Veronica is an award-winning reporter for The Wall Street Journal, co-host of the “Secrets of Wealthy Women” podcast, and author of the new ebook, “Resilience: How 20 Ambitious Women Used Obstacles to Fuel Their Success.”
Veronica shares some of the biggest lessons she’s learned from the incredible women featured on her podcast, including Ayesha Curry, Maria Sharapova and Barbara Corcoran. She also dishes on the most important career and financial advice she’s gotten from female CEOs and other women leaders. Listen in as Veronica shares her advice for what to do when you’re afraid to take that leap in life and in business, and why you should never give up. She also discusses the best financial advice her mom ever gave her, and why she followed it to the letter once she was out on her own.
Then, in mailbag, Jean tackles a question from a listener who’s unsure how to fund her family’s much-needed home improvements, and also offers advice for how best to ask for a raise at your annual review. She also dives in to help out a woman who is considering buying a home for her aging mother-in-law — but only if it’s not going to put her own retirement at risk.
Lastly, in Thrive, we tackle the problem of the boomerang kid — the adult child who moves back home with mom and dad. Jean gives us a run-down on how to set those all-important boundaries so that your sanity and your relationship with your child remain strong.
This podcast is proudly supported by Edelman Financial Engines. Let our modern wealth management advice raise your financial potential. Get the full story at EdelmanFinancialEngines.com. Sponsored by Edelman Financial Engines – Modern wealth planning. All advisory services offered through Financial Engines Advisors L.L.C. (FEA), a federally registered investment advisor. Results are not guaranteed. AM1969416
Jean Chatzky: (00:07)
HerMoney is supported by Fidelity Investments. We want you to demand more from your money, so start by knowing what you own and what you owe. We’ll help you take the next step at Fidelity.com/demandmorenow. HerMoney comes to you through PRX.
Jean Chatzky: (00:26)
Hey everybody, it’s Jean Chatzky. Welcome to HerMoney and I’ve got to confess, before we kick this off, I’ve got a bit of an ear worm. On today’s episode, we are talking about what it means to be a wealthy woman, but the song that is playing in my head is actually Witchy Woman. Do you remember Witchy Woman from like the 70s or the 80s. I think I was in high school, but it might have been junior high. I’m going to do you all a favor and not sing. But we are going to dig in to what that word means. What does it actually mean? Not to be witchy but to be wealthy and how do you actually go about reaching that goal? Maybe it is something that you are striving for in retirement. Maybe it’s something that you’re hoping to buy, a piece of property, means a little bit different for everyone. And my guest today, who is in studio with me, has done a lot of digging into just what it means. She’s got a podcast of her own called Secrets of Wealthy Women. Veronica Dagher is an award winning reporter for the Wall Street Journal. I am sure I’m pronouncing it right because she said it’s dagger, like the knife, and on her podcast she gets to chat with everybody from Maria Sharapova to Rebecca Minkoff. And she has pulled all of these thoughts together into a new ebook about how 20 ambitious women who have been on her podcast have used obstacles to fuel their success. It’s terrific and it’s called Resilience. Veronica, thanks for being here.
Veronica Dagher: (02:10)
Thanks for having me. It’s great to be here. And what you didn’t mention is that you were a guest on my podcast, which was like my absolute favorite episode.
Jean Chatzky: (02:17)
Oh. You’re very kind. Wait, I was not the only guest on your podcast. You actually pulled together this group of personal finance rock stars.
Veronica Dagher: (02:28)
Jean Chatzky: (02:28)
I felt like a rock star in that group, I have to say.
Veronica Dagher: (02:30)
You were the lead singer.
Jean Chatzky: (02:32)
Sharon Epperson was there and Farnoosh Turabi.
Veronica Dagher: (02:37)
Jean Chatzky: (02:40)
So many people. It was really, really fun. So, if people have not listened to that episode, that might be a good place to dip in. You told us as we were getting ready for this show that you actually think your podcast has the wrong title. Tell me about that.
Veronica Dagher: (02:53)
Yes. You know, so there’s been a lot of debate about this. It’s somewhat settled for now, but you know, I think when some women and some people hear the word wealthy, they get a little scared away. And so I book my own show. I’m out there hustling for guests and trying to get those big names to come on my show. And more often than not, part of my explanation to them or part of my pitch is, hey, wealthy has many meanings. It doesn’t mean I’m going to sit here and ask you how much you’re worth, how much you want to make. Are you rich? Any of those sort of questions. That’s not what I’m asking. I see wealth as a very holistic proposition. So it’s just how you see your family, your health, your finances, your career, your life. Just everything that has to do with you as a woman is my idea of wealth. And so I think we can sometimes seem like we’re misnamed because we’re not only for most people, wealth is just dollars and cents. And for us that’s not the case. And so I think sometimes people say, oh, you know, this isn’t the show for me because, oh, I’m not rich. Well, no, this is a show about resilience. This is show about overcoming obstacles. And we talk about personal finance too. But part of my goal with the show is also at the same time understanding people’s misconceptions about the word wealth, but also trying to challenge women’s. misconceptions.
Jean Chatzky: (04:15)
Well, I think that’s true. And I have heard a lot of what you’re saying in the title of my latest book. So when I was putting out this book that I ended up calling Women With Money…
Veronica Dagher: (04:26)
It’s a great book.
Jean Chatzky: (04:27)
Oh thank you. But I got a lot of pushback on the title.
Veronica Dagher: (04:31)
Jean Chatzky: (04:31)
Because people felt like I might be being a little exclusive. That if you weren’t a woman who already had a lot of money, maybe it wasn’t going to be the book for you. But in fact it was, we’ve all got money and Suze Orman already had a book called Women and Money so I wasn’t going there.
Veronica Dagher: (04:50)
Jean Chatzky: (04:51)
But in general, I do think there is this wall that we put up when we are afraid that people perceive us as maybe too successful.
Veronica Dagher: (05:00)
Right. People are afraid to own their success sometimes. Women sometimes actually do judge other women, right? But I think there’s also this idea of like, why not? If we were a bunch of guys sitting around, I’m generalizing again, but I don’t think we would be having these conversations at all. And I interview so many women who are multimillionaires, billionaires and I can tell you I’ve probably done 50, 60 interviews at this point for secrets of wealthy women podcast. And I can tell you on one hand, probably on one hand, that’s the amount of women who’ve said to me, either on air or off air that, yes, I’m a wealthy woman. I see myself as quote unquote rich. Many of the other women are just like, I don’t like that word. That doesn’t apply to me.
Jean Chatzky: (05:44)
Does it apply to you?
Veronica Dagher: (05:45)
Jean Chatzky: (05:46)
Veronica Dagher: (05:47)
Well that’s a really good question because that kind of ties back to like, oh, what do you see as wealthy? Yes. I feel very blessed. I feel like there’s a lot of abundance in my life. Yes. I feel wealthy. I live in this country. I have opportunities. Am I a millionaire? No. If that’s what you mean by wealthy. No. But yeah, I do feel wealthy. I mean, I work at the Wall Street Journal. I have these incredible opportunities. I’m talking to you on your podcast. Like, of course I’m, wealthy, like this is crazy. You know, like never in a million years would I have thought I’d be in this position. So in that way, in terms of opportunities, in terms of dollars and cents, I would like to have a lot more money than I have. But, I would like to think if I was a millionaire, multimillionaire, I would own that and say, yeah, I made it. I’m wealthy, But in my mind, that million dollar mark, until that’s in my 401k, I don’t think I’ll feel that.
Jean Chatzky: (06:40)
I get that. Yeah, I totally get that. Let’s talk about what you’ve learned from the women on your podcast. You’ve had Barbara Corcoran, she’s been a guest here. Bethany Frankel. What stories have resonated most with you about overcoming obstacles?
Veronica Dagher: (06:58)
So, I love Barbara Corcoran. She’s one of my absolute favorite guests. As you know, real estate mogul, shark tank star, has her own podcast now too. She had told a couple stories that really connected with me. She had dyslexia as a kid and so she had a lot of issues in school, struggling in school, being one of those people who, you know, she went to, from what I understand, all Catholic schools too, and just trying to, you know, raise her hand, trying to get accepted, have to go in front of the class. The kids would be making fun of her because she didn’t speak well. I mean, that wasn’t my specific experience, but I think why I could relate to that is idea of that fail publicly and you get up again. You try again, you try again. And I think that kind of harkens back to my early days doing video at the Wall Street Journal in a weird way, right? Because we were, you know, we were among some of the earlier groups doing it and I had no television or video experience and they said, you know, go out and try it. And I was like, well, I don’t know how to do this. I’ve never done this before. They’re like, oh, just go ahead and do it. And some of those earlier videos were pretty bad. And so, then again, hopefully we’ve gotten better from there. I think we have. But the point is you sometimes have to fail very publicly, whether it’s you’re getting up in front of a class or getting up in front of a group and maybe not doing such a great job presenting. You try it again and you do it again and you do it again and then you improve and all of a sudden you’re an expert and you’re Barbara Corcoran who’s speaking to millions and millions of people in front of the country. So I think those are personal lessons that help you in business, right? You get stronger and stronger.
Jean Chatzky: (08:38)
And in life.
Veronica Dagher: (08:38)
And in life too.
Jean Chatzky: (08:40)
I mean, we’ve had so many women on this show, myself included, who are proud to acknowledge that we got fired at one point, because not only is it a little bit of a badge of honor, but once you’ve been publicly fired, you go out, you get another job, you figure out how to do it again, you figure out how to do it better. And you never have to be scared about being fired again because you know that you can pull yourself up.
Veronica Dagher: (09:09)
Right. And I think that applies not just for jobs, but also, like you said, in your business life, in your personal life. You know, my dad died when I was 11. I saw how that kind of turned our world upside down. And sometimes when I think of I’m afraid to do something in my career or in business, I kind of go back to that moment. I’m like, you know what? I survived that. You know, I was 11 when that happened and I’m okay now. I lived to tell that tale. My family’s okay. We went through that. We’re all right. If we can survive that absolute worst moment, there’s nothing in business that’s going to throw you. I mean, yes, you could lose your job. Yes, you lose your house. We saw so many people in 2008 went through hell. But there’s always hope and that was one of the main themes of the book is just don’t give up. You never know what’s going to happen.
Jean Chatzky: (09:59)
Whenever I have a money expert on the show, I want to know what was it that made them decide that they were going to focus on money. For you, was it the death of your dad?
Veronica Dagher: (10:09)
It was for sure. Yeah, that was huge. That was huge because my dad was the breadwinner and my mom stayed home. My dad handled all. He worked and he also handled all the finances. He paid all the bills. He managed the investments. My mom, she didn’t know how to even write a check. That just wasn’t in her skillset at the time. And so then when he died, it was like complete panic on her part because not only she was left with an 11 year old and a 13 year old to raise, me and my brother, but she also had to learn how do you write a check. What does it mean to have a financial advisor? My dad had a business too. How do you handle all the accounts with a business that has a staff and it has all these people depending on you. What does this all mean? And I just remember her sitting at the kitchen table with my aunt and one of her friends just looking at the checkbook and looking at all these investment statements and just being so confused and just crying. And I just remember thinking at 11 years old, that’s never going to happen to me. Like, not happening. I’m going to have a whole different future no matter what it takes. That’s not going to be my situation. So that was the initial motivator. But to my credit, I mean fast forward a couple of years later, I’m going off to college and while I was in college, my mom was always saying, you know, you have to be a financially independent woman. You know, the second you graduate you need to be maxing out your 401k. I don’t want to hear any excuses about that. You know? And this is someone who never even had a 401k, you know, and she’s like, you always have to be able to support yourself. You can’t depend on any man. And she loved my dad and they had a great relationship, but she was like, you have to be a financially independent woman. I don’t care what your situation is. Even if you have a great husband, you don’t know what’s going to happen. She really drilled that into me along with things like, you know what, you’ll have a credit card, but if you ever max it out and you can’t pay your credit card bill, don’t come crying to me. She’s like, it’s your problem. She was very tough love from the beginning financially and I think all of those lessons were so huge and so helpful to me.
Jean Chatzky: (12:19)
And so many lessons that not enough kids I think are getting today. This is a really good time I think just to take a quick break and remind everybody, along the lines of those 401ks, that we are sponsored by Fidelity Investments. What if you could demand more from your money and make your savings work as hard as you do and what if that help you reach your financial goals a little bit faster? It all starts with a financial checkup and an understanding of what you own and what you owe, and from there the folks at Fidelity will work with you to evaluate your investment options, to grow your savings. You can get started today at Fidelity.com/demandmorenow. We are talking happily with Veronica Dagher, host of the podcast Secrets of Wealthy Women and a longtime reporter from the wall street journal. If you had to look at all these success stories from the women that you’ve had on your podcast and translate them into actionable advice for our listeners, what would you tell them?
Veronica Dagher: (13:26)
Well, there’s a couple things. So there’s some career lessons and there’s money lessons.
Jean Chatzky: (13:30)
Let’s do career first.
Veronica Dagher: (13:30)
Career first. Okay. So the career lessons would be, except in the context of dating, no doesn’t always mean no. And I’m stealing that quote from, I think it’s Rebecca Minkoff, because a lot of these women I’ve interviewed are entrepreneurs or CEOs, all different types of leaders in business and throughout their careers, all of them have heard no multiple, multiple times. And it’s often they hear that no, or those noes, about those things that they want the most. So they want this opportunity, they hear no. And you see these women who are incredible, they’re wealthy, they’re successful, they’re beautiful. You think they have everything handed to them. And the reality is, what I’ve learned from the podcast and from this book is that they have had so many rejections along the line. And just because you are successful once doesn’t mean you’re going to be successful again. You just have to keep pushing.
Jean Chatzky: (14:27)
We’ve had so many women on the show who’ve told stories about the noes that they’ve received when trying to raise funding. That if you’re out in the market for venture capital, Kathryn Minshew from the Muse told us she went out 148 times before she got a yes.
Veronica Dagher: (14:46)
Jean Chatzky: (14:47)
You know, and the statistics are so much better for men. But I think you’re talking about things above and beyond raising capital.
Veronica Dagher: (14:55)
Yeah. Whether it’s raising capital, whether it’s putting your hand out and trying to get publicity for your business. I mean that was one thing Rebecca Minkoff the designer encountered. She wanted publicity in certain magazines for her bags and shoes. Sheila Johnson tried to get a loan to start her business, to start Salamander Hotels & Resorts. She had a proven track record from BET. They still told her, no. You don’t deserve a yes for your businesses. There are just so many instances like that where, I would hate to think it’s just because someone’s a woman, they’re being told no, but when you hear these statistics, when it comes to funding, when you hear the statistics, when it comes to how many women are in the C suite, you start to think, well maybe yeah.
Jean Chatzky: (15:40)
Of course yeah.
Veronica Dagher: (15:40)
There’s completely still a lot of obstacles. Even though it’s 2019, there’s still so many people just saying, oh well you know, stay in your lane. You can’t have that dream. You can’t be that person you want to be.
Jean Chatzky: (15:54)
What about the financial lessons? What mistakes or things did these women do with their own money that proved to be good things?
Veronica Dagher: (16:03)
I think Maria Sharapova, the tennis player, has been really savvy with her finances. She meets, I believe it’s quarterly with her financial advisors. She has advisors for just her personal finances and also her business because she’s got several businesses. And she’s very involved with the business, her candy line and all of her product promotions and also her personal finances. And she takes time every day to learn, to read the Wall Street Journal or read about personal finance. She asks questions, she keeps a list of questions that she wants to ask her advisor at the next meeting. She doesn’t just take yes or no for an answer when it comes to the adviser. She wants them to elaborate. She’s not afraid to just get in there and know what she doesn’t know.
Jean Chatzky: (16:51)
I love the keeping a list of questions. You know, it’s like when you go to the doctor.
Veronica Dagher: (16:56)
Jean Chatzky: (16:56)
Because you’re going to get in front of this person who’s the figure. You’re gonna forget what you wanted to ask.
Veronica Dagher: (17:04)
Jean Chatzky: (17:04)
You’re not going to remember until you’re 20 minutes down the parkway and then you’re going to be mad.
Veronica Dagher: (17:09)
Jean Chatzky: (17:09)
So yes, keep a running list. Open your notebook, ask your questions, take notes. It’s a smart thing to do. Notebooks are very hip.
Veronica Dagher: (17:17)
Very hip. Very cool. You can look very intellectual. You can get some nice ones. And then talking about financial advisors, another thing I hear some advisors doing with their female clients, and their male clients too, but I really like this, is ask the advisor to send you their questions in advance. So if the advisor has some questions for you, send that over to me in advance of our meeting and that way me as the client can prepare some of the answers or think about some of the things we’re going to talk about because I think there are some women out there that don’t like to be put on the spot, want to do a little bit of their own research before they come out with an answer for the advisor too.
Jean Chatzky: (17:50)
Is there a point in time when these women decided they were ready for an adviser? We get asked the question a lot. How do I know? How do I know when I’m actually ready for help? How do I know when I need it?
Veronica Dagher: (18:01)
Yeah, that’s a really good question. I think it depends on the woman. So Sandra Bernhard, who’s the comic, had some bad experiences with some advisers. She had some good ones too. But one of the things she always said to herself, she’s like, I’m always going to sign my own checks. No matter what, I sign my own checks. And that’s something I commit to. Now some of these other women have business managers for both their personal life and their business. And so they don’t necessarily sign their own checks. They work with more of a family office situation. But yeah, I think a lot of the women realize they need a financial advisor when they start getting presented with opportunities from the outside. And, when I say the outside, that could mean all of a sudden you’re famous, right? And your long lost cousin “Joe” that you haven’t ever met, or haven’t seen a year, starts calling you up and being like, oh hey Jean, can I have a loan for $20,000. I’m starting this new business. Or like, hey, you have the money. You should be able to help me. I hear this often and not all the women want to admit this on on air, but yeah, it’s a lot of family and friends often asking them for help. And it gets really difficult to say no to people that you love or you feel like you should love.
Jean Chatzky: (19:23)
That’s probably a better way of putting it.
Veronica Dagher: (19:23)
When they know. They google you and they see what you made at such and such conference or whatever the situation is. So I think they bring in that financial advisor to almost be like that blocker. Now I don’t mean to sound so cynical about family. I’m sure every family’s completely not like this.
Jean Chatzky: (19:39)
Oh please. We have listeners everywhere nodding. Nodding their heads. I’m going to ask you the Howard Stern question as we wrap up here and put you on the spot because in Howard Stern’s new book, he said Conan O’Brien, out of all of his interviews, was his favorite interview. Who’s yours?
Veronica Dagher: (19:54)
Oh gosh. That’s like choosing what my favorite type of dog is or something. You know what I mean? Cause I love dogs. I don’t have kids. Um, let’s see. My favorite interview was, oh, I want to say besides your panel about personal finance.
Jean Chatzky: (20:09)
Veronica Dagher: (20:09)
I would say I really, really like Laureen Arbus. And she is the heiress to the ABC fortune. So her dad, Leonard Goldenson started ABC network, ABC television, ABC radio. And Laureen is one of those people that, so she’s an heiress. Conceivably, she never would have to work the rest of her life. Yet she has spent her entire life, not only was she a media executive for many years, she ran Lifetime, she ran Showtime, in terms of their program and department, but she has spent so much of her time giving back. She is an enormous philanthropist when it comes to women, when it comes to people with disabilities. She has done so much for women and people who are less fortunate. It is incredible what she’s done with her wealth and her influence and she’s always connecting people, trying to give people opportunities. And I really respect that in someone who doesn’t necessarily need to do that. She could be going to lunch every day if she wanted to.
Jean Chatzky: (21:12)
Well, now our listeners who want to sample your podcast, have a good place to dip in.
Veronica Dagher: (21:17)
That would be great.
Jean Chatzky: (21:17)
Thanks so much for being here, Veronica. It’s been a pleasure. I hope you’ll come back.
Veronica Dagher: (21:21)
Yes, I would love to. Thank you Jean.
Jean Chatzky: (21:22)
And we will be right back with Kathryn and your mailbag.
Jean Chatzky: (21:29)
And we are back in the studio for mailbags. Sitting across from me is Kathryn Tuggle. Kathryn, you have met before on this podcast but I don’t know that you’ve been formally introduced to her. She is the Editor in Chief of HerMoney.com, our website. She is in charge of our newsletters which go out a couple of days a week. She manages our Facebook group. She’s a one man band when it comes to things, HerMoney and she is joining us on mailbag. Welcome.
Kathryn Tuggle: (22:02)
Thank you so much. Let’s dig into that bag.
Jean Chatzky: (22:04)
Yeah, it’s fun to dig into that mailbag. We’ve got a lot of questions. We hope that you’ll keep them coming. You can write us at firstname.lastname@example.org so keep them coming. What did you think of Veronica’s description of wealthy women?
Kathryn Tuggle: (22:20)
I thought it was perfect. I think wealth is so loaded, right? Immediately the instinct is to think millionaires, heiresses. But wealth is health. Wealth is family. Wealth is contentment. Wealth is zen after a yoga class, right? It’s so many things.
Jean Chatzky: (22:38)
Well for you it’s zen after a yoga class. For me, it’s pain after a yoga class. It is. I wish it wasn’t such a loaded word. Because when you write about money and finance as often as we do, I’m always looking for good synonyms and I’d like to be able to use wealth with abandon. But I think somebody says, oh, you’re wealthy, and immediately your hands go up. Like you’re being held up in a robbery because you deflect. No, no, no, no, no. That’s not me. When in fact I think it is a large part of our community is wealthy in some way.
Kathryn Tuggle: (23:15)
Right? For some reason, I think when you use the word wealth, it immediately has the connotation of I’m better than you. I have more than you. But I think we need to reclaim wealth as a word that is more synonymous with wholeness and sufficiency.
Jean Chatzky: (23:30)
Oh, I like that. All right. I’m going to hold on to that. I going to hold on to that as we forge forward with our mailbag. But before we do, tell everybody just a little bit about you. You are going to be a more permanent presence on the podcast. Where are you from? Besides yoga, which we know you love? What do you like to do?
Kathryn Tuggle: (23:51)
Well I’m originally from a small town outside Birmingham, Alabama called Toadvine.
Jean Chatzky: (23:56)
Kathryn Tuggle: (23:56)
It is a map dot. And yeah, I was raised by a family of savers. We grew our own vegetables. My mom taught me thrift store shopping as an art form. Got to go through every single piece on the rack. And yeah, I love personal finance and it’s been a passion of mine for my whole career. I’ve been writing about it, editing it, for the last 15 years and been with HerMoney for two years. Yoga, travel, writing. Those are my passions.
Jean Chatzky: (24:25)
All right, well we will learn more about you as time goes by. Let’s dig into mailbag. What do you have?
Kathryn Tuggle: (24:31)
A lot of good letters. Our first one comes from Katie in Kansas City and she says she’s on a journey to take control of her finances. She’s 31, married and just had her first child in February. She writes, my husband and I are looking to do some improvements to our home before the year is out. The total cost of these improvements would likely not exceed $10,000 and we’re trying to find the best option to finance them. One financial advisor we spoke to mentioned taking a loan against one of our 401k’s since it’s something we’d be able to see returned when we sell our house in five to seven years. I have a traditional 401k with my employer and my husband has a Roth 401k with his. I’m hesitant to do this because you’ve spoken against it before. However, I am failing to come up with a clear list of pros and cons. The same advisor also mentioned selling some of the corporate stocks I have of my employer to fund part of the improvements. Would a home loan or putting it on a low interest credit card be worth considering?
Jean Chatzky: (25:29)
So yes to all of the above. And I totally get why this is confusing Katie, but let’s just back up a second and realize whenever we’re looking to borrow money for something, we are always looking at the cost of that money. So when you borrow from a 401k, it’s a relatively low rate of interest. You pay back that interest quote unquote to yourself. That interest ends up back in your account and you usually have to do it over about five years. What you miss out on is the opportunity for that money, that $10,000 in this case, to grow. So if the market goes great guns over the next five years, that $10,000 isn’t going to be there. It’s going to be doing some work on your house. And for that reason I might look into what you could get in terms of a home equity line of credit or a low cost credit card. There are a lot of balance transfer credit cards out there these days with very low teaser rates. You may be able to find the same kind of credit card that would offer you very, very low interest for say the first 12 to 18 months. You have to be careful if you don’t think you’ll be able to pay it off within 12 to 18 months because at that point the interest rate on that card will shoot probably into the high double digits and that’s something that you want to stay away from. The home equity line of credit or home equity loan is probably your best option in this case. Rates right now are pretty low because interest rates are low. They’re about 4.75%, 5%. I know this cause I just did some research for somebody else. If you itemize on your taxes, if you’re still one of those people who itemizes rather than taking the standard deduction, then you can also deduct the interest on this home equity line of credit because you’re actually using it for improvements on your home under the new tax law. If you’re using the money from a home equity line of credit or a home equity loan for something other than home improvements, they’re no longer deductible but you would fall into that bucket. So weighing all of those things, I think that would be my preference. That would be where I would actually go to get the money and I wish you lots of luck.
Kathryn Tuggle: (27:59)
So a question for you, Katie said that they may be looking to sell their house in five to seven years. Is the home equity line of credit still smart with a sale that’s coming up that quickly?
Jean Chatzky: (28:10)
Yeah. So a home equity line of credit is a second mortgage. So is a home equity loan. Generally they have timetables of 10 years, so she’ll be pretty close to paying it off within that five to seven years. And because she’s going to improve the value of her home, she’ll probably get some of the money if not all of the money back. So from that perspective, I’m not worried about it too much. Look, I don’t like carrying additional debt. We all know this about me at this point, and so if I could get out of it before I saw the house, I might do that, but I wouldn’t really worry about it too much.
Kathryn Tuggle: (28:46)
Great. All right.
Jean Chatzky: (28:48)
Kathryn Tuggle: (28:48)
So our second letter is from Megan in Westchester, New York. She writes, I saw you speak recently and I was really inspired to start taking charge of my finances. I recently found out that my company has a low, a medium and a high range of salary for each level of a position. I found out that I am $11,000 under the median, but $10,000 higher than the low range. I’ve been at my company almost a year and at an informal review, my manager told me I was doing great and that I was a great hire. Also, I know one woman at my office in a similar role who is currently earning $12,000 more than me. I want to ask for a raise at my annual review. Do you have any advice on what I should bring up during the review to help me get as close to that median as possible?
Jean Chatzky: (29:32)
First of all, I love that you have done your homework, right? And I’m also wondering where I was speaking that you saw me, Megan, you have to send me another note and let me know. But you have done all the work, to know what you need to know, to argue for a raise on your own behalf. I would just get a little more detailed with all of it. When you go in for your salary review, you want to point out that you have a reputation, as you’ve already been told by your boss, of being an above average employee. In fact, being a great employee and then you want to back that up with documentation. I did this, you said it was great. I did this. You said it was great. I did this. You said it was great. And anything that you can point out that is additive to the company’s actual bottom line or cost cutting in some way. Anything that you can point out where you actually move the needle on the numbers is extremely powerful. So put that down in a document that you can actually leave behind with your supervisor once you have that review and then go in to this meeting prepared with the information that you just told me. I know, based on published information, that this company has a low, a median and a high range of salary for each level of employee. Based on the feedback that I’ve gotten from you, I have to believe I am a high level employee and I believe I should be paid like a high level employee. At that point, you don’t have to bring up your coworker, you don’t have to throw her under the bus so to speak, which could muddy the waters as far as your relationship with her. But you’ve said, I believe based on your feedback, I’m exceptional and you should pay me that way. And then just sit back and wait and see what he says.
Kathryn Tuggle: (31:30)
So she shouldn’t bring up her knowledge of her coworkers salary?
Jean Chatzky: (31:33)
I wouldn’t. I mean, I wouldn’t. Because although there is nothing illegal about talking about salaries with our coworkers, there are some employers who really don’t like it. And if you happen to work for one of those employers, who is going to think less of you because you’ve been having this conversation with your coworker, as well as thinking less of your coworker who gave you what was truly helpful information, I wouldn’t bring it up unless you absolutely have to.
Kathryn Tuggle: (32:08)
So here’s a twist.
Jean Chatzky: (32:09)
Kathryn Tuggle: (32:09)
What if that coworker was a male and you felt you were being paid less because you were a woman?
Jean Chatzky: (32:15)
I still wouldn’t bring it up unless I had to. If I have to, then I would bring it up. But at that point I might even try to gather more information about whether the men at this company are paid more overall than the women at this company. So I could make it general rather than personal. I tend to think that when it’s really personal, like one on one that doesn’t end well.
Kathryn Tuggle: (32:41)
Jean Chatzky: (32:42)
So thanks so much Megan. Great question. Do we have one more we share?
Kathryn Tuggle: (32:45)
We sure do. We have an anonymous letter.
Jean Chatzky: (32:47)
We like anonymous letters.
Kathryn Tuggle: (32:49)
Jean Chatzky: (32:49)
It’s always fine to be anonymous. We’re not going to get on your case.
Kathryn Tuggle: (32:52)
Our listener writes, my husband and I are mid-forties dinks. I had to look this up. Did you know what a dink is?
Jean Chatzky: (32:58)
I did, but I’m a little older than you. Double income. No kids.
Kathryn Tuggle: (33:01)
Double income, no kids. We max out our Roth 401ks and HSAs and we’re extremely fortunate to be high income earners, $250,000 plus. If we do nothing else, we’ll have about 2.2 million excluding our HSA dollars by age 59. We’ll be able to enter semi early-retirement with this plus our home will be completely paid off.
Jean Chatzky: (33:20)
Kathryn Tuggle: (33:21)
Nice. Next year we’ll have about $2,500 a month to invest. Our original plan was to beef up our retirement so we could possibly quit working a few years earlier. However, both of us are only children and my mother-in-law lives over an hour away. She’s nearing 80 and although in great shape, periodically needs us to help around her home. We’d like to help her buy a home about five minutes from us. If we do this, we anticipate our total cost will be about 1500 a month. She could not afford to live anywhere near our neighborhood without financial support of some kind, but my question is, could we be putting our retirement at risk by giving this level of support? If we were to invest that 2000 a month with an 8% return until age 59 it would boost our retirement buy another $700,000. Should we hold off on a move until she needs to be in some sort of care facility? She comes from a long line of centurions. Is there anything I’m missing here that I should be aware of? Do you recommend we chat with a tax advisor?
Jean Chatzky: (34:16)
I recommend you chat with your mother-in-law. I mean, all I’m thinking is that my mother, she’s going to kill me, but my mother’s going to be 79 in a couple of weeks, and if I was planning to up and move her out of her house without discussing it with her in this way, she might have my head. Now, you may have already talked to her about it, but she may not want it. She may be very enmeshed in her community. She may have a lot of friends. And one of the things that I worry a lot about is loneliness with older people. When I was writing age proof with Dr. Mike Roizen, he told me that loneliness, which is rampant among our elderly in this country, is as bad as smoking a pack of cigarettes a day. And I will never forget that. So I would say talk to her first, and see what she wants. See what her plan is for the future, and whether this may fit into her plan at some point, if not today. To answer your real question, I don’t think that helping her at this level is going to sabotage your retirement. I do wonder about, if she needs to go into a care facility, what that will cost and I’m wondering if maybe a better use for some of the money, although at her age of 80 it may be tough to get, but maybe a better use for some of the money would be some sort of an insurance policy that could help provide support for her true longterm care if she didn’t qualify for Medicaid and she needed to go into a facility around age a hundred. So I would absolutely talk to an insurance advisor. I would talk to your mother-in-law and I probably would talk to your financial advisor and just run some additional numbers. You and your husband sound like you are in fine shape for retirement. Fine, fine shape. But we often talk about the fact that people our age, and I’m your age. My husband and I are are right in there with you. We have college for our kids. At the same time, we’re thinking about retirement for ourselves. At the same time, we’re starting to think about our older parents. We can borrow for college, we can push retirement down the road. When our parents need help, we give that help and so we should really be prepared for it. But I think it’s a great question and I think it’s really nice of you that you are thinking of doing this at all. I mean, what a gift to your mother-in-law to have such a supportive daughter-in-law. We are not all like that.
Kathryn Tuggle: (36:57)
Such a gift.
Jean Chatzky: (36:58)
Yeah, I think it’s incredible. And let us know what happens. Please write us back and let us know what happens. Thank you Kathryn.
Kathryn Tuggle: (37:06)
Jean Chatzky: (37:07)
And today in Thrive we are talking about the boomerang generation. No, it is nothing new, but it is more common today with previous generations and many parents are struggling to manage their child’s stay back at home, both financially and emotionally as well as trying to forge a new relationship with that independent now curfewless adult who is living in their home. If this is you, if you’re in this situation, well your kid actually may need to adjust their thinking about household responsibilities, particularly if for the first 18 or 20 years of their lives, mom was the chef and dad provided all the laundry service. At this point, they should be responsible for their needs. Additionally, parents are wise at this point to set expectations about the duration of the stay and the financial obligations that a child is going to have to meet before the child moves back in. One thing you may want to consider is to start helping them set up a savings account or an apartment fund so that eventually they will be able to use that money to get off on their own. The point is you’ve got to set expectations so that you and your child are on the same page. And last and perhaps most important, take a little time for some internal dialogue with yourself. If your child’s short stay turns into a long stay, are you going to be okay with that? Are there underlying issues that may be preventing your child from launching fully into adulthood and do those need to be attacked with some counseling or treatment? What do you hope to get out of the next few months with your child back at home base? This adventure, like most others will probably go just a little more smoothly if you can go in with an open mind and an open heart.
Jean Chatzky: (39:12)
Thanks so much for joining me today on HerMoney. Thanks to Veronica Dagher for the great conversation. If you like what you hear, I hope you’ll subscribe to our show at Apple Podcasts and leave us a review. We love hearing what you think. We also want to thank our sponsor Fidelity. We record this podcast out of CDM Sound Studios. Our music is provided by Track Tribe and our show comes to you through PRX. We’ll be back next time with another terrific guest and we’ll talk soon.