When you think “bro culture,” where are you inspired to look? The frat house? The weightlifting gym? The bourbon distillery? What about the tech world?
Even though more women are being encouraged to pursue careers in S.T.E.M fields (science, technology, engineering, and math) we’re still woefully behind in certain industries, and tech is a big one. It’s now been five years since Apple, Facebook, Microsoft, and Google released diversity reports, revealing that they overwhelmingly employed white and Asian men. Since then, they all pledged to diversify their workforce and do better, but during that time, the needle hasn’t moved much. According to a report in Wired Magazine, at Google and Microsoft, the share of U.S. employees who are black or latinx rose by less than 1% since 2014, and the number of black tech workers at Apple remains unchanged at 6%… At Facebook, the tech force now stands at 23% female, up from 15% in 2014. In other words, none of these companies is anywhere even close to parity.
And while they certainly aren’t the only offenders, they’re only doing themselves a disservice — a 2018 study from Boston Consulting Group found that companies with more diverse management teams had 19% higher revenue… So, with those numbers in mind, why aren’t more companies taking more drastic measures to achieve parity? It’s a question this week’s guest is more than ready to tackle— Hilary Gosher is a Managing Director at Global Venture Capital and Private Equity Firm Insight Partners, where she leads the company’s due diligence and portfolio community. She also works as an adjunct associate professor at Columbia University, and co-founded an organization called ‘Declare,’ a nonprofit organization that provides women with the leadership, training and mentorship they need to succeed in S.T.E.M. fields, and break the barriers that have kept them out of the c-suite for so long.
Listen in as Hilary talks to Jean about the importance of women in technology — these days, every company is a software company to some extent, because the world runs on technology. Hilary references Stitch Fix as a popular tech company (which surprised us!) but she says the world of e-commerce is completely driven by tech for things like recommendation engines, for matching people with clothing, for pairing buyers and sellers, or enabling secure credit card transactions. Hilary describes the major differences between consumer technology (as described above) and enterprise technology, which is the kind of tech one sees used for things like managing mortgage lending, or schools distributing grades to students.
Hilary breaks down some of the barriers that may be standing in women’s way when it comes to increasing our presence in the tech world. She also articulates why it’s so important that women get more involved in tech in the first place — simply put, because so many businesses are tech-driven, this makes tech is a huge growth industry, and it’s paramount that women are active participants in the future economic growth of the country.
She also discusses how we can get more women interested in pursuing tech as a career — it’s not just semiconductors anymore. If you like math, tech is a great place for you to start. You can just as easily be involved in oil and gas as you can in fashion, since tech spans all industries and categories.
Jean and Hilary also talk about startup culture in tech, and break down some of the reasons why startups have historically not been so friendly to women. Being a minority in any environment can be very isolating, she says, but thankfully, more women are coming together today and creating communities within startups where they support one another. Speaking of women supporting other women, we also dive into the importance of getting a mentor, a sponsor, or an advocate at your company, and how to make the ask. (Hint: Don’t just ask, “Will you be my mentor?” Give them an indication of the time commitment you’re looking for and what will be involved.)
Hilary also discusses the nonprofit organization she co-founded, Declare, which seeks to bring female founders and female funders together for networking, co-working and inspiration. The pair chat about where we can all find potential business partners and mentors, including co-working spaces like Luminary, and The Wing. “There are so many opportunities for women to become leaders in all fields,” Hilary says. “There is so much more out there than our guidance counselors have led us to believe.”
In Mailbag, Jean and Kathryn tackle a question on what to do with a 401(k) from a previous job following a stint in grad school, and advise a listener who is curious what to do about updating a will and getting a new estate plan in place with her husband-to-be. Jean also discusses living wills, durable powers of attorney, and trusts. Lastly, we dive into a question from a listener weighting the options between getting a full-time job with benefits, and continuing to pursue her own business venture. In Thrive, Jean dishes on the importance of a spring financial checkup, and how to get your credit score back on track.
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
Hilary Gosher: (00:00)
We as parents should encourage girls to learn to code. Not all girls are going to be great at it. Not all guys are great at it. But I think women in the past have not been encouraged to consider it an opportunity and coding is fun. If you can do if then statements and understand basic logic, it’s a great career.
Jean Chatzky: (00:18)
HerMoney is supported by Fidelity Investments. We want to inspire you to demand more from your money by first knowing what you own, what you owe, and what you want from your money. We’ll help you reach your goals faster at Fidelity.com/demandmore. HerMoney comes to you through PRX.
Jean Chatzky: (00:41)
Hey everybody, it’s Jean Chatzky. Thanks so much for joining me on HerMoney. When you think the words, bro culture, where are you inspired to look? Do you look toward the frat house or the weightlifting gym or the bourbon distillery? How about at technology? Even though it’s true that more women are being encouraged to pursue careers in STEM fields, we are still so behind in some industries and tech is a big one. It’s been five years now since Apple, Facebook, Microsoft, and Google released diversity reports revealing that they overwhelmingly employed white and Asian men. And all of these tech giants committed to diversifying their workforce and doing better. But in that time, the needle really hasn’t moved much at all. According to a report in Wired magazine at Google and at Microsoft, the share of us employees who are black or Latinx rose by less than one percentage point since 2014. And the number of black tech workers at Apple remains unchanged at 6%. At Facebook the tech force now stands at 23% female, up from 15% in 2014. That’s a little bit of progress. But in other words, none of these companies is anywhere even close to parody. And while they aren’t the only offenders, they’re only doing themselves a disservice. A 2018 study from Boston Consulting Group found companies with more diverse management teams had 19% higher revenue. So why aren’t more companies like these taking more drastic measures? It’s a question today’s guest is more than ready to tackle with us. Hilary Gosher is a managing director at Global Venture Capital and private equity firm Insight Partners. She leads the company’s due diligence and portfolio community and she also works as an adjunct associate professor at Columbia University. Hilary, welcome.
Hilary Gosher: (02:49)
Thanks Jean. Nice to be here.
Jean Chatzky: (02:51)
Thank you so much for coming into the studio with us today. Tell me a little bit more about Insight Partners and tell us about your role at that company today.
Hilary Gosher: (03:02)
Yeah, sure. So Insight Partners is, as you said, a global private equity venture firm and we can talk a little bit about what the difference in that is, but we primarily invest in software companies. And when I talk about software, for us that mostly means software that businesses use versus the software that you would use in your home on your, on your phone, the apps, the Amazon Alexas, the Netflixes of the world. That’s more consumer software, where we’re investing in the software that enterprises use to run their businesses.
Jean Chatzky: (03:29)
It is no secret that the number of women in venture capital is shockingly low and that the amount of venture capital that goes to female founded companies is also lagging severely behind. Why is that? I mean if you look at the landscape and how it’s emerged to be in the shape that it’s in, what has happened historically to put us here?
Hilary Gosher: (03:58)
There’s two reasons and we should start at both sides of it, sort of the supply and the demand. So the supply of women starting companies is bigger than ever. There are more women who are founding businesses and there are more women who are part of founding teams. But that again, bifurcates when you look at consumer businesses, consumer tech companies, versus enterprise tech companies.
Jean Chatzky: (04:16)
What’s the difference between a consumer tech company and an enterprise?
Hilary Gosher: (04:21)
Sure, so consumer tech companies, some of the ones that you may know about Stitch Fix founded by Katrina Lake or Zola or some of the ones that are much more consumer focused.
Jean Chatzky: (04:29)
I think some people think of Stitch Fix and they don’t even think of that as a tech company.
Hilary Gosher: (04:34)
Well, it’s a tech company because it uses technology in the background. And I guess that’s one of the questions to discuss today, which is every company’s becoming a software company. Software powers almost every part of every business. And so while Katrina has started a kind of consumer-focused business, it’s very much consumer tech in the background, e-commerce, matching buyers and sellers, matching people with clothing, recommendation engines. All of those kinds of components of technology. So there’s a lot more women doing consumer and fewer women doing enterprise technology. And that’s because a lot of the reasons I think that you just mentioned, in particular that fewer women start enterprise companies because they don’t come from a STEM background.
Jean Chatzky: (05:11)
So enterprise is what exactly.
Hilary Gosher: (05:15)
So enterprise software would be software that’s used by businesses. I’ll give you a few examples. So in education, schools would use software to manage their relief teachers, to manage student attendance, to manage student grading. Teachers in classrooms, we’ve invested in a company called Nearpod. And Nearpod helps teachers have greater interaction with students, all of it using iPads, different software, different interactivity to help the student learning experience. But that’s true across financial services where you know, cyber-security or know your customer software or collaboration software. All of this is used, I mean in your business you must use loads of different software. Slack is one of the big collaboration software companies that people are using these days.
Jean Chatzky: (05:54)
How did you get interested in technology?
Hilary Gosher: (05:57)
It’s as everybody’s story, I think everybody on your show has a circuitous reach to reach where they are. I grew up in South Africa and I first started working actually when Mandela first came to power with a consulting company that was US-based and we were doing the electronics industry, which is really in those days, semiconductors and you know, literally electronics. But of course a precursor to technology and it piqued my interest. So I went to business school in France and then from there moved to the U S and I’ve been at Insight since the early two thousands.
Jean Chatzky: (06:26)
What is it about tech that you think women shy away from? I mean if you had to sort of label the barriers that are holding us back from pursuing these things, what’s standing in our way and why is it so important that we break them down?
Hilary Gosher: (06:44)
Yeah. So I’ll start with the second part, why it’s important that we break them down. The reason being is that tech is a huge growth industry. If you look at the percentage of GDP and the fact that every business is becoming a tech business because so much of businesses run on software, I think it’s very important that women participate in the growth, in the future economic growth engine of our country. We don’t want women to be left behind. That being said, tech has always been this sort of black box of a word. I think back to when I was growing up, high tech, you kind of thought it was Telco, how boring. Semiconductors, ooh. Databases. ooh. The reality is tech is so much broader than that today. So when I think about technology, I think about the software that we use, but then there are people who need to market and sell it and position it and message it. There are people who need to sell it. There’s customer success agents who need to help companies or customers adopt the product and help them get the most value and the best return on their investment. There’s product managers and product management is such a fascinating position of a woman to enter into because it requires problem solving. And project management, things that women are excellent at. So I think that you know, while coding and being a developer or an engineer is a core component of building a product or technology company, software today spans such a broader spectrum and I think we need to open up the aperture of what it means to work in the tech industry.
Jean Chatzky: (08:03)
I know from personal experience that what you said about the job opportunities and the chance for growth is so true. My daughter-in-law, Shelby, actually just took a coding course. I mean she went and she did a boot camp. She was working at a nursery school. She hated it and she’s great with games and computers and she went, she took a bootcamp and she got a job. I hope I’m not speaking out of turn here. She got a job coming out of this six month bootcamp where she’s making close to six figures and she had multiple offers.
Hilary Gosher: (08:38)
Yeah. I think that you hit the nail on the head, which is that we as parents should encourage girls to learn to code. Not all girls are going to be great at it. Not all guys are great at it, but I think women in the past have not been encouraged to consider it an opportunity. And coding is fun. If you have logic, if you’re rational, if you can do, if then statements and understand kind of basic logic, you like maths, it’s a great career. There’s huge opportunities and you don’t just get to work in one industry. You know, as we discussed before, the idea that tech is sort of a single lump category is not true cause there’s tech that’s for education, tech that’s for oil and gas, tech that’s for finance, tech that’s for consumer. I think it spans everything, so there’s a huge rich amount of opportunities for women like your daughter-in-law.
Jean Chatzky: (09:25)
Let’s talk about the culture though of the tech industry. It often comes under fire for being part of this bro culture, which is one of the things that you said to me when we first spoke. There’s also this work ethic of coding until you collapse that I know you feel has to change. How do we find our place?
Hilary Gosher: (09:48)
Yeah, I think I heard on a prior podcast, one of the ones that you were talking about that, I think it was actually with Mika Brzezinski where she was like, everybody works hard when you’re younger. You have to earn your stripes. You have to earn it. I think that’s what she was talking about.
Jean Chatzky: (10:02)
That was the title of the book that she was talking about. Earn It!
Hilary Gosher: (10:04)
Exactly, and I think that the same is true for the software industry. Which is, when you first get going and you’re part of a company that needs to scale up, and so I should probably describe what that looks like. So a startup is a company potentially like the one that you were talking about that is trying to find product market fit. People are working all hours. There’s this energy. There’s this passion to try and find a market for this idea that you have.
Jean Chatzky: (10:27)
HerMoney is a startup.
Hilary Gosher: (10:28)
That’s right. Are you working huge hours? I’m sure. But that’s what it is. It’s how do we find the right audience? How do we deliver a product that’s relevant to that audience? And there’s a lot of experimentation. There’s a lot of hard work. There’s a lot of energy. Insight invests in the companies that are scaling up. So once you’ve graduated, in a sense out of startup phase, you’ve found the right audience and you need growth capital. That’s where Insight invests. And the scale up cultural lands up being very different than the startup culture. Because in the scale up phase, companies need to hire much more experienced managers. You need people who have seen what it’s like to build larger organizations, to run larger teams. You start to get into a different kind of skillset than a scale-up or startup.
Jean Chatzky: (11:08)
it’s so funny for those of our listeners who tuned into last week’s podcast, we had Erika Nardini, who’s the CEO of Barstool Sports and she described coming onto Barstool when they had 15 employees. They were a startup, but she’s now in the last two years grown that to 200 employees. So she’s taken it from startup to scale up.
Hilary Gosher: (11:32)
Exactly. And you know, each of them have very different characteristics and different capabilities required. And that’s where I think that women would be so fantastic in both. One because women are very creative, highly innovative, huge work ethic and able to bring balance and different kind of perspective to any startup. But two, as companies scale up, the thing that we noticed at Insight Partners that they really lack is good management skills. And I think this is where we get into the bro culture or the notion of a bro culture, because when you’re only working with people who are your buds, who you spend all night eating pizza with, it’s very difficult for an outsider to feel part of that. And you know, I know that being an only woman in an organization is exceptionally isolating. Being a minority in any environment is very isolating. And so what we’re seeing, and I think that’s going to lead to the evolution of more women in the industry, is that women are coming together and creating communities where they support one another in the industry. So last year, Insight ran our first women’s technology summit where we had 300 women from across the companies that we’ve invested in, leaders in their fields, whether that’s marketing or product or technology, come together to talk about what they can each do to both support more women in their businesses, but also what they can do to elevate their own careers.
Jean Chatzky: (12:49)
I’m sure that you came away from that with a whole bunch of information and a whole bunch of findings that would help women in any industry. Share a little bit about what you learned.
Hilary Gosher: (13:02)
The first thing that we learned is that there’s a difference between mentoring and sponsoring. And you may have talked about it on the show previously, but I think it’s very important for anybody to find themselves a mentor. And by that I mean someone who is potentially not in your business or maybe in your company, but who just is an impartial person to give you career advice. So you can take challenges and problems to. Ask them their opinion to make sure that your judgment is sound, especially in an industry that you may not know a lot about in an entry position. But you also need a sponsor. You need someone who’s going to actively advocate for you behind closed doors. And women are very good at sponsoring other women. I think men have been less so good at that, but we’re seeing more and more men being conscious of the fact that they need to do so.
Jean Chatzky: (13:46)
I’ve always thought it was a little awkward to, once you find somebody that you might like to be your mentor or your sponsor, do you just ask them. Do you just say, will you be my mentor? Will you be my sponsor? And how does that conversation go?
Hilary Gosher: (14:01)
Exactly like that, but I think that you need to qualify that with what the ask involves. So something very nebulous like would you be my mentor? I may not know exactly what kind of time commitment you’re talking about. If I say, you know, Jean, would you be my mentor? What I would appreciate from you is a telephone conversation once a month. I’ll bring to that conversation a series of topics that I’m struggling with and I’d appreciate your advice. Okay. Jean says fine because you understand what the contract is. It’s once a month I’m going to come to you with real conversations or real topics. You know, it might be twice a month. It might be once a month on the phone and every second month in person. But making that contract clear I think helps people commit to being a mentor versus feeling like, well this is going to be too much and I’ve already got a day job.
Jean Chatzky: (14:45)
I want to move on to talk about a nonprofit that you founded. It’s called Declare, how it works and how it’s helping women succeed. But before we do that, let me just remind everyone that HerMoney is brought to you by Fidelity Investments. You don’t have to know all the answers when it comes to your financial future, but an important question to ask yourself is, what do you want from your money? What are your financial goals? No matter where we’re meeting you on your financial journey, Fidelity’s here to help you reach those goals faster. It all starts with a financial checkup and an understanding of what you own and what you owe. From there, the folks at Fidelity will work with you to evaluate your investment options and different ways to grow your savings. You can discuss your goals, see where you stand, and get help taking the next steps at Fidelity.com/demandmore. I am back with Hilary Gosher, managing director at private equity and venture capital firm, Insight Partners. Let’s turn the conversation a bit and talk about this not-for-profit that you co-founded. It’s called Declare. Tell us about it, how it works and how it’s helping women.
Hilary Gosher: (15:57)
Yes. So it really is that about declaring women’s place or space in the workplace. So it’s a nice sort of declarative statements in a sense about the goals. There’s two components to it. The first is a leadership component, exactly what we were talking about earlier, where women feel the need not to be isolated. And so to have a peer group of people that can support them, that can give them leadership training and skills. So it’s around pods. The women meet in pods. I guess some people call them learning circles, et cetera. But when you meet in a pod, you create a commitment to other people in the industry. You learn from them, you find your next career opportunity. And the other thing is we want women to do business together. Women doing business together will help other women. So finding your next deal, doing a business partnership, creating some money opportunities or channel opportunities. These are great ways for women to network. My firm belief is that women don’t do enough networking because we’re so busy taking care of family and have lots of other responsibilities. Whereas networking is a key part of succeeding in business and in the tech industry.
Jean Chatzky: (16:56)
I think sometimes we are too busy just checking off the items on our list. When we have a to do list of things that we have to get accomplished at work, sometimes feeling that you’re going to take a step back to have lunch with somebody, to go to a networking meeting, feels like not working.
Hilary Gosher: (17:14)
Yeah. Yeah. It does feel a bit like, wow, there’s five things I need to be doing back in the office. Why am I having this lunch? And I think that, you know, we need to look beyond the bigger picture because men for years have had the old boys network and you know what we’re creating is a girls’ network. But we don’t want that to be exclusive because that would just replicate the sins of the past. What we want that to be as inclusive. So women having networking meetings with men, with people in other industries, that’s what Declare is about, is bringing people together, to make sure that there’s a support network, there’s a learning network and that women can do business together.
Jean Chatzky: (17:47)
How big a footprint does Declare have right now?
Hilary Gosher: (17:51)
So Declare has pods, these learning circles, in three major cities in the Bay area and San Francisco, the largest one’s in New York and then some in London. And we’ve really brought together two different types of women in their careers. The first is what we call founders and the second is funders. So the funders being the venture capital women. They are again working in a very male-orientated world. We can talk about the lack of diversity in venture capital or in private equity or in investing in general. And get them getting to know women who are in the industry that they tend to invest in. And then those women who are in the tech industry who are either building businesses, starting businesses. So connecting those two communities is very important for us. And London, New York and San Francisco, a huge hubs where those kinds of economics exist.
Jean Chatzky: (18:37)
For people outside the tech industry, how would you suggest finding a similar supportive network?
Hilary Gosher: (18:45)
There are lots that are emerging. I think this is the wonderful thing about the world that we’re living in right now is that whether you’re in the Me Too movement in media as you know, or you’re in every other industry, women are rising up. And almost every business has some kind of community or pod or networking or learning groups that if you do a search, you’d quite rapidly find areas where you can connect.
Jean Chatzky: (19:07)
I think you’re so right. I mean I’m just thinking that in the past couple of years I’ve been involved or given talks for an organization called Wiser, which is women in sports and entertainment. Actually I think they’re called Wise, not Wiser. There’s Women in Finance. I mean you’re right. You should just Google your field and find that. Or the places like The Wing and Luminary that have made co-working spaces into networking outposts.
Hilary Gosher: (19:37)
Yeah. I think The Wing is filling such a core need both for people who are working and building their own businesses by themselves, that they can meet with other people and it’s a wonderful collaboration space and a huge opportunity to do that, to do business with other people who you may not encounter normally.
Jean Chatzky: (19:53)
You brought it up, so I’m going to go back to it. We do have a lack of diversity and a lack of women in venture capital, in tech, in private equity, in finance in general. I know Fidelity, but also other financial services firms are so hot on the idea of recruiting women to be financial advisors because we’re great financial advisors. It’s all about the relationships and have a really, really difficult time. What has to happen for these things to change?
Hilary Gosher: (20:25)
I think first there’s an awareness. As you know, unless you recognize the problem, you’re never going to solve it and increasingly there is awareness. At Insight. We took a look at ourselves and we realized that five or six years ago when we looked at the incoming analyst class, it was eight to 10 people of which one or two were women. And the majority, 80 to 90% were all young guys. And so in order to change that, we’ve been very deliberate about couple of things. Firstly, we recruit from different schools and so we’ve widened the aperture. We’ve also made sure that we host fact finding days to educate women about what it means to be in the industry because many people think if you don’t have a finance background, you couldn’t apply to venture capital. And that’s not true. So just educating, encouraging more women to apply. And then we’ve got a much more rigorous recruiting process so that we always have a male and a female interviewing any candidate, whether that candidates male or female, so that we take away some of the bias in decision making and in the questions that are asked. So right now I’m pleased to say that our class from this past summer was 11 people, of which six were women and five were men.
Jean Chatzky: (21:28)
When you are recruiting, if it’s not necessarily the person with the finance background or the engineering degree that you’re looking for, who are you taking? I mean, what is it about an English major that might appeal to you?
Hilary Gosher: (21:41)
Well, English majors, science majors, history majors, it’s your ability to think and it’s your ability to problem solve and to take a complex challenge and to break it down into piece components and build it back up. It’s your ability to do research, so someone like an English majors had to write a thesis or dissertation, would be fabulous in our industry when it comes to due diligence, as we look at, you know, scale-ups to invest in, we’re saying, do they have a market? Who’s the buyer for the product? How much would people pay for this? How many people will pay for it? All of those questions, I think anybody with an inquisitive mind and a curiosity could answer.
Jean Chatzky: (22:15)
It’s just about taking the skills that you have and learning to apply them in the industry that you want to work in.
Hilary Gosher: (22:21)
That’s right. And recognizing that an industry like let’s say venture capital or an industry like tech is not exactly what those words mean and certainly not what they were 10 years ago.
Jean Chatzky: (22:32)
We’ve had a number of founders on this show and to a one, the female founders have talked about how difficult it was to raise to raise capital, Rent the Runway, The Muse. What do you think are the secrets to being able to raise enough capital to get your business going without, as Kathryn Minshew described to us, having to present 140 times.
Hilary Gosher: (23:02)
Yeah. There are so many stories like that. So the first is a pitch to women. So we do know that, and actually Harvard Business School did the study. They looked at a series of companies that were pitching both male and female founders and they found that the questions being asked to men were very open-minded and much more about promise or promotions. So you know, how large could this be? What are your aspirations? And the women, the questions being asked to women were what they called prevention questions, more risk averse. So when are you going to break even? How much money do you think you’ll burn? Very different slant on the same type of question. And so I think women being conscious of that, because we’re not going to change who you’re pitching to in the, in the short term, should turn those around. So when somebody says, when do you think you’ll break even? What you could say is, well, what you really mean, is what am I going to do with the capital that you’re thinking of investing in and what kind of milestones will I achieve with it? So answer the question that you want to answer, not the question that their bias is asking them to make.
Jean Chatzky: (24:01)
I’m smiling big right now because that’s the advice that I give anybody who’s ever going on television. Right. You know what you want to say, just say it no matter what they ask you.
Hilary Gosher: (24:12)
Yeah. Have your talking points and know them well.
Jean Chatzky: (24:15)
And stick to them.
Hilary Gosher: (24:16)
Yeah. Know them well for sure.
Jean Chatzky: (24:19)
For sure. Are there any other things that women founders need to keep in mind when they’re pitching?
Hilary Gosher: (24:24)
You know, I think that any founder pitching should recognize it’s hard. You are going to have to hustle, so building your networks beforehand as we talked about is very important. Stress testing or dry running your pitch with multiple different people, including women and men is very important. And just being very sure of your numbers. I think that that’s important for everybody. I’m sure the women that you talk to, were sure of all of those things and still had to hustle to get it done. And you know, that’s what we hope to change, certainly at Insight, by getting more women to be investors, by moving more women to be in those senior decision making roles, we’ll be able to make sure we take away the bias when it comes to funding women and minorities, not just women.
Jean Chatzky: (25:06)
I think that’s a very good place to wrap up this conversation. We work every day on getting more women to be investors, investors of our own money, not just investors in our 401ks but beyond our 401ks, because we know we have to put our money to work for us in order to secure our very, very long futures. How do you bring women along the investing curve?
Hilary Gosher: (25:35)
So I think there’s a couple of things emerging. In a scale-up business, there’s just so much opportunity for women and there’s so many opportunities for women to become leaders, whether that’s leaders in marketing, leaders in sales, leaders in customer success, et cetera. So, there is just huge opportunity and I think that women shouldn’t limit themselves by thinking, ooh, it’s take, ooh, it’s venture, ooh, it’s finance, but explore what those industries offer because they offer so much more than I think guidance counselors at school would have led us to believe. And the second thing is I think that women should not be afraid to ask. I think that, you know, more and more, I’m finding my own voice and the ability to be affirmative and state what you want. All anybody can do is say no. And I think that’s what a lot of founders have figured out is they’ll get 140 nos, but they only need one. Yes.
Jean Chatzky: (26:22)
Hilary Gosher thank you so much for coming in today.
Hilary Gosher: (26:25)
Thank you so much. It was a pleasure.
Jean Chatzky: (26:27)
HerMoney’s Kathryn Tuggle has joined me in the studio. So I have to say, this is second podcast that we are recording at a studio that is video enabled so people can watch us on YouTube as well as listening and I kind of feel, I mean for somebody who’s been on television for such a long time, these cameras are making me kind of nervous.
Kathryn Tuggle: (27:00)
I kind of like it.
Jean Chatzky: (27:01)
Kathryn Tuggle: (27:01)
I feel like I have incentive to repeat things less.
Jean Chatzky: (27:06)
Kathryn Tuggle: (27:07)
I’m just going for it.
Jean Chatzky: (27:09)
I have actually, I had trouble getting dressed today because of the cameras. Like usually we come in and we’re doing a podcast and I’m like, ugh, my hair, I don’t care. And I thought about, well how are these colors going to look on the camera?
Kathryn Tuggle: (27:25)
They look great.
Jean Chatzky: (27:25)
Well, it’s one of the things I love about podcasting. Like who the hell cares how you look?
Kathryn Tuggle: (27:30)
Jean Chatzky: (27:31)
But I’m excited for the folks on YouTube to be able to find us.
Kathryn Tuggle: (27:36)
I am too. I think there’s a lot of people for whom YouTube is just their go to spot for news and entertainment and video. So we’re here.
Jean Chatzky: (27:44)
We’re here, we’re trying our best. Hello. Thanks for that conversation. That was a good one.
Kathryn Tuggle: (27:49)
Yeah, she was great.
Jean Chatzky: (27:51)
I was astonished and I guess it’s just, it’s been a long time since I graduated from college and neither of my kids are in tech, but when my daughter-in-law, Shelby, went through this bootcamp, I mean literally she tripled her salary. She got multiple job offers. She is a rock star. But there are so few women going through these boot camps. There are so few women coders. I mean my fail safe has always been, if you want to be employable, be a nurse. I don’t think so anymore.
Kathryn Tuggle: (28:25)
I could not agree more and I know that there are some of these bootcamp programs where you don’t pay anything.
Jean Chatzky: (28:32)
Kathryn Tuggle: (28:33)
To go into them. And you sign a contract that you will basically pay them a set amount, whatever the fee is for the course, six thousand ten thousand, once you sign your first job offer. So they’re that confident in the job market for this.
Jean Chatzky: (28:49)
Kathryn Tuggle: (28:49)
Jean Chatzky: (28:50)
Yeah. She learned a language called Ruby on Rails, which I just think is hysterical.
Kathryn Tuggle: (28:55)
That sounds like a perfume, right? Or a band.
Jean Chatzky: (28:58)
Ruby on Rails, now appearing. No somewhere around the corner from us. Right?
Kathryn Tuggle: (29:03)
Jean Chatzky: (29:04)
This studio, we should tell people, this studio is all the way downtown. We’re on the lower East side around the corner from Tompkins Square Park. I feel like I walked here today and it was a little bit chilly, but I feel like when it warms up, I am just going to love exploring this neighborhood.
Kathryn Tuggle: (29:19)
I had the same thought. Well we did a little exploring when we first came here.
Jean Chatzky: (29:22)
Kathryn Tuggle: (29:22)
I showed Jean a secret bar in the back of a hot dog stand.
Jean Chatzky: (29:28)
A secret bar where you have to go into a telephone booth.
Kathryn Tuggle: (29:31)
You go into the phone booth. You pick up the phone and the back of it flips around and deposits you in a speakeasy.
Jean Chatzky: (29:36)
And it was closed. But I am so going back there.
Kathryn Tuggle: (29:38)
We’re going back.
Jean Chatzky: (29:39)
Yeah, no question. We have to record late enough in the day that it’ll be open.
Kathryn Tuggle: (29:43)
Jean Chatzky: (29:44)
All right. What do we have?
Kathryn Tuggle: (29:46)
Our first note comes to us from Leah. She writes, hi HerMoney team. I love listening to the show. I feel like educating myself has helped me to feel more empowered to take control of my money. I have a 401k from my previous employer with about $20,000 in it. I left that employer about two years ago to go back to grad school full time and stopped making contributions. Now that I’m out of grad school, I’m 28, self-employed and ready to make contributions to my retirement again. I’m not sure what to do. Can enroll my 401k into a Roth IRA? If so, what are the tax implications of that? What about a SEP IRA or should I just let the 401k grow as is and open a separate IRA without rolling that $20,000 over? It just seems silly to let it sit when I could be adding to that number and letting interest compound. Any insights you have would be so helpful.
Jean Chatzky: (30:34)
So it’s a great question. To answer your questions directly, when you roll a 401k into any sort of an IRA, you actually have to roll it into just a plain vanilla IRA first and then if you want to convert that IRA into a Roth, you have to pay taxes. So a plain vanilla IRA, a traditional IRA, is an account where you put money that you have not paid taxes on. You put the money into that account on pre-tax deductions. That’s how money goes into a 401k. It’s how money goes into a traditional IRA. You can move from like to like. So a regular 401k to a traditional IRA. If at that point you want to convert that IRA to a Roth IRA, then you’re taxed as income on the money that you’re converting. And if you don’t have the money to pay for the conversion outside the IRA, I wouldn’t recommend doing it. I would just start another Roth IRA if that’s how you think that you want to save for the future. Leaving the money in that 401k as long as you like the investment options and the fees that you’re being charged are not outrageous, is a fine thing to do. The benefit of moving it to the place where you’re going to be making contributions going forward, is that administratively it’s just easier. You can sign onto one account, you can see it all, you can make sure it’s all in balance and and you can go forward from there. But really it’s okay to do either one.
Kathryn Tuggle: (32:17)
It’s good to keep in mind that it is still growing that interest. It’s not going to stop.
Jean Chatzky: (32:21)
Well, it should be. The risk, and I hope that this is not the case, but the risk is that it was sitting in a money market account in a 401k where it would not have gained in the markets over the past couple of years. But my guess, because these days so many 401ks automatically deposit you in a target date fund or a balanced fund if you make no other selections, is that she’s made some decent money.
Kathryn Tuggle: (32:45)
Yeah. Our next question comes to us from Karen in Glenmoore, Pennsylvania. She asks, hello Jean and the HerMoney team. I love the podcast and I listen and learn every week, so thank you. I have a question regarding estate planning. I’ve been with my partner for 20 plus years. We’re not married and have no children. He has a will from serving in the military in his twenties before we met, that leaves everything to his brother and we’ve done nothing to update this will. I do not have a will. Our collective net worth is about 1.5 million. We jointly own a home worth about 500,000 on which we owe 200,000 but have no other debt. Our collective household income with both of us working full time is around $200,000. We are each other’s beneficiaries on individually held accounts and company-provided life insurance. How do we begin the process of estate planning? What are the key must have items that we should have in place? Specifically, I’m concerned about the status of his old will and what impact that would have on me financially, should something happened to him before me, how we would be affected if one of us were to fall ill and need long-term care, and how to ensure that we can provide healthcare directives for one another since we’re not married. He’s 67 and I’m 63. We’re both in good health and plan on continuing to work for the next five years. Thanks again for all that you do.
Jean Chatzky: (34:01)
So listening to this question and reading this question, you absolutely have to go see an estate planning attorney and you absolutely have to do it today, Karen. Now, I am not sure of the law in Pennsylvania. It is possible that you are common law married, but it is also possible that you are not. And you should not take my word on that because again, I am not a lawyer. But the fact that this will exists, leaving everything to his brother, could mean that you would get nothing from his half of the estate. The whole scenario also rests on who owns what, right? You said that the home is worth about a half a million dollars, but that leaves a million dollars and I’m not sure whose assets are whose. It sounds to me that what you want is actually a very straightforward estate plan, which is the good news. And for that to work, you’ll need three, maybe four pieces of paper. You’ll need a will and you’ll want to make decisions about the fact that everything of his will go to you, if that’s how you want it. Everything of yours will go to him, if that’s how you want it. Or if you want to leave them to other people or other organizations, that’s what a will does. You’ll want healthcare proxies which allow you to make healthcare decisions for each other in grave situations. And these are even more important because you’re not married. You’ll want durable powers of attorney for finance, so that each of you can make financial decisions for the other if you’re unable to do so for yourselves. And you’ll want living wills, which are documents that instruct doctors or hospitals, whether you want life support or other life saving measures, should it actually come to that. The last piece which you may or may not want to put in place are some sort of trusts. If you want to make sure that after the second of you dies, the assets that previously belonged to the first spouse to die, then pass along to that person’s other heirs. So if for example, your partner wants to provide for his brother but wants to make sure that first and foremost you have everything you need, it can be structured in such a way that with some trusts in place, you could use the income that was provided and then anything that was left over would pass to his brother.
Kathryn Tuggle: (36:54)
Jean Chatzky: (36:54)
It sounds complicated. It’s not really all that complicated. What I’ve described is a very basic estate plan. You should be able to get this taken care of inside of a couple of weeks. Because it actually sounds like you’ve already done the hard work, which is deciding what you want to happen to your assets. But make no bones about it. I am very concerned about you sitting in this situation for even one day more because I would not want to see something happen to him and for you to be left out in the cold financially. And I’m worried that that’s exactly what you’ve set yourself up for.
Kathryn Tuggle: (37:39)
Yeah, I’m really glad she wrote in cause she needs to skidaddle to the attorney’s office.
Jean Chatzky: (37:44)
You know, it’s something that we hear all the time. Usually we hear it from younger couples who have just not gotten around to setting up a will. And at that point, if you’re married, the government does provide that, if you don’t have a will, everything will pass to the surviving spouse. But in cases like these, where you’ve been devoted partners for 20 years without a legal piece of paper, it is really tenuous.
Kathryn Tuggle: (38:15)
Yup. Definitely. But like you said, it’ll be a quick one.
Jean Chatzky: (38:20)
It’ll be quick. It’ll be easy. If you’re in Philadelphia, Karen, and you don’t know who to go to, just drop me a note and I’ll give you the name of my estate planning attorney.
Kathryn Tuggle: (38:29)
Amazing. Our last question comes to us from an anonymous listener. She writes hi Jean, long time listener, first time writer. Thank you for all you do for empowering women with our money. Like many listeners, I’m a freelance business owner. I work as a court reporter and I make approximately $90,000 a year. I have no benefits such as health insurance or a retirement fund. However, I do max out a Roth IRA each year and I love the flexibility and autonomy my job gives me. I was offered a government job in my same field that would come with a comparable salary and solid benefits, including a pension. I’m torn as I love my business and the freedom it provides me, but I would love to have the stability of insurance and a pension. Financially, what do you think is the best option? Thanks again and go Syracuse.
Jean Chatzky: (39:16)
Go Cuse. I think it depends on what you need, right? This really gets to the question of what’s enough. You know, what is enough in terms of your financial needs, but what’s also enough in terms of the life that you want to live. I mean clearly you are incredibly happy being your own boss, working for yourself, running your own show, and the answer might be that you are doing just fine. I can’t tell from the information that you gave me whether you are on track to provide for your own financial future. And so that’s really the question that you want to answer. This 90,000 a year, you fully fund a Roth IRA. That’s great, but it’s not getting you to this threshold of saving 15% of your income that we usually talk about when we are looking to ensure that you’re putting away enough money to last as long as you do. And so my suggestion would be, sit down either with a financial advisor or retirement calculator, run the numbers and see if what you’re saving is likely to provide you with enough of your income once you stop working in order to replace the lifestyle that you have now. Are you paying off a mortgage? Are you in an area of the country where you will be able to continue to live the life that you want? If the answer’s no and you still want to maintain your own business and your own autonomy, then you have some choices to make. You can save a little more. You can downshift what you’re spending now and you can pump a little bit more into saving in order to fund your own future. If the answer is no and you don’t want to downshift, well then you know that looking at that government job that will provide these other benefits, the pension, the healthcare that you won’t have to pay for out of pocket is something that you might want to consider. And so that’s how I would make this decision. I would look right at the numbers, get some help if you need it and figure out if you can keep going like you’re going now and give yourself all the things that are clearly so important to you, including that autonomy. I mean, I don’t know about you Kathryn, but I know so many people who would not be happy working for somebody else. Right? I’m not one of them. Like I have had jobs where I’ve had employers. I’ve been very happy with that. But I do know a lot of people for whom autonomy is the thing that really makes them happy and that is really hard to give up.
Kathryn Tuggle: (42:13)
Yup. And I also think she should dig into autonomy versus freedom, because if in this government job she would have the ability to build her own flexible schedule, then maybe she’ll still feel like she has that.
Jean Chatzky: (42:25)
That is a really, really good point.
Kathryn Tuggle: (42:27)
Jean Chatzky: (42:28)
Yeah. And more and more these days we’re hearing of jobs that come with that sort of freedom.
Kathryn Tuggle: (42:32)
Absolutely. Yeah. And to what extent should she dig into the pension? Because I know some of them have cost of living adjustments. Some of them you have to work for five years before it’s vested. So how much homework should she do there?
Jean Chatzky: (42:46)
I think as much as possible. Right? You want to know is this going to replace the value of the Roth IRA contribution that you’re already making on your own? Is it going to be additive to that? Is there just a pension or is there a pension and a 401k or other similar retirement plan that you’ll contribute to? All good questions.
Kathryn Tuggle: (43:08)
Jean Chatzky: (43:09)
Thank you. And if you would like to send us a letter, you can do that.
Kathryn Tuggle: (43:13)
Jean Chatzky: (43:15)
We’re looking for them. Thanks so much. In today’s Thrive segment, if you’ve already got spring cleaning on the brain, how about a spring financial checkup? If raising your credit score has been on your to do list for awhile, there is no time like the present. Start by heading to any of the free online resources that’ll give you an estimate of your score based on all the lines of credit that you have opened like Credit Karma, for example. Check out your score, see where you could improve. If your score has taken a mystery dip, take a look at your credit report to see what’s negatively impacting that number. It might even be fraudulent activity which can be weeded out by looking through your report and taking action. After that, as if you haven’t heard it enough already, the single most important thing that you can do to raise your credit score is to pay your credit card balances on time. If this is easier said than done for you, just set up automated payments on your accounts so that you never fall behind. And just note, there are some changes coming to the FICO formulas this summer. FICO, for those of you who aren’t familiar, is the most used credit score. There’s also a score called the vantage score. And when we look at the differences in this new FICO formula, the big thing that we’re seeing is that your history will play more of a role than it hasn’t, which means the sooner you clean up your financial act, credit-wise, the better off you’re going to be, particularly if you know that you’re going to be applying for a big loan like a mortgage or a car loan in the near future. Remember, you also want to spend only about 30% at most of the credit that you have available to you to keep your score as high as possible. If you’re getting too close to that figure, your score will be negatively impacted. And keep a lid on how often you apply for credit – reserving those instances for when you really, really need it. Just remember, turning around your credit score will not happen overnight, but it will happen, as long as you practice the sort of good credit habits that we’ve been talking about. Thanks so much for joining me today on HerMoney. Thank you to Hilary Gosher for coming in to chat with us about how we can all work together to change the perception and the reality that technology is a boys club, and to get more women interested in pursuing their tech dreams. If you like what you hear, please subscribe to our show at Apple Podcasts. Leave us a review. We love hearing what you think. We also want to thank our sponsor Fidelity. Today we recorded this podcast out of NYC Podcasting Studios. Our music is provided by Video Helper and our show comes to you through PRX. Tune in next week. We’ll be back with another great HerMoney guest. Thanks so much for listening and we’ll talk soon.