Take Back Retirement
Episode 36
Strategies to Move Toward True Values-Alignment with Your Money
Guest Name: Janine Firpo
Visit Website: activateyourmoney.net/
Today, Stephanie and Kevin sit down with Janine Firpo, a seasoned values-aligned investor and social innovator. She has been working at the intersection of women and money for a long time, having held positions in Apple Computer, Hewlett Packard, The World Bank, and the Bill and Melinda Gates Foundation.
In 2017, she left her successful career to focus on how women can create a more just and equitable society using their money. In May 2021, she released the book Activate Your Money: Invest to Grow Your Wealth and Build a Better World.
Janine makes sure to walk the walk as well, having moved all of her money into investments that she feels good about. Last year, she joined forces with Ellen Remmer to found a nonprofit called Invest for Better where women come together to learn about values-aligned investing.
Resources Mentioned:
Please listen and share with your friends who are in the same situation!
Key Topics
Key Topics:
- Releasing Activate Your Money and teaching women via Invest for Better. (2:20)
- How articles on financial issues traditionally differ when written for men versus women. (7:02)
- Making investing fun. (8:35)
- Why asset allocation is critical to your wealth-building goals. (13:45)
- The ESG philosophy and evaluating how well companies align with it. (15:34)
- “My goal is to invest every single dollar I have in ways that align with my values… and that includes my cash.” (17:41)
- The problem with “two-pocket thinking.” (23:01)
- “When you invest sustainably, you not only don’t give up financial return, but you can actually outperform.” (25:29)
- Why Janine decided to commit to values-aligned investing. (28:20)
- How to find better funds. (30:48)
- Knowing when to break up with your financial advisor and finding the right advisor. (34:18)
- “This is a marathon, not a sprint.” (40:45)
- Stephanie and Kevin’s closing thoughts. (43:57)
Stephanie McCullough (00:06):
Welcome to Take Back Retirement, the show for women 50 and better, facing a financial future on their own. I’m Stephanie McCullough, and along with my fellow financial planner, Kevin Gaines, we’re going to tackle the myths and mysteries of “Retirement,” so you can make wise decisions toward a sustainable financial future. Through conversations and interviews, you’ll get the information and motivation you need, to move forward with confidence. And we’ll be sure to have some fun along the way. We’re so glad you’re here. Let’s dive in.
Stephanie McCullough (00:40):
Coming to you semi-live from the beautiful Westlakes Office Park in suburban Philadelphia, this is Stephanie McCullough and Kevin Gaines of Sofia Financial and American Financial Management Group. Say hello, Kevin.
Kevin Gaines (00:50):
Hello, Kevin.
Stephanie McCullough (00:51):
Today we have an interview with Janine Firpo, and I’m really excited about this, because it really goes along with our theme of aligning your money with our values for 2022. Janine herself is a seasoned values-aligned investor, and also a social innovator. She’s actually been working at the intersection of women and money for a long time. She had a career in tech with Apple computer and Hewlett Packard. She has worked for the World Bank and the Bill and Melinda Gates Foundation, trying to make the world a better place. And then in 2017, she left her successful career to focus on how women can create a more just and equitable society using their money.
Stephanie McCullough (01:29):
So her book came out last year, it’s called Activate Your Money: Invest to Grow Your Wealth and Build a Better World. And it was actually as we’ll hear a collaborative effort with a lot of other women, but she’s also walking the talk herself. She is taking action and to move all of her own money into investments she feels good about. So she joined forces last year with Ellen Remmer to found a nonprofit called Invest for Better, which she will tell us about, to help more women both learn together and move their money this direction. So without further ado, let’s dive into our interview with Janine Firpo.
Stephanie McCullough (02:08):
Janine Firpo, welcome to Take Back Retirement.
Janine Firpo (02:10):
Hi, thank you so much for having me. It’s a delight to speak with you both.
Stephanie McCullough (02:14):
Yeah, I’m so excited. Congratulations on the book. How has it been received? What’s it been like?
Janine Firpo (02:20):
It was a huge effort to start with, it took me about three years to write the book, and I had about 150 people, mostly women help me with it. So it was a huge effort, but it’s been great since the book was released last May, there has been a lot of interest in it. And I also, co-founded a nonprofit last year called Invest for Better, which is putting women together in circles and teaching them how to invest and how to invest their values. And we’re now using the book as the curriculum for the core training that they go through.
Stephanie McCullough (02:55):
Perfect. So what does a circle look like then? How many… Do people gather in person, virtually? Give us an idea.
Janine Firpo (03:02):
Well, it used to be, so the woman who I co-founded this with had been doing these circles as a little project, and then we created a nonprofit, they’re peer led circles. So a woman steps up and says, “I will facilitate this.” And they contain anywhere from eight to 15 women who she finds some of those members, we can find members for her, but they tend to be very tight groups of women who are learning together. And we help the facilitators understand how to do the facilitation process, and we provide them with all the materials they need. And then each member has homework that they do, and then they have a conversation or discussion in their meeting. And the meetings can be either virtual, which most of them tend to be right now, but they definitely started out physical. So some are hybrid, some are meeting in person again, some are doing virtual or any combination of that.
Stephanie McCullough (03:58):
That’s so great. Okay. I have to go back to this 150 people, women who helped you with this book, how did you corral 150 people to help you?
Janine Firpo (04:06):
I asked. It’s kind of amazing. What I have found is that, and I found this in my career before, women in particular are insanely collaborative and we really love to help and uplift each other. And so I knew that I was not a finance professional and I needed that level of credibility in this book, so I started by reaching out to women who I knew were, and I asked them to help me. And I had women do everything from write components of the book to entire early chapters of the book for me, and then I rewrote it. And every chapter went to between 20 to 25 reviewers, half of whom were content experts on that chapter’s subject matter, and half of whom were just potential readers. And they gave me feedback, and then I wrote the chapter again. So each chapter of that book probably went through three or four revisions and a lot of reviews. And when I asked, women showed up, they were incredible. They were incredible.
Stephanie McCullough (05:08):
I love that combination because you have the technical stuff correct and it’s understandable to regular people.
Janine Firpo (05:15):
Well, what I found that’s kind of funny is that I asked my financial experts to write in simple language, which they attempted to do. I got the chapters, I would read them and I’d be like, “Too much lingo, nobody’s going to understand this.” And so in part of that rewriting, I simplified things and I took out some of the things that they wanted to really talk about that I thought were just a little too deep. So it was helpful that I’ve been an investor myself for over 30 years, and I’ve been studying this stuff. So I have enough knowledge to know something and enough knowledge to get myself in trouble if I’m not helped along the way.
Kevin Gaines (05:58):
So you knew to understand the language, but you didn’t know enough to be able to get caught up in the lingo, and it’s like, “Well, everybody knows that.”
Janine Firpo (06:05):
Right.
Kevin Gaines (06:05):
Because I have to say, when I write stuff, that’s my biggest problem is like, well, who doesn’t know what this phrase means? Or doesn’t everybody say it this way?
Stephanie McCullough (06:13):
I know.
Janine Firpo (06:16):
Exactly. And even when I thought I simplified it, I sent it to my readers, potential readers and they would be like, “No, too much information.” So I’d have to simplify it even more. So we really forget sometimes where women are often with their knowledge about investing.
Stephanie McCullough (06:37):
Well, think it taps into, if you read something that sounds complicated, then the stories in our head pop up like, “Oh my gosh, I’m such an idiot. I don’t know enough about this. I can’t believe I’ve gotten to this age in my life. I’m not an investor.” So all of that stuff, I always say it’s the stories in our head that trip us up more than anything else and no fault of our own. Right? Those are stories that have been placed there over our lifetimes.
Janine Firpo (07:01):
Absolutely. In fact, I learned recently, so I get information from lots of different sources, and one of the things I read is Sallie Krawcheck’s blog from Ellevest.
Stephanie McCullough (07:11):
Yeah.
Janine Firpo (07:11):
And she wrote something about the fact that if you look at the articles that are written from men and women on financial issues, they’re really different. So 90% of the articles written for women tell us to spend less money. And 65% of them tell us that investing is hard and it’s scary and it’s difficult. Whereas articles written for men, over 73% of them, tell them how to invest and grow their wealth. So they’re getting those messages while we’re getting hard, scary, “you spend too much money.”
Stephanie McCullough (07:50):
Yeah. We could talk about that for an hour.
Janine Firpo (07:52):
Yeah. It’s not a surprise.
Stephanie McCullough (07:54):
No.
Janine Firpo (07:54):
Not a surprise.
Kevin Gaines (07:55):
And the depressing thing is study after study shows this, that women have a much better temperament when it comes to investing. Which is men could tend to go in with too much of, I guess, alpha male approach, it’s “I got to win, I got to win, I got to win,” and we all blow ourselves up. But contrary to that, the studies say women are going to have the patience, they’re going to do a better job and not get all caught up in the emotion. Do you get into that detail in either your book or your programs as far as adjusting your, I guess your mentality or embracing your philosophy?
Janine Firpo (08:35):
We do. I talk sometimes about that, but I don’t touch on it hard, but I do talk about the fact that women are afraid of investing, but when we do invest, we outperform. So there are a lot of studies that show that, including one that was done recently by Fidelity that looked at 5.2 million accounts over a 10-year period, and showed that women consistently outperformed by about 40 basis points in their study. Right. That’s a pretty comprehensive study.
Stephanie McCullough (09:04):
Yeah.
Kevin Gaines (09:05):
Right.
Janine Firpo (09:06):
Well, I think the thing that is also really different about how women invest and this is really core to the book, is that we care about financial return without any doubt, but we care about more than that. And when we go into a financial advisor, we start thinking about our planning or what we should be investing in. We’re not driven by, “what are the markets doing right now? What is the economy doing? What are the coolest new things that people should be investing in?” We’re more interested in starting the discussion from, “these are the things I care about. These are the goals I have with my money. I want my money to not only be achieving financial return, I want it to also be doing things that are good, that align with my values and that I care about.”
Janine Firpo (09:52):
And so while Activate Your Money talks a lot about out how to invest, it goes into asset class by asset class, what it is, how that asset class works, but it really focuses on, and then when you’re making your investment decisions, how do you find investments in that asset class that align with your values? And so it goes through all the public asset classes, cash, fixed income, the stock market, but it also talks about areas where women are usually not in conversation, which is about private investing, doing equity investing, venture capital, angel investing, private debt deals. It talks about alternatives like water and renewable energy and agriculture and real estate, and how you can think about investing in those and investing your values in those.
Stephanie McCullough (10:46):
I just love that whole approach because to me, that’s what I discovered when I started Sofia Financial 10 years ago, is that the financial industry was not having conversation that resonated with women. You have to start with, “tell me about your life, tell me about your people, what’s important to you?” And then we line up the money to support that. So I feel like your message is right in line with that.
Janine Firpo (11:07):
Yeah. I think it really matters. For me, I think a lot of women see worrying about their money as just another thing that they have to do. Another thing that they have to learn. It’s like, you know what? Our plates they’re not only full they’re overflowing, and we can barely think about adding another thing in. And so if there’s someone out there who can just take that money worry off our plate and handle it for us so that we don’t have to think about it, some of us feel like that’s really okay. The problem with that, there are several problems with that in my view, but one of the main problems is nobody else is going to care about your money as much as you do. If you hand that money off to a partner and your partner happens to be a male, then chances are, he will pass away before you.
Janine Firpo (11:59):
And then you’re going to be left with these assets at a time when you really don’t want to learn about them, and you’re grieving, you’re in stress. You may end up divorced and having to deal with your money on your own. You probably aren’t going to get married as early as you would have in the past. So you are going to be on your own at some point in your life, and so understanding this is really, really important, right? We also live longer, we tend to have less wealth accumulated than men, and so being smart about your money is about being smart about your life and being smart about your future. And the way to make it fun, in my view, the way to give it juice is one, having your money doing things that matter and getting information from the investments that you make about the cool stuff your money is doing in the world.
Janine Firpo (12:50):
That’s fun. And the other thing that I think makes it fun is to not look at this as a solo sport, to realize it’s a team sport, learn with other women. So by learning together, we can make something really fun, we can make it enjoyable and we can share the workload of all the research that we have to do to figure out what to invest in and whether we’re making the right decisions.
Stephanie McCullough (13:15):
I think that’s a great point, because one of the issues that holds us back from feeling comfortable about money is that it’s still a taboo topic. And women learn in large part by collaborating like you said, and sharing their stories. But if we’re not allowed to share our money stories, then we’re blocked yet again from learning about our money. But one of the points you make in the book that I really love, is that you can learn with other women without sharing your numbers, right? You can share your goals and your broad direction and your values, but not exactly how much is in your IRA.
Janine Firpo (13:45):
Exactly. So I’m giving a talk tomorrow, for example, to a group of women and I’m going to actually show them my portfolio asset allocation. I’m going to tell them what percentage of money I have in each of these various buckets, but I’m not going to tell them the total amount of money that I have. Because asset allocation is such an important aspect of our financial journey, in fact, one of my financial advisor friends, told me the choices we make about how much of our money we put in each type of asset is more important to our ultimate financial wealth than the actual investment decisions we make. Right? So many, many times you get into a conversation about money and it’s like, “Oh, what should I be invested in it?”
Janine Firpo (14:30):
The actual conversation should be, “Well, let’s talk about how much you want in cash, much you want in fixed income, how much you want in public equities, how much you want in these other alternatives to meet your goals, and how those percentages may change over time.” We have different choices there. So just that conversation about asset allocation and percentages is a very substantive conversation, and you do not have to say anything about your total net worth.
Kevin Gaines (14:59):
I couldn’t agree with that more. That’s a conversation that gets ignored way too much by way too many people. The NBC, Bloombergs of the world, they’re always talking about the hot pick du jour. They never really talk about putting this stuff into context as far as asset allocation or any of the more important issues. So I’m glad you’re talking about that. And that was the thing that I love about your book and your website, which I’m going to stop myself there. How long did it take you to build that website? Because it’s impressive.
Janine Firpo (15:34):
Thank you. A couple of months, I had some help with it, I had a designer that helped me and I had a web developer that helped me. So the reference that I think you’re making to my website is the website is tied to the book and it has tons of additional resources. So in every chapter of the book, I end the book by giving a take action section and on the website, you can find a complimentary take action section to that chapter and download tools. You can download spreadsheets, you can download templates, you can download all kinds of other things, and you can access videos that I created to explain certain things in more detail. So there’re tons and tons of resources.
Janine Firpo (16:22):
The way that I came up with all of that was, as I was writing the book, every chapter I was doing research, I was doing homework, and I was keeping a massive list of all the resources that I found to help me write that chapter. So when I did the website, I basically went back to my lists of information that I had been accruing during the writing process. And the short version is it was a couple months in terms of development, the long version is it was three years of accumulating all the data that ended up there.
Kevin Gaines (16:57):
Yeah. I find that the website is really intuitive. It definitely follows a pattern and it’s easy just to go step by step and get a great overview of everything you’re talking about. I’d like to switch gears a little bit because there’s a couple of the chapters I’d like to try to explore, especially the chapter on banks. These are conversations that a lot of people don’t think about having with their banks, and I think it’s important for people to understand and realize you can ask these questions. It’s not a taboo subject or anything. Right?
Janine Firpo (17:40):
Right. I’m glad you hit on that, because it’s actually one of the issues that caused me to decide I was going to take my assets back to some degree from my financial advisor when I retired, and part of the impetus for writing the book. So at one point I had what I felt like was a fairly substantial amount of money sitting in cash. And that cash was sitting in large banks and it was sitting in my custodian account, like a Schwab or a Vanguard or Fidelity. And I had a financial advisor and I went to my financial advisor who knew that I want to invest. My goal is to invest every single dollar I have in ways that align with my values, and that includes my cash.
Janine Firpo (18:25):
And I went to my financial and advisor and I said, “So what can we do with cash? That’s more meaningful than having it in these big banks and these custodians who I have no idea what they’re doing with my money. And I pretty much am sure that if I start researching what they’re doing, it’s not what I want. And I would much rather have my money in my local community, helping my local community, who could I put my money in?” And they said, “Oh, Janine, don’t worry about it. That’s just your cash. It’s not an issue.” And I said, “Yeah, it is.” So my financial advisor didn’t help me, so I went out and I started doing the research on my own. And what I found is there are a plethora of other choices for us around our cash.
Janine Firpo (19:11):
And there are some great tools online that I talk about in the book and on the website that help us find those alternative financial institutions. Here are a few examples of what you could choose. You could choose like me. I want to put my money into the local community and have local women entrepreneurs and under served populations, get loans for businesses and homes and cars and school. You could say, “You know what? I want to put my money into a black owned financial institution or a Native American owned financial institution.” Or, “I want my money in a financial institution that is focused on climate change.” There are banks that are only doing lending and other services for climate change or small ag. So there are lots and lots of choices.
Janine Firpo (20:01):
And the great thing is when you go to one of these smaller financial institutions, as long as they’re registered with the federal government through either the FDIC or through something called the NCUA, which is the National Credit Union Association, your money is guaranteed, secured up to $250,000, just like it would be in a big bank. And the customer service is way better in a smaller financial institution. I no longer sit on 800 number lines for 25 minutes or more waiting to talk to my bank. And this is something anyone can do, no matter how much money they have or don’t have, they have a bank account and they can choose what that bank account is and what that money is doing.
Stephanie McCullough (20:50):
Well, because you make the point that the money is doing something, right. It’s not sitting in a room in the bank. The reason the bank can pay you interest is because they’re taking it and then lending it out and doing other things with it to make money for the bank, and they give you a little bitty bit of that. Right?
Janine Firpo (21:04):
Exactly. That’s actually, when I talk about this kind of investing, I call it values-aligned investing. And I do that for a very specific reason. When I was learning about this kind of investing, it was called impact investing. And I have a problem with that terminology because there’s an implicit belief that impact investing is positive, that when you’re doing impact investing, you’re having a positive impact. Well, the truth is that every single dollar we have is having an impact. The question is, what is the impact? Is it a positive one? Great. More likely it’s a negative one or a neutral one. So it’s a conscious decision to say, “I want to rethink the impact that my money is having and moving it from neutral and definitely negative impact into positive impact.” I think if enough of us start to do this and particularly women and millennials, the biggest wealth transfer in the history of this country is currently underway. And by 2030 women will control the majority of money in this country.
Stephanie McCullough (22:16):
Woo hoo.
Janine Firpo (22:17):
And in another 20 or so years, women and millennials will. And 84% of women and 95% of millennials want to invest their money in sustainable, meaningful ways. Right? So if enough of us do this and we choose how our money is invested, we can literally change the economy through those choices. Each one of us has a role to play. It may feel like our money is tiny and doesn’t make a difference, but it’s the cumulative effect that matters.
Stephanie McCullough (22:50):
Janine, can you talk to us about two-pocket thinking and how that is prevalent and where you see it, if you still see it popping up in the investors and in the industry?
Janine Firpo (23:01):
Oh, I think it’s the way people think about investing at large. And so what I mean by that, and it’s not my term, other people have used it, but we generally tend to think of our money as being in two pockets. There’s the pocket that we have to invest and invest to maximize return. That is our growth money, that’s our money for retirement, that’s our money for our kids’ education, whatever, but that money is intended to maximize return only. The other pocket is the pocket that we use for philanthropic purposes and to do good in the world. Right? The problem is when you think about the relative size of those two pockets, the do good pocket versus the maximized return pocket, the do good pocket is usually relatively small.
Janine Firpo (23:52):
And so then you have to ask, “Okay, then what is the maximized return pocket doing? And which is actually having a bigger impact in the world?” So the kind of investing that I’m talking about sits between them, it’s a new kind of investing. It’s the analogy that I use as a tidal zone. I used to be a biologist a long time ago, and a tidal zone is an ecosystem that exists between the land and the sea. You could not have what you have in a tidal zone in the sea, and you couldn’t have it on the land. It requires both of those elements to come together to form something new, right? This investing is exactly the same. It is something new. It brings in the best of both. It takes the pragmatism, the financial acumen, the brain, the mind of finance, and it brings in the heart and the soul and the compassion of philanthropy and charity. And combines them together to create an output that provides both financial and social return.
Stephanie McCullough (25:03):
I think it’s still a new idea, right? Because I even talked to a female client my same age, 54, two weeks ago. And she said, “But I’m not going to lose out on return, right? I’m still going to make money.” She was saying, she always thought about, all right, make money in this one pocket. She didn’t use the pocket, but make money and then give it away. So I think even people who would like to invest this way, we need to open their eyes that this exists.
Janine Firpo (25:29):
I totally agree. So it’s actually been around for a while and here’s the great thing. In Invest for Better, in addition to running the circles, we also have guest speakers who come on twice a month. And last month we had a woman named Amy Domini, who you may or may not have heard of before, but Amy has been involved in this space for over 30 years. She created the first socially responsible index. Her firm, Domini Investments provided some of the earliest funds. And this is what’s so cool, so we interviewed her, we had her speak and she started out, the first words out of her mouth almost were, “I want to thank and acknowledge all the other women who helped me build this industry.” And she started naming all these other women. And the thing that’s really interesting is that women have led the way around this investing for quite a long time.
Janine Firpo (26:25):
So there has been from the get go pushback around this issue of financial return and giving up financial return. And what I’m finding is that as the interest in ESG, Environmental, Social, and Governance, criteria on stock portfolios in particular is heating up, I’m seeing more and more backlash. I’m seeing more and more articles from certain publications saying, “this is all nonsense. You’re wasting your time and energy. You’re not really going to have a difference or an impact. You’re going to give up financial returns.” In fact, I saw one article recently that talked about the loss of financial returns. They were talking about two basis points, which for those of you who don’t know a basis point is 100th of 1%. It’s ridiculously small and almost meaningless. You could have a difference of base of a 100 basis points in fee structures.
Janine Firpo (27:28):
So a two-basis-point difference is not a difference from my perspective. But we’re seeing pushback because more and more money is moving into this, and some people are concerned about that. But there have been so many studies and I talk about some of them in the book and I list even more on the website. So many studies that show when you invest sustainably, you not only don’t give up financial return, but you can actually outperform. And that has been my personal experience as well.
Stephanie McCullough (28:02):
So you mentioned personal experience, tell us about your journey to the point where you are today, where you’re putting every single one of your dollars into values-aligned… You didn’t start that way, right?
Janine Firpo (28:13):
No, I did. But what happened was I’ve had a couple of careers in my life, which I think a lot of people will end up doing. And the second career I had was around the role that technology and business thinking could play in solving problems of poverty. And I did that for about 20 years on the international stage, while I was based out of San Francisco. So I lived here, but telecommuted and traveled around the world to do my work. And as a result, I was part of a lot of the conversations in the Bay Area around what has become known as impact investing. About 10 years ago, I was in a conference and I realized, I made these huge changes in my life to do work that mattered to me, to do work that I thought could create change in the world.
Janine Firpo (29:05):
I took pay cuts, I worked harder. And my money is working against me, it’s not keeping pace with the rest of the way I live my life, and I don’t want that anymore. And even though I was not the person who was involved in those conversations at that time, i.e extremely high net wealth or a foundation or institutional investor. I made a personal commitment to figure out how to do this with my own money. And I started out with financial advisors because I was super busy. I didn’t have the time to think about this myself. And they got me part the way they are. I actually had three different financial advisors, and I tell that story in the book, where they failed me, how I then found the next one. But as I told you that story about cash earlier, I realized they’re not going to get me where I want.
Janine Firpo (29:57):
And so when I retired four years ago, I started doing this a lot more myself. It’s been a wonderful journey, I’ve learned so much, I’ve met so many other great people and I feel super good about where my money is. I’m not finished yet. I’m still exploring and learning. And I’m waiting for opportune times to get out of certain investments that have significant capital gain in them, because I’m not stupid. I’m not like, “I’m going to go ho hog on this and just give away a lot of money in the process, through taxes and other things.” So I’m thinking about ways that I can do this thoughtfully.
Kevin Gaines (30:38):
Since you’ve been doing this for a while, how have you seen changes in the landscape more along the lines of availability of options?
Janine Firpo (30:48):
I think they’re growing, they’re definitely growing. So if you think about the public markets, which is where most people are, your choices in the stock market are significant. That is both a good thing and a bad thing. Two of the bad things are one, it can be really hard to figure out, “okay, then of all this choice, what do I choose?” So that’s a homework assignment. But the other thing that’s worse is, there’s a lot of what’s known as greenwashing going on. So what that means is there are a lot of companies now who see this trend, and so they’re wanting to get in on it. They’re creating product that they say are green or environmentally sustainable, or have different high Environmental, Social, and Governance factors in the companies and in the fund, and aren’t really that. So the good news is that there are some great tools online, and I even have a video teaching you how to use one of them called As You Sow, Invest Your Values, that you can go onto this website.
Janine Firpo (31:53):
You just Google As You Sow Invest Your Values, and you put a ticker, the name of your stock fund, or the stock symbol, the five letter symbol, the ticker into a search box and lo and behold, it will tell you how that particular fund ranks, in terms of fossil fuels, gender equity, prison, weapons, military equipment, palm oil. There are seven different factors that it looks at and it gets explicit. It tells you exactly the companies that fund is invested in. It tells you that are against that particular lens. It tells you what percent of the fund is invested that way. And it’s a great tool also to help you search for better funds. So I explain how to do all of that in my video, that you can find on the Activate Your Money YouTube channel.
Stephanie McCullough (32:55):
That’s great. I’ve seen that too, the proliferation of options. I’ve had clients for 10 years now who want to invest this way, in the beginning I could just research it myself. But we just recently this past, what couple months ago, invested in a research and reporting tool for advisors on this. Because there’s just so many options now, so we’re able to look at all these different factors and say, okay, it says sustainable or green technology, is it really? Or whatever the client’s particular values might be, right? We don’t judge. Everyone has their own priorities and that’s the catch-22 as well. Right? You can pick your own priorities, which is excellent. You can get pretty custom. And that means you’ve got to do more research and search through more options.
Janine Firpo (33:38):
Exactly. And that’s why these clubs are great because the clubs can help you do that research. There are also options in fixed income. And one of the things that I have gotten into in the fixed income bucket, that I didn’t even really think about as an option before doing the book, is I now have an advisor who’s building me my own bond fund. So she’s basically taken some money from me, and she is buying individual bonds for me, both municipal bonds and corporate bonds that are values aligned. And I didn’t even know that was a thing before. So what you’re saying in terms of financial advisors, I think is really important. If somebody has a financial advisor, they should be able to lean on that person or that firm to do this work for them. And if that person or firm won’t, or if that person or firm says, as one of my friends just told me, hers told her, “Oh, don’t do that. That’s a very dangerous way to invest your money. Very dangerous, very dangerous.”
Janine Firpo (34:41):
If that’s the kind of reaction you’re getting when you go to your financial advisor, go find a new financial advisor. I actually have a whole chapter in the book about this, like what should a financial advisor be doing for you? How do you find one? How do you break up with one? Because breaking up with a financial advisor or a CPA, I give an example of how I did that with my CPA, it doesn’t feel good. When you have been working with some, it’s always hard to say goodbye, you’re not serving me well anymore, or I just want something different or whatever. So making the decision to say, this is what I want, and I’m going to go am somebody who will offer this to me, and I give you resources where you can find socially aligned financial advisors. You can do that. You can leave. You can find somebody who gets you, who listens to you, who makes you feel heard. And here’s the thing, who makes you, who educates you.
Stephanie McCullough (35:41):
Yes.
Janine Firpo (35:42):
I think that’s an important job of financial advisors, and I think many of them don’t see that as their job, but I think educating yourself and having your advisor educate you are really important.
Stephanie McCullough (35:55):
Well, in my experience, it’s almost more difficult for people who’ve already had a financial advisor and they’ve had an experience, because they assume that all advisors are the same way. Whereas I love the point that you make there, saying you first need to get clear on what you want this advisor to do for you. What kind of services? And you’ve even got a little chart of the different services that advisor could conceivably do. We have conversations with people and we’ll say, “Oh, you know what? Sounds like you need someone that’s a different expertise than we are. Here’s some other names of people we know who are reputable, who might be a better fit.” So there are lots of different ways that advisors work.
Janine Firpo (36:31):
That’s absolutely true. And one of the things that I do in the chapter is provide you with a downloadable set of questions that you can use to interview advisors. And I’m taking my own advice right now, because I’m looking for a new advisor. So I’m going through the process myself.
Kevin Gaines (36:51):
For the record, Stephanie and I both just put up our hands.
Janine Firpo (36:53):
Yeah.
Kevin Gaines (36:55):
Volunteering out of the goodness of our hearts to…
Janine Firpo (36:58):
Actually, to be honest with you, I also have found, and I know advisors don’t like this, but I’m using a couple of advisors. So what I have found is different advisors are good at different things, right?
Stephanie McCullough (37:13):
Yeah.
Kevin Gaines (37:13):
Absolutely.
Janine Firpo (37:14):
And so, because I am a bit of a DIY person, I am able to oversee my entire portfolio myself, but like this one woman I talked about earlier, she’s great with bonds. So I’m giving her my fixed income stuff and I’m saying, “Okay, you go there. This is how much I want to put into fixed income. Take it. Let’s talk about it. Handle that for me.” I think the public equity side, I’m going to just handle myself, because once I put my money into the funds that they’re in, I don’t need a lot more there. I am invested in private investments, I’m invested in alternatives. And so I have an advisor who’s good at that and helping me find some of that. And I just want to speak to that for a minute, because private investing is an area that women in particular don’t really think about.
Janine Firpo (38:10):
When we get financial advice, we tend to be told to invest in fixed income and stock, that’s it, right? We’re never taught about venture or angel investing or private equity or private debt, or the fact that you can do that either directly in businesses that you care about and do it with other people, or you can do it through funds. And those kinds of investments are riskier for sure. But they also have the potential for much greater upside than traditional investments. And so for women who have the capital and who have the interest, these can be great other ways to invest a relatively small portion of their total portfolio, right? In the book, I talk about five to 10% as a max there, unless… I’m doing more. I’m doing more because I’ve been doing it enough, and because I’ve built enough confidence about it.
Janine Firpo (39:13):
But I started teeny tiny when I was playing around with these alternatives. But I’ve done it now for 10 years. So I’m like, “You know what? Those are kind of good. They’re working for me. So I think I’ll put a little more over there.” So I think it’s important for particularly women who have a little bit more capital to think about these other asset classes because they diversify your portfolio and they can also be super fun. Particular angel investing with other women and investing in women. So, fun and sad fact, if you look at all the venture capital that was invested in the United States in 2020, only 2.2% went to female CEOs.
Stephanie McCullough (39:56):
Yeah.
Janine Firpo (39:58):
And it’s even worse for women of color, 2.2%. So what that means is that women who are starting businesses can’t raise the capital they need, which is part of the reason why women’s businesses are smaller, which they get dinged for a lot. So we need women who have the interest, appetite, and assets to invest this way, to step up and start investing in other women. I think it’s really important, and it’s super fun.
Stephanie McCullough (40:32):
I love that. So one last question, before we wrap up and of course we could talk all day, but again, you’ve touched on so many things you could do in the book, but I want to come back to the idea that some is better than none and baby steps are okay.
Janine Firpo (40:46):
Absolutely. Yeah. So first of all, as I said earlier, this is a team sport, right? This is a marathon and not a sprint. So as you think about this thing, don’t look for the one to five simple things you can do now, and then never have to look at your money again. Realize this is a thing that you’re going to learn and you’re going to get better at over the course of your life. And you are going to teach your daughters and your sons how to do this too, because I would love to see those of us who are female adults be the last generations who are NOT smart, confident investors, so let’s learn to pass it on. And then the other thing is start small and experiment. When I started, I didn’t necessarily trust that values-aligned investments would do as well as non-value aligned investments.
Janine Firpo (41:41):
So I held a very typical index fund, Vanguard Total Stock Market Index, VTSAX. And I bought a Vanguard values aligned fund that was very similar to VTSAX, and I owned them both. And I was like, “Hmm, that other one is doing better.” ESGV doing better than VTSAX, very interesting. So start small and experiment. Take it at your own pace. You are not in a race. You do not have to get this all done immediately. I’ve been at this for years. We will continue to be at it for years. It’s okay. If we realize that it is just a fun project and we look at it that way, then it’s not something we have to stress about.
Stephanie McCullough (42:37):
Excellent. Well, Janine, thanks so much for being here. Tell us again where people can find and follow you.
Janine Firpo (42:42):
Sure. So there are several places. So the first thing people can do is buy the book, Activate Your Money: Invest to Grow Your Wealth and Build a Better World, you can find that anywhere, any online book seller, it’s in some bookstores as well. You can take a look at my website, activateyourmoney.net. You can follow me on my YouTube channel, LinkedIn, Twitter. I’m on all of those places. I’m @janinefirpo on Twitter. I’m Janine Firpo on LinkedIn. Those are all places that you can find this information and follow me or Invest for Better, of course, as well, investforbetter.org. We’re a nonprofit organization.
Stephanie McCullough (43:20):
Excellent. We’ll have all those links for you in the show notes, in case you’re at walking your dog or driving to work.
Janine Firpo (43:25):
Great.
Kevin Gaines (43:26):
The Invest for Better, that’s where you find the circles either in existence or to get your own started up, correct?
Janine Firpo (43:33):
Join. Exactly. To join a circle, start your own circle, and to learn this information and community with other women. Yes.
Kevin Gaines (43:41):
Great.
Stephanie McCullough (43:41):
Awesome. I love the group learning idea. Thank you, Janine.
Janine Firpo (43:45):
Thank you both so much. I really appreciate the opportunity to talk to you and your audience.
Stephanie McCullough (43:51):
Absolutely.
Kevin Gaines (43:51):
Appreciate your time. I got to say that’s a lot of ground she’s covering with this book. Normally when we’re talking to people, there’s one or two things that we’re talking about, but with Janine it’s, I hate to sound like a cliche, but it’s a lifestyle.
Stephanie McCullough (44:14):
Yeah.
Kevin Gaines (44:15):
She talks about, it’s not just do that or do this, it’s be it.
Stephanie McCullough (44:21):
Yeah.
Kevin Gaines (44:21):
Don’t just try one or two things. If you’re going to do it, do it. And she’s going to walk you through things to think about in all the different aspects that finances touch in your life.
Stephanie McCullough (44:35):
Well, and she’s been doing it for 30 years, as she mentioned, she’s been studying it too. Not just investing her money, but studying it and learning along the way. And then this whole collaboration with all the women who helped her write the book, both on the financial expert side and everyday person reading it side. So I think she did a masterful job, and that’s why when I met her, I was like, “Ooh, we have to have her on the podcast for sure.” Because she covers a lot of areas that other people don’t cover like your whole conversation about cash and the banks.
Kevin Gaines (45:04):
Right. And normally when we’re doing this show, as we’re doing the recap, there’s a couple little points we want to hit that really made an impact on us. But again, it was the whole conversation that paid an impact on me, thinking of just doing a lifestyle, not siloing, everything. Getting everything integrated, so it’s all working for one direction.
Stephanie McCullough (45:26):
Yep.
Kevin Gaines (45:27):
However, that being said, there was one or two things that did stand out to me. And the one thing she said was towards the end, that I think was extremely important, was starting small.
Stephanie McCullough (45:39):
Yeah.
Kevin Gaines (45:39):
Now she was talking about private investment, but this can apply to many things in investing, because you and I have seen this, that people get excited about doing something and they rush in and mistakes get made. It’s inevitable, we’re human. We’re going to make mistakes. So why risk making a mistake with a 100% of your money? Start small, learn about it, figure out what you do right, figure out what’s wrong, figure out what you like and don’t like. And then from there you can build on top of that.
Stephanie McCullough (46:13):
She covers all the different asset classes and ways we use our money and you don’t have to start with all of them at once. Start with the one area, like she said, it is one more thing to pile on all of the obligations that we have as women. But if you can find one way, make a change, feel better about it, then there’s that many more dollars going towards improving the world. But I also liked your point about it being a team sport. She mentioned that several times that, that’s why she had focused on this Invest for Better nonprofit, about learning in circles. Women learning together, sharing the load of doing the due diligence, doing the research, finding like-minded people and then sharing your learnings among each other is a way to accelerate your progress.
Kevin Gaines (47:00):
Right. Along those lines, she also said something that many of us advisors will admit to very few, advertise the fact sadly, is not every advisor can do every thing.
Stephanie McCullough (47:15):
Yeah.
Kevin Gaines (47:16):
If you’re dealing with an advisor who’s honest with themselves, they’ll be able to tell you, I’m not good at that. Or that’s not something I think about very much, however, this stuff I do think about.
Stephanie McCullough (47:28):
Yep. So it’s a great book. There’s a lot of good resources on their website too, if you don’t feel like going out and reading a whole book, right? Activateyourmoney.net, we’ll have all the links in the show notes. But I really think if this is an area that you are interested in or maybe that you’ve been thinking about for a while, maybe your bank has been in the headlines for all the wrong reasons and you’re thinking, “Ugh, I’d really like to ditch those guys and find someone else. How do I find another bank that I like better?” She’s got lots of great resources in there for those kinds of research projects. Thanks for being with us. We’re excited to continue this conversation. We’ll talk to you next time. It’s goodbye from me.
Kevin Gaines (48:05):
And it’s goodbye from her.
Stephanie McCullough (48:10):
Be sure to subscribe to the show and please share it with your friends. Show notes and more information available at takebackretirement.com. Huge thanks for the original music by the one and only, Raymond Loewy through New Math in New York. See you next time.
Disclaimer (48:24):
Investment advice offered through private advisor group, LLC, a registered investment advisor. Private advisor group, American Financial Management Group, and Sofia Financial are separate entities. The opinions voiced in this material, are for general information only and are not intended to provide specific advice, or recommendations for any individual security. To determine which investments may be appropriate for you, consult your financial advisor, prior to investing. This information is not intended to be substitute for individualized tax advice. Please consult your tax advisor regarding your specific situation.