I think I’m still processing the scale and energy of the 2018 Grace Hopper Celebration of Women in Computing. This was my second year attending.
The conference is, obviously, about so much more than how to manage your finances. But it’s the part I care about most, so I viewed most of the conference through that lens. And, as I did last year, I walked away with a better understanding of how women feel about money, what their questions are, and what kind of guidance they want, need, and deserve.
I spoke on a panel entitled “Money is Power: Technology Can Make You a Better Investor.” We veered a little off-course and didn’t do justice to some of the investing topics that I think are so important for you to know. My blog post here is, in large part, my opportunity to talk about those things. (Last year I spoke about stock options in private companies. My major takeaways from that conference were about how women should approach their careers in tech.)
Should You Get Financial Advice from Technology or a Human?
My fellow panelists, Alison Heisner, Kristy Wallace and Lauri Hofherr, and the moderator, Christine Benz—who all work at fintech or finance companies—all pay for financial advice. Some use tech tools that offer human help. Others use a human advisor for annual check-ups. In that way, I thought the panelists did a lovely job of illustrating this important point:
Financial advice exists in a spectrum from All-Tech to All-Human, and the best financial advice exists between those two extremes, not at them.
Personal finance is very personal, so a pure tech tool simply won’t suffice long-term for the vast majority of us. Pretty much every “roboadvisor” I know, even if they started out pure tech, has started offering some level of human advice. Betterment, Wealthfront, Ellevest. They’re tech heavy with human offerings.
My practice, and practices like mine, represent the other kind of advice: human advisors who rely heavily on technology to make advice more comprehensive, less conflicted, more effective, more accessible (i.e., virtual), and lower cost.
Advice that is all tech won’t work for most people because, well, we’re people, with emotions and complicated lives and a desire for connection. Advice that is all human won’t work because it takes too much work to do all this stuff manually, so the service is either too expensive or too narrow in scope.
Where you fall, what kind of advice you need depends on a lot of personal things:
- your level of knowledge
- your interest
- the time you want to dedicate to it
- the complexity of your situation
- your ability to hold yourself accountable and manage your own behavior productively
- whether you’re a couple that needs help equally participating in the conversation (not to say that each person needs to be equally in charge, but each person needs to be equally aware)
You’re Probably Holding Too Much Company Stock. Especially If You Work at Amazon.
I have clients at Amazon, so I am aware of how much the stock has grown in the last few years. And how tempting it therefore is to keep a lot of company stock.
During the panel, I used Amazon as an example of how to think about company stock. I think the entire first three rows of the room must have been populated by Amazon employees who have held most of their company stock, because they all erupted in knowing nods and titters.
Christine Benz, Director of Personal Finance at Morningstar, the moderator, mentioned the research that her colleague David Blanchette has done to find out the optimal percentage of your investments to hold in company stock. The answer? 0%. Zero. Zilch. Nada. (I’m not quite sure which research paper she was referring to, but I found this one that shows this conclusion. Warning: boring!)
It’s easy to be swayed by the handful of tech companies whose stocks have gone gonzo recently (this is an example of a very common but unhelpful mental shortcut called the availability bias), but if you’re somehow able to broaden your perspective to tech companies in general, you’ll see that holding company stock is not a good bet.
You know when would be a good time to sell some/more/most/all of your Amazon or other company stock? Right Now.
Thank your lucky stars for the growth in stock value up ’til now and don’t tempt fate by continuing to hold it. If you do want to hold it, then do this thought experiment first:
- How much is your company stock worth right now?
- How much is 60% of that? How many dollars?
- What would it feel like to lose that many dollars? Because a stock losing 60% inside a year (or even a few months) can easily happen. Dot Com Bust, anyone? Great Recession, anyone?
- What would you have to change in your life if you lost that many dollars? Would you have to delay buying a home? Would you be unable to leave your job at a moment’s notice because you needed the paycheck? Will your desire to reach Financial Independence by age 50 be pushed to age 55?
- Are you okay with those possible changes? If so, alright, you might convince me to keep more of your stock. If you’re not okay, then you’re taking on Too Much Risk and You Need to Sell.
Our Parting Advice for Your Finances
Our panel ended with a lightning round, where each of the panelists gave her best piece of general personal financial advice. I gave the one I usually give, which is to make damn sure to educate yourself about personal finance. You can use a tool or a professional to help, but be sure to “Delegate, Don’t Abdicate.”
Thankfully, my panelists weren’t the kind of people who shrink from a challenge, even a rhyming challenge. So, among the four of us, we ended up with this masterpiece:
Delegate, Don’t Abdicate. Or Procrastinate. But Do Communicate. And, um, Plan-erate.
We also wanted to leave attendees with three very specific tasks they could immediately go back and implement, that would get them the most bang for their buck, so to speak. I would lovety love love it if every person coming into their first job in tech would follow these rules.
- Contribute at least enough to your 401(k) to get the full company match.
- Don’t keep your investments in cash. Actually invest them.
- Have an emergency fund (this is cash) that can cover your bare-bones expenses for at least four months.
If you’re already doing this, will you please share this advice with every person you know who’s just starting their career in tech?
Other Topics That Will Have to Wait for a Future Blog Post
A woman in the audience asked our opinions of Financial Independence/Retire Early (FIRE). Oh, I gots me some opinions, enough to fill an entire blog post by itself. Stay tuned.
We also didn’t have the time to talk much about the dangers of using #fintech tools to invest your money. This is of particular interest to me, as I think people put too much faith in the power of technology in this regard. This, too, shall fill an entire future blog post.
There is So. Much. Interest. in Personal Finance.
I think close to 1000 people attended our panel. Pre-registration maxed out several weeks before the conference. And after the panel, a group of attendees trailed me out to the hallway to ask questions.
I’m mostly delighted and reassured to see the interest. That is the necessary first step, after all, to actually claiming control of your money. I am also, as always, a bit chagrined to see how little many women have learned or been taught about personal finance.
Whether you use tech tools or a human or do it on your own, please please read up on personal finance.
It doesn’t need to be a full-on hobby. Just spend, I don’t know…3 hours a year reading books? You just need to know enough to avoid most of the usual boneheaded mistakes and especially enough to call BS on anyone (co-worker, advisor, tech tool) that proposes doing something with your money that’s not right for you.
I have so many ideas for next year’s conference. Is it as simple as just having more sessions? Or lightning-round 1-on-1 meetings with Certified Financial Planner professionals who are well versed in the needs of women in tech? Or an entire section of the Expo hall that provides personal finance information all day long, just as the tech companies recruit all day long?
Blatant request for help: if you’ve got the GHC hookup and this sounds important to you (it is, trust me), lemme know!
Anita Hill and the Financial Piece of the Puzzle
The most powerful session I attended was, not surprisingly, the interview with Professor Anita Hill, on the very day of the Brett Kavanaugh Judiciary Committee vote. And wow. Tears, applause, inspiration, awe.
To think of what that woman voluntarily subjected herself to 27 years ago, for the good of the country and the women in it, and seeing what she had to endure…and that she has continued speaking out about issues of gender equality consistently since then. We all basked in the presence of True Strength.
Prof. Hill spoke about many things. I listened in part as a mother, in part as a woman, and in part as a financial planner for women in the technology industry. She said one thing that caught the attention of my financial planner self.
She said that this industry (tech) and the culture in general is hostile to us, as women. And that putting people on the Supreme Court who don’t support women’s rights has lasting, powerful, but sometimes not-so-obvious effects that reinforce this hostility.
She used the example of the Supreme Court ruling that allows the use of arbitration clauses more often. This has meant that women are less able to recover the costs of gender discrimination in their career, because they’re forced into arbitration instead of being able to take their employer to court. “The Supreme Court has been tightening our options…and will continue to do so [if Kavanaugh is approved].”
There are many, powerful things that we can do to help counter this scary trend that are utterly outside the scope of financial planning. The thing that occurred to me, though, being all financial planner-y, is that this is yet another really important reason that you all need to work on building your financial strength.
Financial strength is not a panacea, I know. But it certainly can help you survive nasty situations, legal, personal, or professional. It does, in many instances, give you more choices than you’d have with less money. And the women in the front rows at my panel sure as hell seemed to agree that choice was one of the important things that a woman can have.
- Are you a woman in tech? Go to Grace Hopper. You will feel more at home than you do in the rest of your work life. You will feel comfortable, safe, empowered, and inspired.You have the opportunity to learn a buttload, too, even though I myself go more for osmosis through networking. Tickets go fast, and it’s not cheap. Try to convince your company to send you! Submit your own speaking application; if you are accepted, you get a ticket—this year the conference was free—and you get first dibs on hotel rooms (which disappear fast).
- Read some books or blogs or listen to podcasts about personal finance. There are a ton of good ones out there. There is also a ton of dreck. The list on my FAQ is a reasonable place to begin.
- As Prof. Hill ended her session by asking: “What are you going to do now?” For yourself? For your community? For your family? For your career?
Did you go to Grace Hopper? Do you feel inspired to make a difference in your finances, and make the most of the opportunities your career offers? Please reach out to me at firstname.lastname@example.org or schedule a free consultation.
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Disclaimer: This article is provided for general information and illustration purposes only. Nothing contained in the material constitutes tax advice, a recommendation for purchase or sale of any security, or investment advisory services. I encourage you to consult a financial planner, accountant, and/or legal counsel for advice specific to your situation. Reproduction of this material is prohibited without written permission from Meg Bartelt, and all rights are reserved. Read the full Disclaimer.