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Influencers Transcript: Jean Chatzky, March 7, 2019

ANDY SERWER: An influencer helps others tackle what they can’t face alone. And money questions, many turn to Jean Chatzky.

Chatzky has been a personal finance expert for decades, offering actionable advice in appearances on NBC’s Today Show and in columns for Smart Money and Money Magazine.

She’s also an advisor for AARP and Fidelity Investments.

Last year, she launched a website and podcast HerMoney to help women get the same raises and the returns men do.

Chatzky is here to address something we usually only talk about in private: our financial well being, and how to improve it.

Welcome to "Influencers." I'm Andy Serwer. Joining me today is Jean Chatzky, financial editor of NBC'S "Today Show," personal finance ambassador at AARP, host of the podcast "Her Money with Jean Chatzky." Jean, welcome. Great to see you.

JEAN CHATZKY: Nice to see you, too. Thanks for having me.

ANDY SERWER: So you are a personal finance expert. And I guess my first question is, how do you become a personal finance guru? What goes into that?

JEAN CHATZKY: Guru, I hate that word.

ANDY SERWER: OK, sorry. Personal finance expert. Let's do that.

JEAN CHATZKY: I hate that word. There we go. I was fortunate enough to be able to learn my way through this in journalism. I came into personal finance through business journalism. I had gotten a job as a fact checker at Forbes after spending a little bit of time in equity research on Wall Street and joined the startup team at Smart Money, where I was able to have this window into real people and how they use their money that I found really exciting, and fascinating, and emotional.

And as I found myself speaking to investment experts, and retirement experts, and estate planning experts, and divorce experts, I started working on my own financial life, and then I started talking about it on television and helping other people along the way. But I was a student long before I was a teacher, and I was a financial mess before I was actually good at managing my own money.

And so I feel really strongly that it's not rocket science, that anybody who wants to put in a little bit of effort can be a fine manager of their own money. You just have to do the work.

ANDY SERWER: So some of this stuff, though, goes back, my understanding, is to how you were brought up with your own family, your parents being frugal, going on these trips where you guys packed your own lunches and all that stuff, right?

JEAN CHATZKY: Well, frugal out of necessity. So my father was a college professor at--

ANDY SERWER: Mine, too.

JEAN CHATZKY: I didn't know that-- at the University of Wisconsin and then at Indiana University. And he got much of the summer off, and we used to take these amazing trips. I remember a drive across the country to go see the Grand Canyon, and the arch in St. Lewis, and, you know, Vegas. We hit-- we hit all-- all the high points.

But one of the ways that my parents made it work, affording to travel for such a long time, was bologna sandwiches on Wonder Bread out of the back of the car for lunch, you know? It was-- it was a conscious decision that it was really important to take their three kids in the station wagon to see the world, but they were very conscious of what they could and could not afford to spend on this trip so that they wouldn't go into debt.

ANDY SERWER: You know, I'm curious about that, that point. And to follow up on that, how much of this is nature and how much is nurture? I know some people who just seem to be better at money. It's just in their DNA. But apparently, you can also learn to be good about it as well?

JEAN CHATZKY: Yeah. I think there's a lot of this that's biological. And anybody who has multiple children knows this, right? I've yet to see a study on identical twins, although I would love to see one. But if you've got a couple of kids, you have likely witness the fact that although they grew up in the same environment, they're probably very different when it comes to managing money. And behavioral finance experts in neuroscience have looked-- neuroscientists have actually looked at people's brains, and they can see that for some people, spending money is a pleasurable experience, and for some people, it's a painful experience.

ANDY SERWER: I mean, are those people more evolved? Are they better human beings as people who are naturally better at money? Because it seems like they're less impulsive, they understand what long-term means.

JEAN CHATZKY: I don't necessarily think it makes them better, because I've got a lot of my work recently has been focused on women. And when I, for this new book, "Women with Money," went around and asked hundreds of women what they wanted from their money, before they could get to anything else, they had to check off the security box.

And that, I think, is-- is innate. It's a product of society. It's-- it's-- it comes from the fact that women often don't even feel safe walking around the streets at night, and it also holds us back, right? We have to check off that security box. And if that means that we've got money in the bank instead of money in the market, we're not doing ourselves a lot of good, so I do think it's a double-edged sword.

ANDY SERWER: So you've been doing this for a number of years. Have people have gotten better?

JEAN CHATZKY: Yes.

ANDY SERWER: Has our society gotten more realization when it comes to this stuff?

JEAN CHATZKY: Yeah, because we've had to, right? You and I came into this at about the same time, which was also about the same time that 401(k)s were invented. And the responsibility for managing and growing enough money to live out the latter third of your life was on, all of a sudden, the shoulders of people who were not qualified to handle it. And we've had to learn. We've had to figure out how to make that work.

And some people have done it better than others. And behavioral innovations like automatic enrollment in 401(k)s, and automatic escalation, and target date funds, those things have really, really helped us. But we're moving more in that direction with health care now being something that we've got to-- we've got to fund, we've got to manage. With-- with people freelancing, and working in the gig economy, and having absolutely no corporate safety net, it's a matter of necessity that we get better at managing our own money.

It's not been a quick revolution. And-- and by far, we-- we still have a very, very long way to go when you look at how little money the average person actually has saved, but we're getting there.

ANDY SERWER: I mean, that's interesting that this sort of cultural societal change in capitalism, too, has made us have to become more self-reliant, right?

JEAN CHATZKY: Yeah, absolutely. Our grandparents lived in an entirely different world financially. You know, they had pensions. They had health care.

ANDY SERWER: Lifetime employment at one company, in some cases.

JEAN CHATZKY: Right, and they-- and they died a lot earlier, in many cases. And we've got these longer lifespans that we have to worry about, how are we going to make our money last 30 years, 40 years beyond?

ANDY SERWER: Right. And then there's the whole issue of women, and more of them are independent, financially independent, and I want to come back to that in a second.

JEAN CHATZKY: Sure.

ANDY SERWER: But first, I want to ask you, is the question that people ask you the most, Jean, what are the three mistakes people most often make? I mean, I was thinking about it, you always ask, like, a financial expert, like, OK, what are the mistakes that people make? And then I'm going to ask you that question, but is that the question you are asked the most?

JEAN CHATZKY: I don't think so. I think-- the questions, because I think about these questions I get asked the most. How do I find a financial advisor I can trust?

ANDY SERWER: OK.

JEAN CHATZKY: Do I need long-term care insurance, and-- and how do I raise my kids to be responsible with money? I think those are my top three.

ANDY SERWER: OK. Well, answer those, then.

JEAN CHATZKY: OK. How do I find a financial advisor I can trust? I think that although there are a lot of great zip code locators on the website of every financial planning association on the planet, you're best off starting with your own network and particularly your colleagues, because it's likely that they have a financial life that is similar to yours. My next door neighbor works at Pfizer. They all use the same couple of financial advisors, because those are people who are familiar with their retirement plan.

So you get-- you get a few recommendations from people that sound like they might make sense to you. You go and you sit down with those people. It should cost you nothing. And you go through the process of asking a series of questions to evaluate how this person works, how they get paid. What's their background? Because financial advisors these days, some come from the world of accounting, some come from insurance, some come straight out of MBA school or with a CFP. You want to know how they got into this.

You want to see how their style meshes with yours. You want to do a background check. And then my big red flag when it comes to advisors is I don't like advisors who talk more than they listen. I think if you are hiring someone to help with your financial life and your financial goals, it's their job to know what your financial life and your financial goals are all about. And if they're selling, they're not listening. So that's number one.

ANDY SERWER: OK.

JEAN CHATZKY: Do I need long-term care insurance?

ANDY SERWER: Yes.

JEAN CHATZKY: Maybe is-- is the answer to that question. I kind of think it makes sense for a very specific group of people, for people who have enough assets that they're not going to spend down so quickly that they'll qualify for Medicaid, and for people who don't have so much in liquid assets that they could easily invest and fund their own care. So in between about a million dollars and $4 million, $5 million in-- in investable assets, long-term care insurance makes a lot of sense.

What has changed, though, in-- in the past few years is that a lot of companies have gotten out of the business, and we've got a lot of new hybrid policies that make sense for certain people. So for example, there are these life insurance policies where if you use the benefits to pay for your long-term care, you can pull them out. But if you don't, the benefits can actually flow to your kids. A lot of people like that because it's not like an either/or proposition.

ANDY SERWER: Right. And for people who have less than a million dollars, though, they-- it's not a good deal for them?

JEAN CHATZKY: Well, the problem is it's going-- you may want to buy a small policy as a form of gap insurance. With less than a million dollars in disposable assets, it's going to be very difficult to maintain the premium payments. And this is one of those environments where the last thing you want to do is start paying premiums when you're 50 years old and get to 70 realizing you can't pay them anymore, and that's when you need it, but it has been cut off.

ANDY SERWER: OK. And then the last question, which I find most salient.

JEAN CHATZKY: Yeah.

ANDY SERWER: How do you have your kids become financially independent?

JEAN CHATZKY: It is-- it's a process. My-- my kids theater instructor is British, and he always says it's a process. So this is a process. It is-- it starts when they're young, teaching them that money is a limited resource, and that they have to choose, that they can't have everything. It starts, I think, with putting some money in their hands that they have to manage. I'm a big fan of allowance, because I think until people have money to manage, they are not going to learn how to manage money.

And so you put some money into your kids' hands with a list of things that you are no longer going to fund. So when they're young, that might be snacks in the school cafeteria. As they get older, it might be activities that they want to do with their friends. It might be gas for the car. You get to decide what that list is, but then they have to manage their budget in order to get the amount of these things that they want.

And you can't give them enough to get an excess of those-- those things, because the other really, really important thing is that your kids have to work. They have-- they have to have jobs outside the house, because I learned with my own children, If I hadn't already learned it from my own paychecks when I was a teenager, money that you give your kids in the form of an allowance or for a birthday, it is so less valuable than money that they earn.

It-- my-- my son as soon as he started babysitting came home. And all of a sudden, $10 was an hour of his time, and that jersey that he really wanted the week before when I was paying for it, he didn't want it anymore.

ANDY SERWER: Right. And even with all the demands on kids, there's still time for them to do this. It's important for them to do that, you think.

JEAN CHATZKY: I think it's crucial. I think it's crucial. And I think, you know, there's a saying that-- it's trite-- but, you know, if you want something done, ask a busy person, or something like that. Our kids can handle a lot. And sometimes when we give them an abundance of time to focus on schoolwork or focus on sports, I think this is a very important piece of the puzzle.

ANDY SERWER: You have been on "The Today Show" for, I think, 24 years--

JEAN CHATZKY: Yes.

ANDY SERWER: --which is a great run. What is that like? I mean, it's an amazing platform.

JEAN CHATZKY: It has opened a lot of doors for me, so I'm incredibly grateful. In the beginning, it was nerve-racking. I mean, incredibly nerve-wracking. I would get physically ill going to that studio in the morning and in the-- in the early years. But I learned how to take a very complicated subject and boil it down to its essence.

I think that's where I sort of polished that skill, because I-- I remember taking these eight-page stories out of "Smart Money Magazine" or "Money Magazine" and having to think about, OK, what's really important? What do people really need to know? Because when you have three minutes, as you know, that's all you're going to get out is-- is the real essence. It has-- it's been a huge gift.

ANDY SERWER: Do you remember talking to celebrities in the Green Room?

JEAN CHATZKY: I do.

ANDY SERWER: Did they ask you for free advice back there? What are some stories along those lines?

JEAN CHATZKY: Not a lot of free advice, but it's incredibly fun to be a fly on the wall. So I was in the Green Room the night that Hugh Grant came in after being on "Leno," when he was arrested for solicitation. That was interesting.

ANDY SERWER: Yes.

JEAN CHATZKY: I have seen many of the cast of "Friends" in the Green Room through the years, which has been a thrill. When Lisa Kudrow said, oh, yeah. I know who you are. I was just like, oh my god. You know, why-- why-- why didn't somebody capture that on camera? I-- I played a memorable game of ping pong with Tom Cruise actually on set. I did a segment about Christmas shopping, sort of a high-low on-- on-- on holiday shopping. And I had a ping pong table on the set, and he was there for the next segment, and somebody handed him a paddle, and we just played ping pong for a half an hour in the background.

ANDY SERWER: That's awesome. Not always fun and games, though, in that business. I mean, two questions I want to ask you. One, being a woman in the television business, has that been difficult at times? Let's just start with that.

JEAN CHATZKY: For me, no. But I think it has everything to do with the subject matter. When I started talking about money on television, I was highly unusual. There were a lot of men older than me. I was-- I was not even 30 at the time when I started doing this. And there were a lot of men older than me with gray hair in suits who were having the same sorts of conversations that I was having.

And I think the reason that I stuck on "The Today Show" was that hearing this information coming out of a different kind of being-- you know, somebody who was petite, and had a higher voice, and was maybe a little less threatening and authoritative, totally helped. I think-- I mean Bryant Gumbel actually said, I like her, and-- and I was able to continue to-- to do that for a long time. So for me, it-- it-- it has helped. It hasn't hurt.

ANDY SERWER: Interesting. NBC has had its problems with MeToo, like the rest of the media, with Matt Lauer, et cetera. Why do you think there has been so many problems in the media, not only NBC, but other places as well? Did you witness any of this yourself, and what's your take on all that, Jean?

[SIGHS]

JEAN CHATZKY: As far as the problems in-- in the media, I think that that was the world and that it was unfortunately for many decades just the way it was. And people didn't feel-- women didn't feel empowered to push back. And fortunately, that has changed, and women feel comfortable saying, this is not right. I do not feel comfortable with-- and men too, by the way.

I did not experience it, but I am grateful for this sea change, you know, that has happened. I-- I talk a lot in the new book about the wage gap, and how women need to feel empowered in order to step up and ask for what we deserve, and ask for a level playing field, and ask for transparency. And I think it's one in the same. I really think it is-- it's all part of the same conversation.

ANDY SERWER: I guess over the past decade or so, Jean, you have focused more on women in money.

JEAN CHATZKY: I have.

ANDY SERWER: And I want to ask you why you've done that and your sort of latest endeavors, your podcast, and how does that all tie together?

JEAN CHATZKY: I have noticed in-- in my own life-- and I-- I give a lot of speeches as-- as you do. I go out and I talk to big groups. And over the years, one of the things that I noticed was that when I was in a mixed group of people, men and women, it would take a little bit of encouragement to get the Q&A going at the end of a session. When I was in a group of all women, they couldn't wait. They were just lined up at the microphone and so hungry to have this conversation that we don't have.

And-- and that led me in the direction of launching the "Her Money Podcast." I'm-- I'm a very, very big fan of Jane Bryant Quinn. I think she continues to produce amazing personal finance journalism, but she was one of the women that I looked up to as I was learning how to be a personal finance reporter. And she famously said, money isn't pink or blue. It's green, which I think is absolutely true.

But I also think we have to be in an environment in which we are comfortable to receive the information. We have to be-- people learn differently. Some people are visual learners. Some people are auditory learners. Some people learn by reading. Some-- some people learn by talking.

We need to find a comfortable space in order for these important messages to sink in, and a room of all women or an audience of all women is a very comfortable space for a lot of women. And so with hermoney.com, and with "Her Money Podcast," and with the new book, that's what I was looking to create.

ANDY SERWER: I mean, you hear a lot about how it's different for women. I mean, on the one hand, it's the same. And the other, it's different. Is it really that different? I mean, so there's a-- there's difference in life expectancy.

JEAN CHATZKY: Yes.

ANDY SERWER: There-- so how are things really different?

JEAN CHATZKY: So it's different in those technical ways. Women live longer than men, about five years at this point, on average. Women still earn less than men, which means that when we-- and we take the breaks from the workforce, which means that when we get to the end of our careers, we have much smaller balances in our retirement accounts, and then we have to make that money last those longer years. So if anything, the-- the fact that we need to be saving aggressively and investing aggressively is more important for women.

Women are reluctant investors, and that is in many ways due to, I think, how we're wired. We like to know the answer to every question before we ask it. And in the world of money, there are some questions that I can answer and I can be 100% right. What's the credit card with the lowest interest rate? I can tell you that. I can be correct. Where should I invest my money over the next 10 years? I can tell you that. And I can be pretty good, but I'm not going to be 100% right, because there's so many unpredictable factors in the soup.

And that's an uncomfortable place for many women, and we've got to through conversation, through education, through helping-- the helping hand of behavioral finance, bring women along. Because if we stick to this underlying need for safety and security and keep too much cash in the bank. And you look at the numbers. BlackRock did some research, and women keep more cash in the bank than men do, percentage-wise. We do that. We are sabotaging our financial security, which is completely beside the point.

ANDY SERWER: That's fascinating there's a psychological component to that sort of decision-making, and that women perhaps need to take a leap, essentially, then.

JEAN CHATZKY: Yeah. Take a leap and also acknowledge what we're already doing well. You've-- you've seen the research on the fact that when we look at women investors compared with men investors, women also often do better, and we do better because we don't meddle, right? We-- we-- we don't-- we're not in there actively trading as frequently as men are, and because of the costs of trading, that generally helps us.

But we also put money into our retirement accounts. We put a higher percentage of our wages into our retirement accounts, research has shown. We-- we need to allow those experiences to give us confidence to invest above and beyond the money in our retirement accounts.

ANDY SERWER: Is that the kind of thing that when you talk about trading, for instance, overtrading, I mean, I wanted to ask you about the common mistakes that people make, both men and women. That's certainly got to be high on the list, right?

JEAN CHATZKY: Yeah. Overtrading, pulling money out of the markets when they crash, right? I mean, nobody got hurt as much by 2008 as the people who pulled money out and just didn't get back in, right? Having the fortitude to stick with your long-term plan, your long-term goals is-- is crucial, even if it means you've got to turn-- tune out the noise, turn off the television, or the radio, or whatever it is you're listening to, and just go on with your day.

ANDY SERWER: We've been talking about a number of societal changes in our careers. And one thing that's also very different now is wealth and income inequality.

JEAN CHATZKY: Yes.

ANDY SERWER: And I'm wondering how that's influenced your work and your thinking, Jean.

JEAN CHATZKY: It has influenced my work and my thinking a great deal, particularly in the area of health care. I wrote a book about two years ago now called "AgeProof." I wrote it with a doctor named Michael Roizen. It-- it had a funny subtitle about how to live longer without running out of money or breaking a hip.

And it was about the intersection of health and wealth, and the fact that if you're not financially secure, it's pretty much impossible to stay healthy long-term. And if you're not healthy, it's pretty much impossible to stay financially secure long-term. The people who are suffering in terms of their health are the people on the lower end of the income spectrum.

And it's going to be a real drain on the resources of this country if we don't do something to fix that, if we don't do something to make sure that there is some sort of basic level of health care for society as a whole.

ANDY SERWER: And what about those poor baby boomers, Jean? Are they going to have to work until they're 85?

JEAN CHATZKY: No.

ANDY SERWER: What's the outlook.

JEAN CHATZKY: They're not, actually. What we're seeing is-- is pretty heartening, that these poor baby boomers, as you put it, are pretty resilient when it comes to managing their spending. And so they are consciously or unconsciously taking less out of their retirement portfolios when the markets are down and taking a little more when the markets are up, and that is enabling them to sort of smooth the waters going forward and make their portfolios last.

I do think one thing we will be seeing a lot more of, though, are solutions that provide more of a retirement paycheck. I'm starting to hear a lot more of people wanting that kind of solution. And, you know, when I grew up at "Smart Money Magazine" and at "Money Magazine," I spent a lot of time, and you spend a lot of time at Fortune, talking about the fact that we have to save, save, save, save, save.

Well, we're now at the other end of the curve for all of these baby boomers. Many have saved. Many have saved well. Some have saved not so well. But the withdrawal part of the equation is as important, if not more important than the accumulation phase, and we're only starting to sort it out.

ANDY SERWER: Many of us are looking forward to some of that withdrawal process, Jean.

JEAN CHATZKY: Yes. Although, you know, I read Michelle Singletary's column yesterday in the "Washington Post," and she was talking about how hard it is for some people to allow themselves to actually spend the money, and I'm wondering what I'll be.

ANDY SERWER: Right. So this show is called "Influencers," and I'm wondering if you've given any thought, Jean, to how you use your influence.

JEAN CHATZKY: I-- I try to use my influence for good. I mean, I try. The goal of hermoney.com is to become the most trusted financial site for women. And I take and have always taken the level of reporting that I do, but now the level of reporting that my team does, incredibly seriously. You know, we are messing around, for lack of a better word, with people's money, and that is no area to be messed with. So we need to be accurate, we need to be fair, we need to be correct as much as it's possible to be correct.

We need to-- we need to pay attention to the pain points in people's lives so that we make sure that we're covering the right topics. And so for us, the feedback that we get from the women in our Facebook group, from the people who write letters after a podcast, I mean, we really listen to that stuff because that's-- that's where the best ideas come from.

ANDY SERWER: Makes sense to me.

JEAN CHATZKY: Yeah.

ANDY SERWER: Jean Chatzky, thanks so much for coming by.

JEAN CHATZKY: Thank you.

ANDY SERWER: That does it for "Influencers." I'm Andy Serwer. We'll see you next time.