the escalation if you can, like you keep

25:38

saving more and some 401k plans will

25:40

let you do that, some won't. It's the

25:42

single most powerful thing you can do. And

25:44

then put it in a place,

25:46

put your money, put your emergency savings, you know, I

25:49

think, making

25:51

sure it's not really easy to see

25:53

and get is also really important. And if

25:55

you're saving into an IRA or a 401k,

25:58

it's kind of hard to get back out, right? it's

26:00

you have to do a request and it's a

26:02

thing, but also you pay these tax

26:04

penalties, which is uncomfortable. So, you know, that's

26:07

a safe place for your money longer term.

26:09

And in a true, true, true, true emergency,

26:11

and I talk a little bit about that in the book, you can get it

26:13

back, but it makes it very hard. I think

26:16

having money sitting in a savings account

26:18

that's on the same home screen as

26:20

your regular bank account is asking for

26:23

trouble, right? So getting it out of

26:25

sight, I think it's a very powerful

26:27

thing. You know, I think the

26:29

other really important hack that I talk about is again,

26:32

right out of the 401k playbook, which is save

26:34

more tomorrow, right? Make sure that

26:36

you continue increasing the amount you

26:38

save as your lifestyle gets better, as you

26:40

earn more money, because if you

26:42

don't do that, you will not be saving enough. It's

26:46

so painful to increase your savings

26:48

rate today because you have

26:50

to stop spending money and it's much easier.

26:52

You know, the younger you are, the more

26:54

likely you are to see meaningful

26:56

income increases, you know, as you get

26:59

more experience and become more valuable as

27:01

an employee. And so at least

27:03

for the first 10 or 20 years of

27:05

your working life, you can probably count on

27:07

seeing some, you know, pretty consistent

27:09

increases in your salary. And that's the great

27:11

way to get your savings rate up. One

27:16

mental trick that you shared in the

27:18

book to help limit spending is to

27:20

add a zero to whatever purchase you're

27:22

contemplating. And I thought that was such

27:24

a useful way of framing it. Can

27:26

you talk about that mental trick? Yeah,

27:29

so it's really

27:31

something that came about because we were,

27:34

my husband and I are serial rehabbers and

27:37

we over buy houses that need a lot of work

27:39

and then spend decades rehabbing them. So we're living in

27:41

an old house that we spent 13 years

27:43

putting up. And for

27:47

a while we were looking at

27:49

replacing a bunch of windows, which is

27:51

really not very cheap. And I was

27:53

changing the unit of money every

27:55

time I thought about spending some money, I'd say, well, that's a

27:57

window better not do it. Right. And Having

28:00

a handy thing that keeps your

28:03

eye on what you're trying to

28:05

achieve is so powerful. We

28:08

were thinking about buying it. This is

28:10

back in the early 2000s, buying a big screen TV.

28:12

I was like, oh, that's going to be two windows.

28:14

No, we don't need a new TV. I

28:17

want those windows. Then

28:19

it was like, well, how does that translate

28:22

into retirement? I want

28:24

to be able to live another six months

28:26

without running out of savings. That doesn't work. I

28:28

want to be able to buy a boat. No, that doesn't work either.

28:31

Then it was like, well, it's just how much more

28:33

money is it? Let's assume you earn a

28:35

7 percent return. That

28:38

money doubles every 10 years. In 30 or 40 years,

28:40

it is 10 times the amount. That's

28:45

soft math you can do. What

28:48

are the other challenges that people

28:50

face as they're just starting out?

28:52

It's how to prioritize building an

28:54

emergency fund versus saving for retirement

28:56

or paying down student loan debt.

28:59

You outline a hierarchy for

29:01

prioritizing those three objectives. Can

29:03

you talk about that a

29:05

little more? Sure. I've

29:08

seen people who use a similar hierarchy. I've seen

29:10

different ones. For me, it really boils down to,

29:13

and maybe this is again coming out of

29:15

my career, risk management and really avoiding the

29:18

really, really bad outcomes. Really,

29:20

really bad outcomes are outcomes that push you

29:23

into financial crisis or

29:25

bankruptcy. To

29:27

me, the number one priority is to

29:29

really focus on building up your emergency fund

29:31

because that is what's going to keep you

29:34

financially healthy. When you don't have

29:36

to run up credit card debt, when you

29:38

need to replace your tires or hit a

29:40

pothole, whatever the thing is, coming up with

29:42

that $1,000, $2,000, lose your job. Emergency

29:49

fund, even more important than

29:51

retirement. What

29:54

if you have an employer who offers a

29:56

matching 401K program? You

29:59

also really want the free- money. So

30:01

to me, if you don't

30:03

have a 401k plan, and you only have to

30:06

do this by yourself, you should just focus on

30:08

your emergency savings first, and then start working on

30:10

your retirement savings. If you do

30:12

have a 401k or a 403b or some

30:14

other kind of workplace savings program, and

30:17

you get matching from

30:19

your employer, then you need to

30:22

start working on both simultaneously. Here

30:25

you have at least three months of emergency

30:28

fund. And again, I talk about in the

30:30

book how you should think about three to

30:32

six months. And if you are in a

30:34

volatile industry, if you're self-employed, if

30:37

you know you're in an economic environment that may

30:39

make you more prone to a layoff, you might

30:41

want to lean more towards six months. If

30:43

you are a government employee and very

30:45

unlikely to get fired, right, maybe you

30:47

can do the three months. And

30:50

you're getting all of the free money from your

30:53

employer. You get the full match from your employer,

30:55

maybe not maxing out, maybe not at the target

30:57

savings amount you want to get to, but at

30:59

least getting the full match, then I think it's

31:02

very appropriate to turn your attention to paying

31:04

down high interest rate debt. So

31:06

that is debt with a, you know, it's a little

31:08

bit arbitrary, like more than you would get investing the

31:11

money in your 401k plan. I picked 8%. We

31:13

could argue about it at seven, it's not 10,

31:15

but 8%. You want to

31:18

pay that down as fast as you can. And you

31:21

want to continue making payments

31:23

on the low interest rate debt,

31:25

which might be federal student

31:28

loans or other

31:30

kinds of debt under that 8% model, but you really

31:32

want to get rid of that high interest rate debt

31:34

stuff first. We

31:37

wanted to switch over to discuss investing.

31:39

I was struck by in your

31:41

investment recommendations in the book, you're pretty

31:44

unequivocal about keeping things simple with target

31:46

date funds or perhaps a three index

31:48

fund portfolio. I'm curious, was it kind

31:50

of liberating to be able to provide

31:52

such clear cut advice to tell people

31:55

to just buy a basket of Vanguard

31:57

index funds, for example, since you're no

31:59

longer. working for an asset manager? Oh,

32:03

no, I don't think so. I mean, to me,

32:05

again, it goes back to how is

32:08

somebody gonna spend their mental

32:10

and emotional energy? And

32:13

I mean, the first thing I recommend is target date

32:15

funds because guess what? I used to manage target date

32:17

funds. I'm a huge believer in target date funds. I'm

32:20

a huge believer in active management

32:22

as well. I just think that

32:25

individuals, it's hard

32:27

to pick active managers because

32:31

especially in US equities, right? Most

32:33

managers don't outperform. So it requires

32:35

time and emotional energy and a

32:37

process and a lot of skill. So

32:40

I just think that's asking an enormous amount of

32:42

individuals. And at the end of the book, I do go into

32:45

some tips for investing and kind of say, look, if

32:47

you think you've got the time, the energy and the

32:49

skill, then like go for it. It's fun.

32:52

I did it for a long time. I think it's

32:54

fun. But most people don't think this stuff is fun.

32:57

Most people don't have the process or

32:59

the discipline like starts putting it into

33:01

judgy territory, just that the time and

33:03

the energy could spend doing

33:06

it in a process that they can

33:08

repeat. And I think unless you're

33:10

gonna do it that way, you're

33:12

really better off not doing it at all

33:14

and making it as simple as possible because

33:17

the sort of payoff

33:19

for the incremental amount of emotional and

33:21

intellectual energy you need to spend on

33:23

this is kind of uncertain. Do

33:27

you think there's a tendency on Wall Street

33:29

to make investing seem more complicated

33:31

than it really is or needs

33:33

to be? And what's

33:35

sort of the motivation behind that? You

33:39

know, I've thought this for years that

33:41

one of the main challenges for the

33:43

financial services industry when we talk

33:46

to our clients is that we think this

33:48

stuff is fun and interesting. Because

33:50

guess what? Most of America, like I said before,

33:53

just wants the whole thing to go away.

33:55

Just tell me I'm gonna be okay

33:57

and make it go away. I don't like this. It's

33:59

uncertain. certain. If you make

34:01

me think about saving for retirement, it's unpleasant

34:03

because I'm denying myself stuff I want right

34:05

now. It's volatile, you

34:08

can't promise me it's going to work and oh, by the

34:10

way, I'm going to die at the end of this. Why

34:12

should I like this experience, right? It's

34:14

just, there's nothing good about it. If

34:17

you don't happen to think this stuff is

34:19

intellectually interesting. So I think

34:22

a huge part of the challenge is

34:24

the industry is populated with

34:26

people who kind of

34:29

geek out on this stuff and sometimes

34:31

struggle to understand clients

34:33

don't share enthusiasm. So right out of

34:36

the gate, we're like we're a mismatch

34:38

of the intellectual sort of starting

34:40

point and then the vocabulary that we're using. I

34:44

think some of it is regulation in

34:47

that those of us who are still

34:49

subject to security voices have to be

34:52

extraordinarily precise about how we say things,

34:54

which makes us sound squirrely, frankly,

34:57

when we're talking because you can't just say

34:59

stuff. You have to qualify it

35:01

all the time. Okay, so right there, you're

35:03

already sounding and then you have to use

35:05

very precise language, which also is very unrelatable.

35:08

And, you know, I may have told you this

35:10

ages ago, Christine, back in my former life, where

35:12

it took us a huge amount of

35:15

effort to get regulatory and compliance

35:17

people to allow us to use clipart

35:19

to show the risks on the target

35:21

date funds for Jason Morgan. Like

35:24

how about saying this is a risky investment and putting

35:26

like that red circle with a line through it. That

35:29

is a pretty quick way. It

35:31

took us months to get them comfortable

35:33

using stuff that was that obvious. And

35:36

every time you get some industry move towards

35:38

simplifying some of this stuff, right?

35:40

Something happens and it gets pulled back the other

35:43

way. So some of that

35:45

is self-inflicted. And then yes, I will

35:47

finally say that I do think that

35:50

maybe some people I've seen it

35:52

happen kind of enjoy being mysterious

35:55

and knowledgeable and being seen

35:57

as experts, right? And when you want to be seen

35:59

as an expert. you tend to

36:01

lean in hard to jargon and sophistication

36:03

that doesn't help somebody understand very well.

36:05

But I don't think that's all of

36:08

the story. I want

36:10

to ask about financial advice and

36:12

whether in the focus groups you

36:14

got any clues as to how younger

36:17

age bands are thinking about financial advice.

36:19

You mentioned that they have sort

36:22

of widespread skepticism about sort

36:24

of the industry and the

36:26

system. But any feedback

36:28

on financial advice and the willingness of

36:30

younger people to hire financial advisors and

36:33

pay for them? Yeah,

36:35

and it was a little depressing to be

36:37

honest. I thought it was depressing and not

36:39

so depressing all depending on the hat you're

36:41

wearing. So I was actually quite encouraged to

36:43

see that people were really willing to take

36:45

financial advice from their parents. And I was

36:47

like, really? Wow, that makes me feel better

36:49

as a parent, like my kids are listening

36:51

to me, I think to a greater extent

36:53

than prior generations did. So clearly our, you

36:55

know, maybe helicopter parenting is paying off in

36:57

some regards, right? Our kids actually may listen

37:00

to us a little more. But

37:02

certainly there was a very

37:04

wide strand of

37:07

being willing to listen to social media

37:10

because I can trust my peers. And

37:13

I don't want to listen to financial

37:15

services institutions, because they're just

37:17

trying to make money off me. Which

37:20

kind of makes my head explode, right?

37:23

Because it's like, well, what do you think all

37:25

those people on social media are

37:27

doing? Like, what's their

37:29

financial model? Like, help me to understand

37:31

how you think, like, why are

37:33

they doing this? Some people really are doing this

37:36

from the bottom of the goodness of their hearts.

37:38

But I think a lot of people

37:40

are doing this to make money. And some

37:43

of them are extremely transparent about it.

37:45

So why do you

37:47

trust them more than a regulated financial services

37:49

institutions who employees will go to jail if

37:51

they do it wrong rather than somebody on

37:54

YouTube, right? I don't understand that. This

37:56

skepticism of the man and not

37:59

not being willing to understand

38:01

how the social media ecosystem

38:03

works with people, you know,

38:06

being sensationalist to

38:08

get clicks to sell advertising, you

38:10

get paid by brand management people,

38:12

or, and I think

38:14

we say this happened with the whole GameStop thing, right?

38:16

Maybe running a little pump and dump stuff. Like that's

38:18

just like, how do you think they're making money? Why

38:20

do you think they're doing this? And that struck

38:23

me as rather naive, to be honest. I

38:25

was surprised at the naiveté behind that. Like,

38:28

isn't everybody doing this somewhat motivated by money?

38:32

Right. Yeah. So we've talked

38:34

a lot about the target audience

38:36

for this book, you know, younger

38:38

investors in either Generation Z

38:40

or millennials. I could say younger non-investors,

38:42

right? The person I most hope picks

38:44

this book up is somebody who doesn't

38:46

see themselves as that investor. That's

38:49

a great point. Yeah. Thanks for clarifying

38:51

that. But we'd also like to talk

38:54

about parents who have, you

38:56

know, young adult

38:58

children or kids who are still growing

39:00

up. What advice do you

39:02

have for parents who are trying to

39:04

help their children? Navigate their finances when

39:07

they're just starting out. Aside

39:09

from giving my book to their children. So,

39:11

you know, I have to

39:14

say, and I have to check. I

39:16

mentioned this book earlier today and I thought, you know,

39:18

I need to see if it's still in print. I

39:20

don't know. It's a book called Money Doesn't Grow on

39:22

Trees. And I remember reading it when my kids were

39:24

in preschool maybe. And it

39:27

gave such a sensible sort

39:30

of outline for you want

39:32

your kids to be able to be

39:34

making good rational

39:36

financial decisions when they're in high

39:38

school. And you want to

39:40

give them control over their money so that you

39:42

can watch them spend

39:44

money. And the author for this advocated

39:48

actually having them spend clothing,

39:50

like all of it, right, besides

39:52

housing, basically. And with two

39:54

boys who really didn't care what they look like,

39:56

I wasn't willing to give them control over their

39:58

clothing budget because I knew they. just wouldn't buy

40:00

any. So I have standards

40:02

and they were not they were not hitting

40:04

them. So but we really tried to do

40:07

that. So I think, you

40:10

know, one of the things that I really learned in

40:12

my book that I knew was true for my own

40:14

story, but I had been quite struck at how true

40:16

it was for so many other people just not having

40:18

a place to learn about how many works. And

40:21

I don't mean investing in like, you know, becoming

40:23

a stock investor. I mean, that's great, too. And

40:25

if you want to do that with your child,

40:27

that's a fabulous thing to do. But I mean,

40:29

really basic stuff, like you have $10

40:31

a week in discretionary spending, and depending

40:34

on your own circumstances and where you

40:36

live and beliefs, that

40:38

might be for a middle school student that I don't know

40:40

however old they are, but that's your

40:42

money, you decide how you spend it, don't

40:44

ask me for any more period,

40:47

right? That's, that is

40:49

really going to teach them some lessons about money

40:52

with training wheels on because you'll be there to

40:54

rescue them when something happens, it takes them off

40:56

the rails. And I think that

40:58

that was the single most powerful

41:00

thing I took away from my children. And my

41:03

husband and I talked about that a lot and

41:05

applied it to all kinds of things like internet

41:07

usage. And when do you have certain privileges like

41:09

senior year in high school, all the all

41:12

the boundaries have to be gone. So you can

41:14

really not discover these, you know, sophomore year, or

41:17

worse yet, discover

41:19

them in your first job, like that's a terrible time to

41:21

figure out that you really need to do your homework. Don't

41:24

do that your first job.

41:26

So that to me was the most powerful

41:28

thing I could imagine. And some

41:30

of that kind of trickles through the book to how do

41:32

you put guardrails on yourself? I think if you're a parent,

41:35

how do you open conversations about

41:37

money up? I think one

41:39

thing that I was very conscious of in this

41:41

book is how much easier it is to be

41:44

vulnerable with someone, if they've been

41:46

vulnerable with you first. And

41:48

that's very much something I try to do

41:51

in my book is to say, look, just because

41:53

somebody's got the expert label doesn't mean they knew

41:55

how to do everything once upon a time. And

41:57

I think that can be very effective for fairs.

42:02

In our remaining time, we're hoping

42:04

to mine your deep expertise in

42:06

the retirement savings system.

42:09

You were central to JP

42:11

Morgan's retirement efforts for

42:13

a couple decades. So we wanted

42:15

to talk about target date funds, which

42:18

you managed. And some

42:20

of the work that you and your

42:22

team did comparing target date fund investors

42:25

returns to those of retirement plan participants

42:27

who were self-directed and picking their own funds

42:30

from the menu. Can you talk about

42:32

the findings there and what you see

42:34

as the implications? Yeah,

42:36

and actually, I don't cite

42:38

those directly in the book, but it's certainly

42:40

featured in as you point out my focus

42:43

on simplicity. I think even

42:45

professional investors get caught

42:47

in the fear greed cycle. And

42:49

again, just going back to behavioral

42:51

economics, there are so many

42:55

triggers for assuming you're right, having

42:57

overconfidence in your views, thinking that

43:00

when everything's going well, it will

43:02

keep going well, feeling

43:04

more confident about risking more money,

43:07

investing more in higher risk assets when

43:10

everything's going well. And if you're

43:12

a professional investor, you've got a team of people

43:14

who A, are trained in understanding that this is

43:16

the way their brains are working, and B, a

43:19

whole bunch of models and rigor and peers who

43:21

are working to

43:23

factor that those biases into

43:26

the way you actually implement decisions so

43:28

that you are less likely to fall

43:30

into those traps. I think when you

43:32

look at that specific research we talked

43:34

about, right, and it's not just the

43:36

work that JP Morgan published, but Dalbar

43:38

publishes research like this every year, individuals

43:41

who trade and Morningstar has done a lot of this research

43:44

too, I should say, when you look at

43:46

the way individuals trade in and

43:48

out of things, whether they're individual stocks

43:50

or mutual funds in their

43:52

own investment accounts or inside of 401k

43:54

plans, they typically

43:57

buy high and sell

43:59

low. over and

44:01

over and over again, which is how you

44:03

destroy wealth, or

44:05

they're wrong risked.

44:08

And by that, I mean they're in their 60s

44:10

or 70s, we saw a lot of this, and

44:12

had 100% inequities, or they're 20 and 100% in

44:14

cash. So those two things,

44:19

right, buying high and selling low,

44:22

because you buy more when it feels good,

44:24

and you sell when you're worried, right, is

44:26

the opposite of how you make money, and

44:28

then just having the absolute wrong level of

44:31

risk for the time horizon that you've got.

44:33

And those two things, I think, are the

44:35

biggest contributors to that gap you see in

44:37

performance. So you

44:39

mentioned automatic enrollment and auto

44:41

escalation as both being two

44:44

very positive things

44:46

for younger employees

44:49

just starting out. Do you

44:51

think that there are other types

44:54

of nudges that might help people

44:56

from kind of a behavioral standpoint?

45:00

Well, I certainly think, and

45:02

it's just starting now, right, and I don't

45:04

know if this goes into your nudge category,

45:06

but certainly the potential now to add two

45:08

things, right, which are both coming out of

45:11

the secure legislation, right, to add emergency

45:13

savings funds and have those be payroll

45:15

deducted is huge. And

45:18

again, there has been a lot of research

45:20

done on Dr. Madrid and many,

45:22

many others over the years, right, if you don't

45:25

have emergency savings, people go into their 401k plans

45:27

and borrow more than they otherwise

45:29

would, just because it's, you know, you want to

45:31

take as much as you can once you start

45:33

borrowing, you tend to borrow more than you need.

45:36

And if you have an emergency savings funds, and

45:39

into that, I think that that's

45:41

a nudge, if you could automatically signed up for

45:44

that emergency savings, that's again, so powerful,

45:46

because so many people don't have emergency savings.

45:48

In fact, this one young woman who was

45:50

so worried about her retirement fund didn't have

45:52

any, she was contributing fabulously to her

45:54

401k, she had no emergency savings. And I'm

45:56

like, all right, well, you're doing fine for

45:59

retirement, but who? Oh, you

46:01

know, get the match, dial that down, get

46:03

your emergency savings set up because you don't want to

46:05

pull it out of your 401k. And

46:09

then the second one is the contributions

46:11

when workers are putting stuff into student

46:13

loan payouts. Right, I think again, for

46:16

so many people, student loans are

46:19

so challenging and the more help

46:22

you can give people to feel good about

46:24

paying off those student loans, the better. I

46:26

think, and I know a little bit less about

46:28

this personally, but, you know, seeing more financial wellness

46:30

type programs being integrated into the 401k system is

46:33

another way to help people. I don't

46:35

know that the uptake on those is as high

46:37

as it could be, and that's gonna

46:40

be an interesting thing to watch as

46:42

it evolves. I

46:44

wanted to ask about the retirement saving system

46:47

broadly speaking. We know that

46:49

younger age bands are more likely to job

46:51

hubs and older workers, they, you know, cycles

46:53

your job seemingly every couple of years. So

46:56

given that young workers are changing jobs

46:59

frequently, does tethering our retirement savings

47:01

to our employers even make sense?

47:04

Or should policymakers be

47:06

contemplating something like, you know,

47:08

thrift savings program for the

47:11

masses that would be, you know,

47:13

entirely detethered from

47:15

employers? So

47:18

I'm personally a huge fan

47:20

of the Australian system where

47:23

the employer is obligated to

47:25

pick a default provider. The provider

47:28

in the Australian system, the super system, is

47:32

not a government provider, they're private. They

47:35

are managed by fiduciaries, not the employer. So it's

47:37

a private provider. But

47:40

the only obligation for the plan sponsor

47:42

is to create a default if

47:44

the individual does not choose a provider for themselves.

47:48

Australia also has mandatory contributions.

47:51

I also think that's good if you want to have

47:53

retirement savings for people, that's a whole other conversation. But

47:55

the individual can also choose their own provider. And

48:00

if you don't put in your provider when you

48:02

get hired by a new employer, they put you

48:04

in the default, but you can very easily roll

48:06

these together. You can keep track

48:08

of it on a single system. There's a single

48:10

dashboard right in Australia that you can see everything

48:12

on. And to me, that kind of is

48:14

the best of all worlds where you've got

48:18

a default, you've got a sort of fail safe,

48:20

but you also have the ability for the individual

48:22

if they choose to, to sort of say, yeah,

48:24

this is what I want. And then they can

48:27

have that follow them around for their whole career.

48:29

So I think that's incredibly powerful. I

48:33

mean, I know why it started that it

48:35

was an employee benefit, you know, that was

48:37

the way our system evolved. I think in

48:39

hindsight, right, nobody would create that system on

48:41

purpose. And I think a system

48:43

where you've got the

48:46

ability to contribute to a single pool,

48:48

but that pool is accessible from any

48:50

employer platform. You

48:52

know, coming out of the industry, I do believe that,

48:54

you know, a competitive,

48:57

well regulated with

48:59

appropriate oversight private market is going

49:01

to come up with innovations and

49:04

probably have a more robust experience

49:06

than a pure public system would

49:08

like the Federal Stress Savings

49:10

Program. But I think

49:12

there's a lot to learn from how that

49:14

works, assuming you can have the portability or

49:16

the ability to tap into that wherever you

49:18

want it. So

49:20

we just have a few minutes left here.

49:23

So we'd like to kind of zoom out

49:25

and talk a little bit about your own

49:27

experience, both during

49:29

retirement so far and during

49:32

your career. You had

49:34

a very high profile position at JP

49:36

Morgan and were well regarded for your

49:38

work there. We often hear that

49:40

people can really feel a loss of identity

49:42

when they step away from a career like

49:45

that. Can you talk about

49:47

whether you felt that? And if so, how

49:49

did you cope with those feelings? You

49:52

know, I didn't feel that. And I

49:55

don't know if it's a

49:57

part of it is that we announced that I was leaving in March

50:00

of 2020. And the

50:03

world just kind of stopped revolving the

50:05

following week. So I suspect

50:08

I would have felt that a little more

50:11

acutely because that off-boarding process

50:13

would have been nine months long or whatever it

50:15

was, it would have involved, would have

50:17

felt like a perpetual goodbye party. I was

50:19

gonna go speak at conferences and visit clients

50:21

and do a world tour. And all of

50:24

that would have been gratifying and made me

50:26

really conscious of what I was leaving. I

50:29

didn't leave anything except

50:31

a really chaotic and unpleasant sounding like

50:33

work situation, frankly. I mean, it just

50:35

sounded really hard to navigate. And I

50:38

just remember telling Dan Oldroyd, who was

50:40

person who took over and was sort

50:42

of my deputy, I just remembered

50:44

telling him, I am so grateful I'm not in charge

50:46

of any of this. Like, sorry,

50:48

you know, like I don't have to worry about, you know,

50:50

because once you announced you're leaving a job like I have,

50:53

like I was still there and I was still engaged and

50:55

I was still part of the team, but like I wasn't

50:57

actually making any decisions anymore.

50:59

So that was a wonderful,

51:01

wonderful thing for me personally. I

51:04

think the team did a fabulous job navigating it, but like

51:06

it must have been so stressful. And

51:09

then, you know, as the pandemic was ending,

51:11

I had a couple of things I knew

51:13

I wanted to do when I was leaving

51:15

and was very public about. Like one was

51:17

work on this book, which took me

51:19

a little longer than I thought, but here we are. And

51:22

the second was to do this pilgrimage

51:24

walk. And I had read a

51:26

book before I actually had decided to

51:28

leave JP Morgan about the Via Francigena, which

51:30

is a pilgrimage trail from Canterbury,

51:33

England to Rome. It's a thousand miles.

51:35

And I just remember feeling

51:38

this overwhelming, I have to do this

51:40

when I read the book and it's the first

51:42

and maybe only time in my life, I'm not

51:44

particularly at all religious, but I

51:46

just was such a compulsion.

51:48

I have never felt that strong a compulsion to

51:50

go do something. And I had planned

51:53

on doing that sort of shortly after I

51:55

left and as you know, the world did not permit

51:57

me to do that, it was because of COVID, but.

52:00

It turned into a real kind of touchstone

52:02

for me that I was going to do

52:04

this walk. And between the book and the

52:07

walk, I felt like I knew

52:09

what I was doing. And

52:11

then the world, like I said, was just completely shut

52:13

down. So I didn't really notice that

52:15

I thought it was like, what was there to miss?

52:17

Nothing. So that also frankly helped, I think. I

52:21

wanted to ask about your career

52:23

and the fact that you managed to be

52:25

a very successful woman in a field that

52:27

is largely male dominated.

52:30

So what are your key tips for women

52:32

who are building their careers, I

52:34

would say, inside or outside the

52:36

financial services industry? So

52:39

I guess I'd say a couple of things.

52:42

And I don't know if it's because I

52:44

grew up with brothers or what. And

52:46

I have to say, I think JPMorgan

52:48

has consistently done an extraordinary job of

52:51

having very senior women. And

52:53

even when I got to JPMorgan asset management,

52:55

there were already very senior women there in

52:57

the 90s. So I never

52:59

felt like I was often

53:01

the only woman in the room. But

53:04

very quickly, that actually stopped being true.

53:06

And I can remember even in the

53:08

early 2000s, being on all female deal

53:10

teams and walking into finals pitches and

53:12

having a bunch of guys coming out

53:14

and then a bunch of women going in. And

53:18

we did because often HR benefits

53:21

people are women. So it just

53:23

it was quite noticeable, actually. So

53:25

I don't think I ever experienced

53:27

personally that sort of in your

53:29

face discrimination. I

53:32

certainly did notice in meetings what you hear a lot

53:34

about, and I think happens all the time, which is

53:36

that you say something and then a guy says that

53:38

three or four minutes later and everybody goes, Oh, what

53:41

a great point you made, sir. Right. And

53:43

it's like, well, I just said that. And I

53:45

certainly have actually made deals with in meetings with

53:47

other women to make sure we call each other

53:49

out and make sure. Yeah, that was a great

53:51

point. And just made it 10 minutes ago or

53:53

whoever just made that 10 minutes ago. And

53:56

that helps. I think that's a great thing to

53:59

do. Find some allies. and make sure that you

54:01

don't get talked over. I

54:03

think the younger generation, again, is so much

54:05

better at that step than we are.

54:08

I think another thing that I would always

54:10

say to women, and I would

54:12

say it to men too, but I think women especially

54:14

struggle with that if they're thinking about having children, is

54:17

to know what your priorities are

54:20

in terms of career

54:22

progression, you know, the importance

54:24

of being compensated, keeping your

54:27

skills fresh, you know, I

54:29

don't know that anybody talks about work-life balance

54:31

anymore, but like if you got offered the

54:34

chance to do a big deal or

54:37

you had a big commitment with your child, which one would

54:39

you pick? Like there's no right answer here. Everybody's

54:41

got their own priorities for all

54:43

kinds of reasons, but if you don't know what

54:46

they are, when you get

54:48

confronted with a choice, and I remember

54:50

this happening to me in, I

54:52

guess it was 2000, right, when I came

54:54

back from attorney's leave after my second child was born,

54:57

I got put on this sort of internet lab

54:59

Morgan project, which was a huge big deal, and

55:02

we were, you know, in

55:04

a fun room with beanbag chairs and

55:06

free food, and we were going to

55:08

break everything and reinvent financial services with

55:10

this crazy internet stuff, right? This was

55:13

almost 25 years ago now. So I

55:16

just found myself staying later and later at work

55:18

because there was all this cool stuff, and we

55:20

were all innovating, and it was really intellectually exciting,

55:22

and then I just remember thinking, wait, I'm getting

55:24

home at 730. Like what the heck? I've got

55:26

a nine-month-old at home like, no, no, no,

55:28

no, no, and I pulled way

55:31

back and accomplished

55:33

a little less in that role than I might have,

55:35

and it may have affected my career, and I'm

55:37

fine with that because I

55:39

had a priority, and that was making sure I was

55:41

home in time to have dinner with my baby,

55:44

or certainly, you know, feed him

55:46

and have bath time with him and read him a story

55:48

before he went to bed, and I was sliding in, you

55:50

know, 10 minutes before bedtime kind of a thing, and that

55:52

I just was like, this is not the person I want

55:54

to be, and it made that choice.

55:56

I didn't mind making the choice because I knew I was

55:58

out of alignment with him. my values. Well

56:03

Ann, this has been such a fun and

56:05

wide-ranging conversation. Thank you so much for taking

56:07

time to share your insights today.

56:09

We really appreciate it. Thank you

56:12

and it was great fun on my side too. Thank you. Thanks,

56:14

this has been great. Thank

56:22

you for joining us on the Longview. If

56:24

you could, please take a moment to

56:26

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56:35

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56:41

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56:57

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56:59

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57:01

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57:04

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