Did you catch the now-viral tweet from Nina Strohminger, a legal studies and business law professor at Wharton Business School? She asked her class what they thought the average American salary was, and a quarter of them said it was over six figures, and one even said it was $800,000 a year. Her tweet has now been liked more than 220,000 times, and in a follow-up, she wrote: “A lot of people want to conclude that this says something special about Wharton students — I’m not sure it does. People are notoriously bad at making this kind of estimate, thinking the gap between rich and poor is smaller than it is.” (For those of you wondering, the average annual wage in the U.S. for 2021 was actually $53,000.)
But of course the great disparity between the rich and poor — or even the disparity between rich and the middle class — in this country is nothing new. Neither is the lack of understanding of just how vast that gulf really is, and all the ways it manifests itself. When you earn less, you invest less. With less earnings, you’re less likely to be able to afford an education, buy a home, or have an emergency fund that can help you make it through tough times without taking on debt.
And for so many years — for decades — if you weren’t a high earner, if you weren’t a male high earner, then the stock market, the world of wealth management, and so many other aspects of finance — were pretty much closed to you. We’re so incredibly thankful that this has changed, and that these worlds are now more accessible to all, but there is still a long way to go.
This week we’re thrilled to sit down for a conversation with one of the amazing women leading the charge to bridge the gaps and bring finance to the people — Paco de Leon is an author, illustrator, musician and the founder of “The Hell Yeah Group,” a financial firm dedicated to inspiring creatives to engage with their personal and business finances. She is also a well-known TED speaker, and she lives in Los Angeles with her wife.
Listen in as Paco discusses her new book, Finance for the People: Getting a Grip on Your Finances — which also includes her own illustrations — and answers the question: Why does so much financial advice only apply to the wealthy few? She talks about her inspiration to truly give power back to the people, who perhaps didn’t have any financial education. (She writes: “In a society where money is power, the rest of us need tools for taking control— not only of what’s filling our wallets, but what’s filling our minds.”)
Also, if you’re an artist or creator, you’ll want to pay special attention to this episode — Paco breaks down some of the struggles faced by gig and 1099 workers, and how they can save for the future even without some of the traditional hallmarks of a financial plan, like a 401(k). We also talk about how we can “get to the root of why we feel weird about money.” Paco talks about personal beliefs and emotional patterns that may be holding us back, and some of the methods we can use to move past those.
We also talk about her favorite method for budgeting, how people can address competing financial priorities, and the different guidelines for saving that different earners should be following.
In Mailbag, we talk about saving in an IRA if you’re unemployed, and finding a fiduciary when you’re already very financially savvy. And in Thrive, the morning routines of some successful CEOs.
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