Bill Kelly (4:31)

We talk about street cred in so many things in life and you certainly have it. And I don't want to do short shift to your career progression. You mentioned computer science and I think in the book I read you a bit of a science nerd thanks to your dad earlier in your career. And, and I'm just curious, did you start out in computer science or did you go right to financial services? And I know you've made a few stops along the way before your current station.

Monique Frederick (4:55)

Actually, my first job was in computer science. It was programming and it was right before. I'm going to give away my age a little bit, but it's around 2000 when everybody was focused on that crisis that was about to happen. So I did start out in computer information systems and then when I did my master's, which was an MBA with a concentration in finance, that's when I shifted. I'd always enjoyed finance. I mean, my dad always talked about it at home, but I started out in information systems. And then I really fell in love with the person that taught me it was Derivatives Futures, which was a woman actually in the master's program. And that's when I decided, okay, no, this is definitely where I would like to focus on. And so I had a career shift and actually started out while I was doing the masters in venture capitalism, which is kind of interesting, so to start out there. But that's really how it happened. But both of them, both the computer information systems degree has been quite helpful in my career and especially since those two, I guess, industries have started to.

Bill Kelly (6:18)

Merge at a very rapid pace. I'll add too, with ChatGPT and generative AI and all these tools that it's a bit of the camel's nose in the tent. But unless you're embracing both, I think you're going to get crushed. So the book is entitled Embracing youg Money Power A Woman's Guide to Financial Freedom. And as I said to you before the lights came on, it's a pretty easy read. I was able to start it last evening and finish it this morning. It's not terribly complicated, but I did learn a few things myself because there are some perspectives you don't really think about. One big takeaway for me was I grew up in a very traditional middle class family, one of seven. My dad worked, my mom didn't. There were four boys and three girls in that family. And I look at that generation, I think they did so many things right and I look at their generation versus the helicopter parenting of this generation. We can't help smartphones and social media, but I just think that our parents just had a different fabric and approach to raising children. But it doesn't mean it was perfect. And I think you both directly and indirectly talk about generational biases. And I think that was a generation where the family unit was built on the dad earning the money and the mom raising the kids. And rarely were financial considerations talked about with the children, much less with the spouses. And the thought of my dad and my mom having separate checking accounts, that just seems to be a wild thought that wouldn't even enter my mindset back then and maybe even now with my wife Liz, who is a professional herself, she's a physician. So I think norms have changed. But if you think about maybe some of the biases in our industry, financial services, and you point out, some progress has been made, albeit slowly, and we still have a lot more ground to cover. I wonder if some of those biases are entrenched in people like myself that grew up in a very different generation that were raised very, very differently and we really have to take some of those lessons away and do some self reflection to say maybe I'm part of the problem. I'd have to change maybe some of these attitudes and thought processes and norms that I knew when I was maybe 3 years old, up until 15 when I maybe left the house. But they do stick with you. So Breaking some of these norms, difficult. But the first step is maybe recognizing what these limitations might mean for this next generation.

Monique Frederick (8:44)

You hit the nail on the head. A lot of our thoughts, our beliefs, and the way we operate is very much based on how we grew up. And our parents did the best they could based on what was happening at that particular point in time. And they were also influenced what they experienced when they grew up. So it's trying to recognize what the impacts are of what we experience growing up. And then when I look at it so in my household, my dad, and even though this is not the same in many others, from what I understand, I had the two girls, so myself, my younger sister, I mean, I had an older brother, but he was already left for university. So really it was the two of us @ home. And there was no discussion about what men were expected to do or boys were expected to do. Those things never came up. It was always about, you need to be able to take care of yourself. And that's how we were raised. So a lot of those types of conversations, I didn't realize until later on in life as an adult and going into the workplace that the situation I was in was relatively unique, but it never crossed my mind. But it then also shows to me that if that's the case and these were things that were discussed, then we have the opportunity to do that with this generation. Because if you do have those discussions, it's not considered foreign at all. You don't even think about it. But when we make decisions and we're trying to think of how do we approach money in general, I strongly believe that a lot of it has to do with what you experienced growing up, because even between partners, you come from two different families. And what you experienced and what your spouse may have experienced could be very different. Even in the same generation, it could still be different. And so the way you look at it and the way you approach money and investments will also be different. So it's almost more of a deeper question, and that's where I'm trying to focus, that a lot of our decisions is not just about numbers. It's very much emotional. When we make decisions about money, the numbers is just only one small part of the equation. And those of us in the financial services industry, obviously, yes, we spend a lot of time on the numbers, but there is quite intense emotional piece that goes with that in terms of how people make decisions about money.

Bill Kelly (11:37)

We're both parents now. Your twins are 14, and my youngest is 20 of my 5. They go up to 34. So we at different phases with kids. But I think back on the formative years of elementary school, high school, and college, and there's always a certain responsibility of the parent. And you talked about in the book even algebra. Algebra is algebra. But how it was taught then and now are two different things. And we as parents have to sort of figure that out ourselves, too, because we want to be a partner in that education. But to some degree, and I think we're right in doing this, we cede that responsibility to the classroom to teach history, to teach math, to teach gymnastics, et cetera, et cetera. And I think academics are a big plus. And I'm not here to diss them at all, but they also, we have to recognize there are holes in that value proposition. And again, what occurred to me in reading this book is I equated financial literacy and how that's taught in the school system to languages. And I took French sporadically in elementary school and four years in high school, and I could maybe get a clue in the New York Times crossword puzzle or fake my way through ordering something on a menu. But so much of the French I learned in high school was the proper French and how to conjugate verbs and masculine versus feminine tense. And as I sit back, I'm saying that stuff was useless and that they could talk to me about how to order a hot dog or a beer at a basketball game, then I would have gotten more into it. And I think when it comes to financial literacy, we teach financial concepts, but the power of. Of just the compounding interest which you talk about is an enormously powerful tool. Yet I think some of these basics we don't cover. So where is the responsibility of the academic institutions? And have they let us down or has society let us down? Is there more that we can do to make sure that when these young kids graduate as functioning adults from college, they have some level of financial literacy? And if it's the congruent example I used with Romance languages, I think we failed.

Monique Frederick (13:51)

Well, your example of friends actually resonates quite well with me because I took French as well in high school. Trying to remember it all at this stage is a bit more difficult. But in terms of education or financial literacy, I think everyone is aware that there is certainly a gap from an education standpoint. Now, it seems to be a lot harder to change that, because education a lot of times is not necessarily just set by the institution, or it could be national or it could be federal. I mean, it can get very complicated. But I do think There's a need for it. Once in a while I will see some information where it says that, okay, there's this particular school that is starting to incorporate it within the curriculum and maybe some of the private ones are as well. But it is key, and I do think that as a society we have failed in that regard. We try to make it up whichever way we can. So I think it is partially up to those of us that are also in the industry. And I know obviously you're very focused on it from the alternative space and there are many organizations that are, whether they're non for profit that are trying to help in this regard and whether it's mentorships and going into the schools, there are many of those. But I think it is important. It is extremely important because, yes, you can start looking at it when you get to an adult level, but it would really be a lot better if it's addressed in the younger years because you need to start making those types of decisions. And timing as we talk about compound interest. Time is important, so the earlier you can start, the better. So why wait until individuals have become adults in the workforce if they don't even understand some of that information? And some of it is taught in the schools, but some of it is not very focused. It's more like algebra. So you know how to calculate something, but how do you put it into practice? And I know there are many people and organizations out there that are focusing on that and I'm just hoping that we can have this change happen more rapidly.

Bill Kelly (16:20)

Yeah, I agree. And I think there are going to be listeners and readers of your book that are across the continuum. You could have somebody who's just a very young woman or man in their maybe late single digits, 12, 13 years old, that this could be impactful to them for the course of their career and they learn to maybe open up a Robinhood account and put some money aside and continue to build wealth at a very early stage. And I think that's an awesome entree into being a responsible adult. But then there may be women that are going through a divorce or a widow and further on in their career or having thought about saving in the first place. And they say, okay, Monique, you've impacted me. Where do I start? And I think the very simple answer is get smarter, get educated. And if you have a source, you can certainly quote that. But I think like any life crisis, that if you're facing a diagnosis for a disease, the very first thing you do is ask ChatGPT or you Google it and Say, okay, I'm not going to believe everything I read, but let me get just a few different inputs so I can at least have a bit more informed consent. And you don't have to be as smart as the person, the surgeon doing your surgery or the person managing your money, but you have to be smart enough to ask that first question and ask that follow up question. So is there a source that you would think of as a go to source or is it just start to do some homework, get a little bit smarter and then once you know where you are in the continuum, maybe it's the Economist, maybe it's the Wall Street Journal, maybe there's another basic publication you can use to get your quotient up.

Monique Frederick (17:52)

Yeah, I mean, I think there's so much information these days on the Internet in terms of the basics. It could be something as simple as Investopedia that everybody has access to. What I try to do as well within the book is give people an idea as to start looking for these particular things. You've mentioned opening some of these trading accounts. You just need enough basic information. You don't need to have a PhD, you don't need to be an economist to start investing. And it depends because obviously we all have different personalities. But if you're the personality type where you are very detailed and you want to make sure you have everything covered before you jump in, and I can attest to that because I'm one of those individuals where I'm looking at everything first before I make that move. It's also creating some level of trust because we can easily talk ourselves out of doing anything, especially if we want to be perfect. And so if you're going to wait for the day that you fully understand financials and the economy, that day will never come. Because even those of us that are professionals, there's something new every day. So it's really trying to take that first step and getting the general information that's online. And then when you are ready, once you've looked at that, then you go to a trusted advisor. That's when you go and you seek the advice that you need to guide you through the process. But you want to at least have understand a little bit. You want to know what particular assets exist, you want to understand a little bit of budgeting, you want to understand compound interest or have somebody explain it to you. If you don't.

Bill Kelly (19:54)

So somebody of your many accomplishments and credentials and degrees, Monique, and what you've done in this industry, do you have an advisor yourself or do you know Enough that you can manage your financial future on your own.

Monique Frederick (20:08)

So for me personally, I can manage it on my own. Of course, when you're investing in certain products, whether it's funds, let's say, or alternatives, you may make that decision. But that doesn't mean I'm doing the underlying investment for that fund. You can be an expert at every single asset or be involved in the management of that. But even for me personally, one thing that I've learned that if you're a professional, whatever industry you're in, whether you're a lawyer or, let's say you're a doctor, what you tend to find is that the profession that you're in is the one thing that you usually do last for yourself, because you're so focused on doing that for, whether it's your clients, your patients. So you tend to leave that last. If somebody's in technology, when you go home, typically, like, okay, they don't want to hear anything else about technology. They want to relax. So it's more. Sometimes you need the motivation from others to remind you to look after yourself. And so it's more from that standpoint, not so much that I cannot manage it for myself or make those decisions, but it's more, you also need to take care of yourself and actually make those decisions for yourself, because you tend to be focused on your clients or your patients. So that's where I seek the advice. It's not so much the investment decisions itself, but it's more the accountability and the goals and to make sure that you do the things that you want to do and make some time for that.

Bill Kelly (21:59)

So I want to come back to selecting an advisor in a moment. But maybe an interesting door that you just unknowingly opened is managing the family finances. And my two older kids are married, and my youngest, my only daughter, not my youngest, but my only daughter, is close to being engaged, but living with her significant other. And my two sons and their spouses, Abby and her significant other, they manage two checking accounts. And when a bill comes in, one will pay and the other person will Venmo. And that is just so foreign to me. When Liz and I got married, said she's a physician, but our assets were commingled. And I'll get back to the advisor in a moment, but for good, bad, or in different reasons. There might have been a period of time where Liz paid the bills, but for many, many years, it's all been my job, the financial side, and I don't think that's great, but I'll Come back to that in a moment. But the first question is maybe there's no right or wrong answer. Monique, but what is your advice to young couples starting out today? Where should they look to main at least some level of two separate financial worlds and maybe the co mingling is around common goals, around retirement, around buying a house or educating a child that might be on the way. So what are your views? And maybe there's no right or wrong answer. But that approach generationally for me is so foreign.

Monique Frederick (23:15)

I fully understand what you mean because I have come across that where I see partners have individual accounts, I've seen joint or joint and individual where you know, depending on the goals and there is no right or wrong answer. I think it's more a question of as partners having that discussion as to how you would like to do this going forward. What works for the two of you? Because similar to when it comes to investments, I've seen that as well where because you may have different views, different thoughts and even personally your risk profile and what you're willing to do may be different. So some of the suggestions there have been is that you come up with the goal that you're working on together and whether you have a particular account or investment vehicle for that or portfolio for that and then you have maybe a different account where if one person wants to have what I sometimes call play money, where it's a bit more risk and it's a trading account and you want to do something a bit more active that maybe is not necessarily as important for a large long term goal, then you put that aside and that's maybe in a different account. Because I know sometimes we talk about when you're looking at investments, you look at everything. Technically you would look at the overall holistic view of your financials, but there are reasons. For some people, visually it makes more sense that they have investment account or portfolio that's tied to a specific goal. So I don't think there is necessarily a right or wrong answer. It's more having the discussion with your partner and then deciding how you want to do that going forward or having multiple accounts, it's whatever works for you as long as you've discussed it.

Bill Kelly (25:25)

I agree with that. But I think where there is a wrong answer and this is moving towards selecting an advisor and I'll use my household and me as an example that I forget when we hired a financial advisor specifically, but Liz had stopped or maybe wound down her medical practice because of a result of our five kids and I've got a son with Special needs that complicated the mix. Again, maybe expecting the unexpected, because that brought in a whole new set of family and financial challenges that we've dealt with over the years. So Liz stopped, and I'm working full time. And through the course of our industry, you're always bumping into somebody that, you know, trust. And I bring in the financial advisor. And as I think back, there was no sitting over the dinner table with Liz to say, what do you think about this person? Good, bad or indifferent? I just did it because it seemed to be my responsibility. And it worked out okay. More than okay, it worked out very, very well. But over the years, Liz probably didn't know, maybe knew the person's name because when he did something right, I would say how wonderful he was, and when he didn't, I would use maybe more colorful language, but Liz would not know. His cell phone, his email, nothing. And it occurred to me over the years, both for Liz and the financial advisor, particularly financial advisor, maybe I put it more politely, but I said, you are a fool to come and meet with me and not suggest, demand that Liz is not there too, because this is a family balance sheet, even though it's my responsibility and relationships and partnerships, things do have to be delegated. And Liz, trust me with this, but you point out, and statistics show us this, the likelihood that Liz is going to outlive me, statistically, the numbers are not her side, not mine. And then you also point out, I think, as a Barclay study, that women and men are very different. One of the studies they found is that they're risk seekers as well, but they're more patient investors, not looking to churn the account on a regular basis. I think Barclays, you could tell me the timeframe, but I think it was 180 basis points better than their male counterparts. So it's not even a question whether or not list can add value. But if I disappear from the scene one day and she's saying, I think the guy's name was Tim, but I'm not even sure. And Bill never told me his email address. And then she finally meets him and says, how could Bill have even dealt with this guy? He doesn't look like me, he doesn't act like me, and I'm moving on. I've seen other studies, Monique, and I can't quote them specifically, but the percentage of women that fire the advisor after divorce or death is a very, very high number. I think it's north of 50%. So there's a couple of things in there that I'll turn into a question. One is maybe your views on that scenario. But then also, if I decide to go out and hire an advisor today for the first time, there are many people that look like me that I can relate to. For a woman, much less. So it's not so much a woman wants to have a woman, a man wants to have a man. You have to have somebody you feel you can work with, that you can trust, and also somebody that understands the shift shoes that you're walking in. And if they don't, you're not going to get the right advice, you're not going to get the right partnership, et cetera, et cetera. So I think there's a question in there, but I'm going to pause and get your observations.

Monique Frederick (28:33)

Yeah, no, no, I think those are very good observations because ideally, as an investment advisor, you do want to have the conversation with both parties in the room. And while that might not necessarily happen all the time, you definitely want the spouse to be included. And sometimes you might be quite surprised, sometimes you may not expect. So let me give an example where maybe it's the husband that's coming in to the meetings most of the time. And then when a decision needs to be made, I know of scenarios where like, well, it's actually my wife that's going to make this decision, so I need to bring her into the meeting. I'm like, okay, yes, you probably should. And that's where you get to understand that sometimes it's a case of just not being comfortable, where the woman might not be comfortable to give her opinion in the meeting, but she's actually the one making the decision. So it is important to have both parties there, even if they don't necessarily have a lot of input, but at least they are aware of the decisions being made and having their way. And then sometimes it won't be till you get back home that they then have the conversation. Say, but why did we make that decision? Or what exactly were you thinking here? Because women is the sick that we have to deal with. They outlive their men. You end up with those situations where they don't know what all the assets were, or they may not know how the decisions were made. And I think that's very important. So I think in terms of when you're choosing advisors, these are things to look out for, because it is having to connect with someone that understands your thought process. Not to say that it has to be men to man or woman to woman. It is really just a case of are you seeing both individuals and are you understanding where they're coming from and what their thought process is. Because as I said earlier in our conversation, a lot of times it has to do with how they grew up and how they see the world. Sometimes it has nothing to do with gender, it's just how they grew up. So you have to get an understanding of that to see how they view the world in order for you to be able to guide them through that financial journey over time.

Bill Kelly (31:11)

And as we said earlier, we all suffer from biases. And to a large degree, the earliest biases we have were learned from our parents in those formative years. And not to say we can't change them, but recognizing the limitations of those being comfortable talking about it and being able and willing to listen to the inputs of your spouse who maybe have had a very different growing up. I think that's a very important point. Point. And I think also in listening to you, Monique, if I think about the financial balance sheet, assets that are in liquid or illiquid securities, and maybe I'll throw the house and real estate in there as well, that is not the entire financial picture. On top of that, you have hopes, goals and dreams that are unfunded. You have liabilities on the other side of the balance sheet. So there are all sorts of moving parts here that have got to come into the mix and part of the understanding and again, that can't be left aside as well. So I think if it's just a narrow look at the financials and you did touch upon, I think you mentioned disability insurance and it's much more likely that any one of us will suffer a disability early in our lives versus early death. Those are just the facts. But then also life insurance and even planning around wills. And I've seen situations, and I'm aware of one recently where one of the members of a young couple died and the deceased forgot to change the beneficiary on the 401k plan. So I think there's always inputs and making sure that you look at the holistic financial picture. And there are some things you can plan around disability, around death, making sure your estate is in order, make sure your will has a pretty reasonable passing of your assets and your intentions are known ahead of time. And these are all hard things to talk about. And again, generationally, my parents never talked about that. I think I learned about my dad's will for the very first time, maybe six months before he died at the edge of 92. And is that productive? No. But that's how that generation rolled. And I think we need to learn some lessons from that as well. So again, I just want to get your confirmation and you may have a deeper view about the totality of the financial picture and thinking beyond just the assets on a balance sheet.

Monique Frederick (33:22)

You're right. I mean, it's not just that and you've covered it. It's the insurance picture, it's the estate planning, the wills, and yes, there are lots of other goals. But in totality you want to look at all the decisions that we make and what is the impact as well for those that you leave behind. They're not easy conversations to have. And especially when you're younger, nobody wants to think about those things. And then even when you are older, people still don't really want to talk about it because they don't want to think about that. So it's trying to get people comfortable to think about, okay, you're doing this primarily for your loved ones, but you want to take all of that into consideration.

Bill Kelly (34:13)

And maybe a thought on that is our lives are very, very busy. And if one part of the spousal unit brings this up at 9:00 at night and the other spouse is in bed or reading the newspaper, maybe it's not going to land as well as it should. Versus, like so many things, let's get something on the calendar. Why don't we next Saturday go for a three hour walk maybe with a notebook in hand. And we really have to have serious discussion about estate planning, around our wills, around asset allocation. So at least is a mindset that, okay, the time has come and we're going to talk about it. And while that may sound formal in a couple's relationship, maybe it's something better to schedule it. So no party surprised they have a thought process on their own. And again, I don't know if that's a crazy idea.

Monique Frederick (34:57)

No, it's an excellent idea. I think that's a good idea. I like it.

Bill Kelly (35:01)

Okay, so maybe in the 2.0 of your book we'll cover that as well. So, Monique, in the remaining minutes, related but two part question. We're sitting here, I don't know when this is going to be aired, but we're on the 13th of January, so maybe most New Year's resolutions have already fallen by the wayside, which means maybe your goal was too lofty to begin with or you never believed it in the first place, but I would assume even somebody of your stature, accomplishments and experiences probably has financial goals going into every year. And maybe it's a continuation of a goal you made five or 10 years ago. And now as your twins entering the teen years, maybe either you have goals for them or they have goals themselves as well. So maybe you could talk about the Frederick household and what kind of financial goals and resolutions you have for 20, 25 and beyond before I even tell.

Monique Frederick (35:50)

You sort of what the goal might be. One of the things that I've learned, and this doesn't come from me, this is from dealing with other coaches, et cetera. But it's that we tend to, when we have resolutions in general, we'll set them at the beginning of the year. We all know that the majority of them basically fail before you even get to the end of January. But what we sometimes forget to do is to go back and look at the goals that we set the prior year. Why did they fail? What was it that didn't work? And then the goals that we set for the new year, you need to address why it didn't work. And maybe rather than looking for a goal that's a number, let's say, you know, I need to make, I don't know, 10% return or whatever that number may be, or I need X for this goal, rather than doing that, is looking at what do you need to do that would get you to achieve that goal that is not necessarily tied to that number. So to give you an example, if someone is running their own business, their entrepreneur, and they want to make a 10% return, how do you get there? Okay, maybe they need to have X number of meetings with clients to get to that. Then focus on the number of meetings, don't focus on the number. So I say all of that to say for me, I'm not choosing a specific number, but I do know that obviously there's only a couple of years left before my boys will have to go to university. And so the focus is trying to get that in order. And obviously, yes, you would have started investing years ago, but the focus is now a lot more on what's going to happen in the next couple of years and how do I make sure I have put aside funds to get them through university. And it will change over time, but that's sort of where the focus is at the moment.

Bill Kelly (38:03)

Excellent. And I know that you learned some pivots during your university years and may your dad rest in peace. But things do happen and again, you have to have a plan, but then be prepared to pivot as well. So, Monique, I really did enjoy the conversation tremendously. I think the book is an excellent read. Even somebody of my grizzled years, both as a human being and four decades in the space can always learn something. And I would say to the listeners, the advice I took away from this conversation and from the book is stay informed. Read, read, read. And there's always an entry point, there's always a source and just get a little bit smarter. But I thank you for your friendship, for caring as much as you do, and certainly for your voice, Monique, and look forward to seeing you on my next trip south.

Monique Frederick (38:46)

It's been a pleasure. I enjoyed this conversation and I always enjoy conversations with you because I think your vision and view on just financial literacy in general has always been there. So I also wish for you to continue doing what you're doing.

Bill Kelly (39:04)

I will. I have no other choice because I love it. Thanks, Monique. Thank you for listening to Educational Alpha. I'm your host, Bill Kelly. Learn more about the Kaiser association and subscribe to the show@kaya.org that's C-A I a.org See you next time.