Afford Anything - This Year’s Financial Reckoning, with Farnoosh Torabi

Episode Date: July 28, 2020

#267: This week, one of the most acclaimed names in the world of personal finance journalism joins us to reflect on the events of 2020. Farnoosh Torabi started covering personal finance in 2003 as a reporter for Money Magazine. She later became a correspondent for Jim Cramer's The Street and the host of CNBC's primetime show Follow the Leader. She's the host of the award-winning So Money podcast and the author of several bestselling personal finance books, including When She Makes More: 10 Rules for Breadwinning Women. She's a contributing editor to NextAdvisor, a personal finance platform in partnership with TIME, as well as a financial columnist to O, The Oprah Magazine and a contributing editor for Bloomberg Business. She joins us to discuss how the events of 2020 have led to a great financial reckoning. You'll enjoy this if: - You want to hear candid discussion about race, privilege, and the wealth chasm - You're curious to hear about how the personal finance landscape has changed in the last two decades - You're wondering if, in fact, "this time it's different" For more information, visit the show notes at https://affordanything.com/episode267 Learn more about your ad choices. Visit podcastchoices.com/adchoices

You can afford anything, but not everything. Every choice that you make carries a trade-off. And that doesn't just apply to how you spend your money. It applies to how you spend anything. Your time, your focus, your attention, your energy. Every yes to something is an implicit no to something else, and that leads to two questions. First, what matters most to you? And second, how do you make daily decisions that reflect that which matters most?

Answering these two questions is a lifetime practice, and that's what this podcast is. here to explore. My name is Paula Pant. I am the host of the Afford Anything podcast, and today, my friend, the brilliant Farnush Tarabi, joins us. Farnush is the host of one of the most popular personal finance podcasts in the world of podcasting. It's called the So Money podcast. And it's an award-winning podcast with excellent guests. She has been covering personal finance as a journalist. For nearly two decades, she has a master's in journalism from Columbia University, and she started her career 17 years ago as a reporter for Money Magazine. After that, she became a financial correspondent for Jim Kramer's The Street

and then joined Yahoo Finance to host a weekly video series called Financially Fit. She's the author of many books, including When She Makes More, which is a book about breadwinning women, households in which women out-earn their partners. She hosted CNBC's primetime show, Follow the Leader. She is a contributing editor at Oprah Magazine. She is the newest opinion columnist for Bloomberg Business. And she is a contributing editor at Next Advisor, a personal finance platform made in partnership with time.

In short, she knows the world of personal finance inside and out, and she is here today to talk about the events of 2020 and why this year is a real reckoning. Here she is, Farnush Tarabi. Hi, Farnoosh. Hi, Paula. How are you? I'm excellent. How are you doing? Doing good, my friend. Just moved in a pandemic. So, no big deal. Well, is there something going on in the year 2020? I hadn't noticed. What isn't going on in the year 2020? Right question. Exactly. Farnoosh, you've been reporting on personal finance since you joined Money Magazine in 2003. In two decades of covering this world, what changes have you seen? seen? What evolution have you seen? So much. Well, I would say, firstly, it's who's telling the stories and who's providing the advice. That's definitely changed where I think when I started it was,

it felt like it was a lot of men, white men, giving us financial advice. The idea of who could be an expert has also evolved, where in order to be in a position to give advice that would get printed in say a Money Magazine, you had to be a CFP or an accountant or Susie Orman. And so our sense of who we should trust and we can trust has evolved. And that's a good thing. I think it's really what it has created is an environment that is more inclusive, that is more welcoming to people. I was just interviewing Julie Alma Taveras, who is the founder of investing Latina. She runs a YouTube. and Instagram helping fellow female Latinas learn about investing and money.

And we were talking just kind of about this. You know, 20 years ago, there were absolutely zero, I think. I'm guessing, like women who were like Julie, who were giving financial advice to other Latino women. And because like even today, we were trying to count like how many people are out there with this platform that she has. And we counted like a dozen maybe. So I think that it's become more multicultural.

I think also the definition of what is the pursuit of financial freedom or what rich means to us has evolved also. And looking back again to when I was first covering this space, there were a lot of books and articles like, these are the five absolute things that you must do in order to achieve financial success. And I think that those rules are no longer so hard and fast, and they're not so few. We're encouraging everybody now to develop their own personal path, their own personal sense of financial freedom. And again, that goes back to all the different new voices that are in the space, giving advice and sharing their stories. I think social media has also completely changed the landscape where maybe the only way you could consume this information and learn about this

was to go to the library or go to a financial advisor or pick up Money Magazine. Now you can watch a YouTube video. You can follow someone's Instagram feed. You can listen to this podcast. And so I think that has also broadened the market and given people many more options for how they want to tap into this, which is also really important. I think we're educating more people as a result. Absolutely.

You were covering personal finance through the bull run of 2003 through 2007. or eight. You were already in it when the Great Recession struck. Did you notice any big shifts during the last recession? And is history repeating itself now? There were some changes that I saw immediately after the recession that I thought were positive that I hoped would last. But then, of course, what happened was we had an 11-year bull market. So a lot of us went back to the spending habits that we had and sort of this inflated the sense of real estate, how in order to to be wealthy, you have to invest in real estate. And we kind of lost some perspective.

But what did change forever, which was good, was the discourse around money. People were suddenly more open to talking about money and their challenges with money. Whereas before the recession, I think even though I felt like I was helping to open up that conversation and I had books and all the things, but there was still this resistance that I was sensing from the population, which was that, you know, money is taboo. We don't talk about money. And then the recession happened. And I think that was a real equalizer in some ways in the sense that many, many people lost their jobs. Many people lost their homes. And we all felt this camaraderie around financial despair. And that opened up a lot of the floodgates.

And people were now talking about money in a way that, was, I thought, really healthy to kind of get it all out there. And then we also saw through that time frame, many people rise to become the voices of the next generation, the financial voices of the next generation, people who rose from the ashes, who experienced foreclosure, experienced job loss, experienced bankruptcy. And in the years following the recession, we're able to pick themselves up and then took us on that journey and are now the ones who we follow as our, financial leaders. And so everyday people were becoming the go-to financial experts of our time. I think there's something cool about that. And we're seeing that repeat again now where I think

we're going to have even more people emerging from this recession slash pandemic as sort of like the financial victors. And we want to learn from them. And those are the people that I think are going to be able to have a platform and have a community around that. But to your question, I think some things are different this time that are, we have the double whammy of the recession and the health crisis. So whereas the last recession didn't feel very life or death, like this time around our health is very, like of the utmost. Of course, you went through COVID and you know, like, you can get very close to feeling what it might, I mean, for the first time, I'm like, I need to update my will. I need to make sure I have enough insurance. Like I'm having these really, I go to these dark places

because that's just the reality of the world we live in. And I don't know how easy it is to forget. I almost think that for us, this is like what the Great Depression was for our ancestors, hopefully not as prolonged and not as devastating, but this sense that a lot of the people who survived the Depression, that generation was classified as being like these super savers, then their children in retaliation.

where it became sort of like the spenders. And there's going to be a little bit of that. There's going to be a little bit of a culture that comes out of this where people feel afraid to spend money. I hear it now from people writing in to my podcast and saying, I have a job. I have money. I have a he lock. And I was planning to renovate my kitchen. I just feel like I really shouldn't do it, though.

And I think they're looking for permission to spend. Like the fear right now that is wrapped up in all of us is going to be really hard to unwind. I don't want to sound pessimistic, but I just think this is different than last time. This is one emotional difference that I'm experiencing from my listeners, even myself. Like, I'm up at night wondering, should I change my portfolio allocation? You know? And I did. Honestly, I changed it because it was way too, I was way too exposed to stock.

I use one of those automated platforms. They had me 80% in the stock market. And I'm like, I'm 40. I have two kids. I'm the breadwinner. I think we can dial this back a little bit. And I think given what's happening, market conditions, macroeconomic, I'm like, I'm going to go use my own advice, which is take 100, subtract your age.

And that's roughly where you should be, your stock allocation should be. So I dial it back to 60. And I feel much better about that. But I probably wouldn't have had that moment if it wasn't. because of what we're going through. What was it about this recession as opposed to the last one that triggered staying up at night and causing you to rethink your asset allocation? Well, I have more people depending on me right now, Paula.

You know, last recession, I didn't have kids and wasn't married. I wasn't the breadwinner in my relationship. I didn't have the mortgage that I do. I also wasn't closer to death. And I had more time. Look, I'm 40. I'm hopefully going to be here on this point. for another 60 years, but one thing that I've learned is that recessions are cyclical.

This won't be my last recession. This probably won't be our last pandemic. So while, yes, I think that, look, I didn't take all my money out of the market. That would have been silly. But I made a smart reassessment for where I am in my life, for what my goals are, and my risk tolerance. I think that's something that I don't think anyone can disagree with that. I think that I was caught up in that kind of like don't do anything.

And then I didn't do anything. And then that really freaked me out when I sat up thinking one night, like, would I actually be okay if in September when our country has fallen off the financial cliff, which a lot of people are predicting that like my portfolio drops by 50%. Would I be okay with that? I would not because I don't want to wait 20 years to get to 60%. I don't think I want 20 years of that. I mean, I think that a pandemic is more likely than an 11-year bull run.

What we experienced in the last 10 years is very rare, rarer than a pandemic. So the likelihood of, you know, a pandemic happening than another 11-year bull run is what I'm betting on. You've been trained and worked as a traditional journalist. traditional journalism, the classic school of thought is to take yourself out of the story. But as we've sort of touched on, what we're seeing more and more now is that the voices inside of the world of personal finance are voices that are sharing their stories. To what extent should the voices in the personal finance community speak from their own perspective? And to what extent should we take those lessons from the world of traditional journalism that says be the narrator, be the observer? That's a good question. I was trained as a journalist. You're right. Even to this day, a lot of how I present my narrative is rooted in journalism. And what I mean by that, it's rooted in facts, firstly. And then my story provides color and some context and some levity to what may be an otherwise dry topic. And I think that's kind of the good balance. I like to think I think I really pride myself on that.

Whereas I think there's definitely a breed of financial advice, which is all just, here's what I did. Right. And you have to take all of that only to some, you know, with a grain of salt a little bit, because that's not going to be something that everybody can do. And it sometimes may not be the correct thing to do. It worked for that person. But, you know, when you're talking about money, which is very serious and you don't want people to lose money because they followed advice that was, incorrect or poorly presented, you have to really take this with a lot of responsibility. And so if you are that person who's just sharing the advice from your perspective, that's fine.

But I think that's important to just make that clear that you're not presenting this as how everyone should do it or that this is the definitive way to do something, that you're just sharing your story because it is for this reason why certified financial professionals have to go through rigorous exams and rigorous licensing and rigorous oversight because we're talking about people's money. You know, you don't, you want to make sure that if you're certified, that you're kind of following certain rules on a playbook because you don't want to get in an area where you're confusing people or you're misguiding people. So it's a delicate balance. For me, the time, topic is so dry, you have to make it exciting. And sometimes something as little as like telling people

how you did it is what draws them in. You also want to bring in research. You want to bring in data. You want to bring in other people's perspectives as well. So that's how I've always approached it. It's kind of a blend of journalism and the personal voice. That reminds me of the shape of a news article, the anecdotal intro that then opens into facts and reporting on the broader context. How do we talk about issues related to people of color in the world of personal finance? How do we discuss that without overgeneralizing? Well, I just finished an episode series called Black Wealth Matters on my podcast, So Money. And you interviewed Queen Latifah, which was amazing.

I interviewed Queen Latifah. So I'll tell you some of the things that they shared with me as far as how they would like to see the financial advice landscape evolve and some of the things that we as advice givers do that it can feel uninviting or not inclusive. So it's firstly really important to just make sure that if you are, let's say let's talk about it from the journalist's perspective. Like if you're writing an article about real estate that you make sure that the voices that are being heard in that piece represent the world, the world that we live in. So it's not all men, it's not all women and it's not all, you know, white people that you have a wide range of sources that you're bringing to the forefront and saying here's what these people think. And because at the end of the day, and I've heard this over and over, whether you're Latina, you're black, you're Iranian, I know you're Nepalese American. So like it's one thing to be told you can do something. It's another to see someone who looks like you doing that thing. Right. Or sharing that

advice. So representation is of the utmost. And we need to have that representation in all realms, in articles, on panels, authors, YouTubers, like everybody who's giving this information, giving this advice or being profiled, we need representation more representation. One thing that I have said in the past in sharing my own narrative, and I know a lot of people do this. And it's not, it was never intended to be said in a way that was undermining, but I would say things like, if I can do it, so can you. That's a general statement that I think a lot of us who say that, our intention is to just actually kind of sound a little bit humbling, like a little humble, like, hey, like I came from nothing, so if I can do it,

so can you. But to someone who's listening to that, who doesn't share your skin color, who has to, unfortunately, fight racism as a daily practice, that can fall on deaf ears and that can be actually a little insulting because you're not acknowledging that there's a whole group of people that may be listening to you that, no, maybe they can't do it the way that you did. So we just have to be careful in how we shape and form our narratives, especially when we're talking to large groups of people. Maybe it's better to say, here's how I did it. I know that this isn't the path that everybody can follow, but I hope that it would be inspiration.

And then from there, like, invite other people to share their stories and make it more of a conversation. I think there's also something to be said about the words that we use in characterizing things like racial wealth gap. I'm also learning Paula that words matter. This term that we always throw around like the racial wealth gap, for example, a guest on my Black Wealth Matter series suggested that we change the name because it's not really illustrating the depths of tragedy. You know, that is the actual gap. It's not really a gap.

It's a tasm. Is there even a word for it? I don't know. But, you know, just to put it in context, there was a new Northwestern study that found that on average for every dollar of. of accumulated wealth that a white family has, a black family has just one penny. So is that a gap?

I don't know. That feels like a lot more severe to me. In our culture, we think of gaps, we think of minding gaps. We don't think of like building these monstrous bridges, which is really what this takes over this particular gap. And so, yeah,

it was Jamie Rose on my podcast who came on the show. He's a founder of a company called Of Color. And he was like, I just have a real problem with this phrase. And words matter. So maybe we should think about changing that. And he said, like I say this sort of tongue in cheek, but we should call it the pestilent cavity of economic apartheid. Because that's where we are. We're in economic apartheid. So maybe we should rethink some of our language. You're right. When you hear the word gap, you think of that tiny little gap on the subway platform. Mm-hmm. I'm just going to hop over it. Right. It's going to take more than that. We're seeing already, like, some words just being canceled. Like, I just learned that the term master bedroom, Paula, actually dates back to slavery. So master, obviously being, you know, the master of a slave, that the biggest bedroom in your house is usually described as a master bedroom. Well, some real estate agents and real estate companies are removing that word from all. of their listings because they don't want to trigger any, you know, and they just think it's like a dated word and no longer serves a place in our society today. So I think words matter. And I think that that's something that I'm becoming more conscious about in my writing and in how I think

about storytelling. I've been recently writing for NextAdvisor.com, which is a new platform, financial platform powered by Time magazine. And we're really interested in bringing more of these multicultural voices to the forefront. And I've got an article going up soon about the top things I learned about race and money interviewing all these experts for a month on my show. I don't want to make it just a month. As soon as that was done, I was still interviewing a lot of people of color on the show. It's just a conscious commitment now.

It's one thing to have been inclusive, which I like to. to think that I was in promoting diversity on the show, but it's another to actually be anti-racist and try to make these active investments in my time, in my money, in my platform to advancing this movement, which is so important. With regard to representation, is the issue, and I don't, even though I'm going to phrase this as an either-or, I don't mean to really imply that it's an either or, but is the issue the identity of the people who are speaking insofar as traditionally that identity has been very white and male? Or is the issue the assumed identity of the listener in so far as, or the assumed identity of the audience member, insofar as oftentimes as people talk,

they provide education or advice predicated on the premise that, the person who is receiving that advice is white and male? Well, I've never been in those rooms where there was like a decision made about, well, we're going to have this person give the talk because they're white. And that's what the majority of our listeners. I think, you know, the United States, this is a country that is predominantly white. And with that, the mistake has been that we're going to just bring these white voices to the forefront.

because it is true. People want to hear from people who look like them, that there's like an inherent trust. But our country has over the years increasingly become more diverse. It's not, you know, the 1800s anymore. We have people from all over the world coming here. It would behoove us to make sure that the people who are giving advice represent that. But I know that also when you have people of color in boardrooms,

and in meetings and people in charge and leadership, it's a win-win for everybody because they're going to bring ideas to the table that have never been explored and will never have been implemented otherwise. And it's to the benefit of everyone who's on the receiving end of their services, of their decision-making, of all of their products, of everything. And so I think diversity is a win-win for everybody. I don't know if it's the chicken or the egg to your question, of which came first, I think there's a tendency to feel like we just want to speak to the widest. We can't speak to everybody, but let's speak to whoever is the majority. And if the majority is white, well, then that's, well, there you go.

Right. Exactly. Can't win them all as the expression has gone, you know. Right. Well, try harder. Yes, and then that does become the challenge is there's that temptation to speak to the majority or the assumed majority. And then there's also the not wanting to be pigeonholed. I mean, I've often felt this.

I've never wanted to be pigeonholed as a female podcaster or as a person of color podcaster. And there is the risk of diversity being otherized. You know, so the challenge becomes, how do you balance both? Yeah, you just be you, Paula, and I'll be me. And I think that our work will be received in the way that it is received. but it's important for us to keep being out there. We don't have to disclaim every episode of it. We don't have to introduce ourselves as if we don't want to.

I don't know. It's really to each their own. But at the end of the day, I just want more visibility of, I want more representation. People don't have to read your bio to know that you're a woman, you know, or they just see you and they know.

Maybe they don't know that your, your ethnicity. And maybe that, you know, I have gotten, But, you know, it's interesting. You can't win this and make everybody happy with whatever you decide to do. Like I have sometimes omitted that I'm an Iranian-American in my bio. And some people are like, oh, are you ashamed of that? Like, what's going on there? And I'm like, I honestly don't know why I didn't put it in there. Like sometimes it is, sometimes it isn't. You know, it just sort of depends on

the amount of space we had to write it. And also the relevance. Like if I'm speaking to an audience, that is interested in that, then we'll talk about it. But if it's not interesting context, I don't know. I don't know what the right answer to that is. It's never intentional, whatever it is, you know. Some people expect you to be right out, like they want that to be the first thing you say. I'm a woman. I'm Iranian-American.

And I get it because maybe it's a marginalized community or they just feel like we need more representation. but to your point, I want to be recognized as a person who has a lot of attributes, not just because, you know, I'm a female. We'll come back to this episode after this word from our sponsors. Fifth Third Bank's commercial payments are fast and efficient, but they're not just fast and efficient. They're also powered by the latest in payments technology built to evolve with your business. Fifth Third Bank has the big bank muscle to handle payments for businesses of any size. But they also have the fintech hustle that got them named one of America's most innovative companies by Fortune magazine. That's what being a fifth third better is all about.

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Sale ends December 7th. You mentioned at the beginning of this conversation that money used to be a taboo topic and it is gradually becoming less taboo. In that same regard, politics, particularly in the world of personal finance, has historically been a fairly taboo topic. Especially this year, especially in the first six months of 2020, more people in the world of personal finance are now openly discussing politics than certainly than anything that I've seen in the last decade.

Do you think that this is a positive thing and do you think that this will continue? I think to the extent that we can talk about policies and implementing rules and laws that can help people further their personal economies to further their financial literacy, I think that sometimes that gets bucketed as a political issue, whereas I don't see it as a political issue. It's not a party issue. It's not, you said it beautifully on my podcast when you were on that like there's political and there's partisan where we assume that because you're talking about something that's political, that it's inherently divisive, that there's going to be someone who agrees with you and someone who disagrees. But like at the end of the day, for me, political means policy. policies have to change. There are certain things in our system, in our financial institutions,

in our government, in the way schools are run that are not equitable for everybody. And we need to change those rules. We need to change those policies. So yes, those are political issues. But to deny that those policies, those political issues do not impact your bottom line is not true. If you are going to a school where there is no financial literacy, but down the road, in the richer neighborhood, they are teaching those white kids about compound interest and how the stock market works and how to write a check. How is that not a problem for you? That you don't want to talk about that, that doesn't come up in the natural conversation you might be happening about the importance of financial literacy in this country. that's a very small example, but that is happening right now in this country. And so whether you're talking about financial literacy or access to things like health care

and access to things like FDIC insured bank accounts in your neighborhood, those are areas for improvement. And we need to realize that financial independence, yes, a lot of it comes down to your moves and your decisions and your mindset and all the things that we talk about. But there's an aspect to your success that also hinges on the policies in this country. If you haven't been impacted by those policies, you're very privileged. But we can't really have a complete conversation about what it takes in this country to be financially successful without recognizing that policies matter. How do we encourage people to earn more and spend less in an environment where wages are low, the cost of basic necessities is high, the rigors of balancing work and family are stressful, and there is a racial wealth chasm?

How can we encourage people to earn more and or spend less without sounding out of touch? Well, I'm not saying that. To be clear, I'm telling people you got to do what you got to do to survive right now. Right. I'm not here with the woo-woo motivation. Like I think it's a very sobering time in our lives right now. And I think what I'm telling people, what I'm encouraging people to do is to take care of themselves, firstly, take care of your health. And secondly, ask for help, something that everybody can do, regardless of your race, regardless

of how wealthy or poor you are, using your voice to ask questions, to ask for help. There's no shame in that. Sometimes people feel like, oh, if I collect unemployment or if I ask my sister-in-law or my sister for money, like, you have to do what you have to do right now. and there's no shame in that. Everybody understands that everyone's hurting right now. Even if the person you're asking money from isn't hurting, like they understand. And what is happening to us is happening to us. We didn't do this to ourselves. We are all in reaction mode right now. And it's not fair. And it's, it really sucks.

So you just kind of have to, I was just speaking to a friend who wrote an article about what is your bare bones budget? if you may already be there right now listening, because you've already lost your job. So God bless you. But if you haven't lost your job, I encourage you to think about what it would take for you to just survive every month. What is your survival number?

And try to just do that for a while. And kind of imagine that the worst has already happened. Get yourself conditioned to that kind of spending and saving. This is not the time to be thinking. about how to have your best financial year ever. I mean, for some people, maybe, depending on your industry, this could be your best financial year ever. If you work at Zoom right now, maybe, you know, you're getting that raise.

But for a lot of us, it's really a year to reflect, a year to re-stratage, and to come to terms with some of the behaviors that we had been practicing that maybe we don't think or the best going forward, whether that was because we were overspending in some areas. We were not being strategic in our careers. This is a real reckoning for a lot of us. And so I'm not going out there with this like message of go out there and be your best self, your best financial self this year. I mean, because we associate that with going out there and like, you know, making big money

and doing it. It's like you need to rein in a little bit. bit maybe this year, you know, and just spend what you can save every penny. Yes, still, if you can go out there and ask for the raise, do it if you feel like it's appropriate because you've been kicking ass at work and your company's growing. But for a lot of us, it's just kind of like keeping status quo and plotting for next year and just trying to get ourselves in a better place so that if another rainy day happens and feels like there's so many things going on right now. It's not just the pandemic, but it's the recession.

It's there's this election that's coming up with so many uncertainties that you want to feel more in control of your situation. The best way to do that is just have money in the bank, save. Tell me about some of the work that you're doing for Next Advisor. You mentioned that one of the articles that you are writing that will be published soon, probably by the time this episode airs, it will have already been published, is an article about what you've learned from the Black wealth member. matters series that you did on your podcast. What are some of the other topics that you're covering? Next Advisor launched in June, and it is a new financial advice platform that's in partnership with Time Magazine. And they're launching with very specific topics that they want to tackle,

saving money, managing debt, building credit, and real estate. These were identified as sort of the four areas that just seem the most important right now for people. Real estate's a really interesting, as you know, category always. But I think now people are even more curious about where housing is going and people are moving a lot right now, whether they're renting or owning, but they're moving. There's a lot of migration happening, like people leaving New York or you're moving to New York. And so then, of course, like there's no category as you, as you, as you may have heard like splurging or investing. Like they're not, they're tired of,

they're starting with the times. You know, people are just, as I mentioned, like it's all about just saving and managing and keeping your roof on the house. I wrote a column. My first column there was about home buying. And I walked everybody through my family's recent home purchase, which was in the suburbs of New Jersey, leaving New York in a pandemic.

How did we do it? why did we decide to ultimately do this when there was a lot of uncertainty? I have to be honest, there were moments where we didn't know what we were going to do, feeling very unsettled in making any decisions because we would watch the stock market and it was down, you know, hundreds and hundreds and hundreds of points. And COVID was escalating. The cases were escalating. And so we just thought, was that really the time to be making like the biggest life purchase?

And yet we did. I want to say like, oh, we were so clever, but it was real luck because I think what motivated us was, while I didn't know what was going to happen, I knew that I had the financial capacity to make this move. Now, whether I was going to be buying at the height or at the low, like I didn't know. But then if this is my forever home, what does it really matter? And as long as I could make that monthly payment. and if I could make that monthly payment,

even if my income dropped dramatically or even if my husband lost his job, we kind of mapped out those worst-case scenarios and thought, if we buy a house now, how would that change our lives in these worst-case scenarios as opposed to rent continuing to rent, which would give us some arguably more mobility and we would have to pay property taxes and all of that.

So we thought about it real hard. not long, but we thought about it hard. And we pulled the trigger. And we're really happy that we did because had we waited to buy, we know that we would have had a lot more competition in this neighborhood because suddenly in May it was like a whole new dawn. People, we kind of knew where COVID was headed. We had a handle on it.

We were all taking safety measures. And whoever was standing and had a job was like, I need to get out of New York. York and come to New Jersey. So we didn't have that competition in March. And so we benefited from that lack of demand in ultimately landing on the offer that we did. Two months later, we would have probably not even been able to afford the house. Wow. So writing about that, I think to your earlier question about facts versus storytelling versus personal perspective, This story kind of gives it all. I interviewed experts in the story.

I brought in some data. But really, it was my story. But I think I also was keeping in mind that if someone's reading this and wants to make a decision for themselves as to whether to follow in my footsteps, more or less, like I wanted to give them some things to hold on to that were more solid than just like the one experience that this one person had me. You know, but like if you're going to do this, here's what you need to know based on some of the experts that are in this world much more than I am. Well, thank you for spending this time with us, Farnush. Are there any final key takeaways that you want to emphasize? Well, I just want to encourage everybody to hang in there.

And a reminder, if you have questions about money, I do the Ask Farnoche segments on Fridays on my podcast. So I'm looking forward to hearing from you who've got questions. I try to tackle people's questions often on the show. So that's a direct path to me and also on Instagram at Farnoosh Tarabi. We'll come back to this episode in just a minute. But first, thank you, Farnoosh. What are some of the key takeaways that we got from this conversation? Here are four.

Key takeaway number one. Control the things that you can control. There's a popular saying in the world of finance that the most dangerous words you can utter are this time it's different. And while there are classic principles or classic laws of personal finance, such as spend less than you earn, contribute regularly to retirement accounts, have an emergency fund, while those classic principles remain constant through any bull or bear cycle, it is certainly true that 2020 has presented some incredibly unique situations. 2020 does have characteristics that do make it different from other recessions. among these is the fact that not only are we worried about our money right now, but we're also worried about our health and the health of our loved ones. I think some things are different this time.

We have the double whammy of the recession and the health crisis. I go to these dark places because that's just the reality of the world we live in. Here's what I love about what Farnush just said. She described the feeling. She talked about going to dark places, which describes, or alludes to feelings of fear and anxiety. But in that same breath, she also described a healthy and constructive coping mechanism, which is to identify the things that are within her control and carefully manage those things,

such as creating an estate plan. Now, the specific example that she cited is estate planning, but there are many other examples of this. So, for example, you could review your financial picture to make sure that your emergency fund, your cash reserves for any businesses that you operate, or any rental property, properties that you own. Make sure that those things are all solid. You can review your financials to make sure that your ongoing or recurring contributions to investment accounts and retirement accounts are where they should be, and you can make sure that your asset allocation is where you want it to be. You can review your insurances, life insurance, disability insurance. Do you

have enough? Do you have enough savings to be able to cover both the deductible and the annual out-of-pocket maximum on your health insurance plans? Those are all examples of things that are within our control. And as Farnush outlined, dealing with those types of things, dealing with the things that we can control, creates stability in an uncertain environment. This is a good time to be having conversations with your family about caregiving and end-of-life care. This is a good time to be asking people in your family, hey, do you have a medical power of attorney or an advanced health care directive? Do you have life insurance? This is a good time to be talking to your siblings about what are our caregiving plans for parents and grandparents. There's so much

that we don't know and so much that's outside of our control and this time it is different insofar as we are worried about our health and we're worried about the health of the people that we care about. And so focus on the things that you can control. That is key takeaway number one. Key takeaway number two. Each of us are on our own path. Each and every single one of us are starting from different places with a different set of circumstances. We were faced especially early in life with different opportunities and different challenges. So give yourself credit for the progress that you have made. Many of us, in fact, I would go so far as to say most of us, have the goal of being in a financial position that is better than the one that we were born into. Creating greater

security, having more opportunities, enjoying a career more, enjoying more flexibility, making a bigger impact, having more meaning. We all want to ascend and progress and end up better than where we were when we started. But what that looks like is going to be very different for each person. There are many people who are listening to this who were the first person in their family to finish college. There are many people listening to this who have achieved everything that have achieved despite having a chronic illness that makes things harder. There are people who have to support family members who live overseas and send back a portion of their paychecks to parents or even spouses or children who may want to move to the United States but haven't been able

to do so yet. There are many different circumstances out there and every person's path is going to be unique. That's why it's so critical to hear many voices and to participate in a community. One thing that I have said in the past in sharing my own narrative, it was never intended to be said in a way that was undermining, but I would say things like, if I can do it, so can you. I think a lot of us who say that, our intention is to just actually kind of sound a little humbling, like a little humble, like, hey, like I came from nothing, so if I can do it, so can you.

But to someone who's listening to that, who doesn't share your skin color, who has to, unfortunately, fight racism as a daily practice, that can fall on deaf ears and that can be actually a little insulting because you're not acknowledging that there's a whole group of people that may be listening to you that, no, maybe they can't do it the way that you did. So we just have to be careful in how we shape and form our narratives, especially when we're talking to large groups of people. Maybe it's better to say, here's how I did it. I know that this isn't the path that everybody can follow, but I hope that it would be inspiration.

And then from there, like, invite other people to share their stories and make it more of a conversation. When you hear someone's story, I think one of the most constructive and effective ways to learn from it is not to nitpick at why. this won't work for you, nor to over-identify with every aspect of it and then feel disappointed when you can't replicate exactly what the other person did. In other words, neither tear it down nor put it on a pedestal, but rather take what you can from it, take what works, and leave the rest, and listen to a lot of different stories. Be part of a community. We have a thriving community that you can find at afford anything.com slash community where a lot of people would describe how they got out of debt or how they were able to up their retirement savings or retire

early. So you can talk to people there, you can hear their stories, you can get encouragement. And that's true, not just with our community, but all across the internet. There's many, many online communities out there. And I think what Farnuch said really highlights the importance of that, the importance of community and of listening to a lot of different stories, hearing a lot of different voices and examples so that you can find what works for you and you can find what connects with you. And so that is key takeaway number two. Key takeaway number three, ask for help when you need it. This is a tough year for many people. And if you need to collect unemployment benefits, if you need to take out alone, if you need to move out when your lease ends and

downsize into something that's significantly smaller and cheaper, there is no shame in any of that. So do not ever be embarrassed about your financial situation because you're doing what you got to do. And when you need help, don't be afraid to ask for it, whether that comes in the form of asking for advice, asking for support, ask for help when you need it. It's a very sobering time in our lives right now. What I'm encouraging people to do is to take care of themselves, firstly, take care of your health. And secondly, ask for help. I think that's something that everybody can do, regardless of your race, regardless of how

wealthy or poor you are, using your voice to ask questions, to ask for help. There's no shame in that. There are a lot of entrepreneurs who are in this community. And if you are one of them, then there's a chance that you might run a small business, that saw its revenue get decimated this year, or you might be a freelancer or a consultant who lost a lot of clients this year. If you are a full-time W-2 employee,

there's a chance that you may have been laid off or you may have been furloughed, had your hours reduced, you may have taken a pay cut. There are a lot of employees who have been laid off, and there are a lot of small business owners who have been forced to lay people off. And given the size of this community, given the fact that so many of you have both full-time day jobs and side hustles,

and given the fact that this community is large enough, there are 500,000 downloads that our episodes receive every month, given the size of this community, there's a pretty darn good chance that some of you who are listening to this right now have both gotten laid off and have had to lay people off. And that sucks. That is traumatic on both sides. So no matter what your situation is, ask for help if you need it because there is absolutely no shame in saying,

look, this year, I'm just trying to survive. This is not the time to be thinking about how to have your best financial year ever. This is a real reckoning. That is key takeaway number three. Finally, key takeaway number four. Cash conquers all. When times are good, when there's a bull market, people are often reluctant to keep money in an emergency fund.

I heard from so many people in 2016, 2017, 2018, 2019 saying, you know, I just don't like the idea of having money in an emergency fund. It's just sitting in cash, making nothing. Essentially, they were viewing index funds, equity index funds, as essentially a high-yield savings account. And that's just not the case. And in 2020, we're really seeing that. This is the year when we are reminded, and this happens every recession, we are reminded that the stock market is not a high-yield savings account, and that in times of crisis, cash is a darn good safety net.

if another rainy day happens and feels like there's so many things going on right now. It's not just the pandemic, but it's the recession. It's there's this election that's coming up with so many uncertainties that you want to feel more in control of your situation. The best way to do that is just have money in the bank, save. So even if you are an investing enthusiast, which many people in this community are, do not be afraid to also hold a large amount of cash. Do not view your emergency fund as a lost opportunity, because in fact, it is the opposite. Your emergency fund is your primary financial safety net.

Those are four key takeaways from this conversation with Farnush Tarabi. If you enjoyed today's episode, chat about it with other people in the Afford Anything Community. As I mentioned earlier, you can connect with other people who are listening to this at Affordanithingcom slash community. a couple of announcements that come from our community. So we now have a book club and a brand new accountability group for healthy living. There were members of the community who said that they wanted to be held accountable for things like getting more sleep, eating better, and exercising.

And so we created a tribe inside of the community that creates an accountability group for that. So you can join that. You can be part of the book club. Connect with other people in this community at afford anything.com. community. Thank you so much for tuning in. My name is Paula Pant. This is the Afford Anything podcast. If you enjoyed today's episode, please hit subscribe or follow in whatever app you're using to listen to this show so that you don't miss any of our awesome upcoming episodes. And don't forget to share this with a friend. Thanks again for tuning in. This is the Afford

Anything podcast and I will catch you in the next episode.