Afford Anything - Wall Street Secrets, with Your Rich BFF Vivian Tu

Episode Date: March 13, 2024

#493: Do you ever wonder what happens behind closed doors on Wall Street? Vivian Tu, also known as Your Rich BFF, is here to spill the tea. Vivian grew up in a modest immigrant family. After college, she found herself working insane hours on Wall Street after college. While working on Wall Street, Vivian saw some weird things. Once, a coworker stumbled hungover into the office after a trip to Atlantic City, carrying a duffel bag with thousands of dollars in cash inside. Vivian realized that there's a group of high-income and high-net-worth people who handle money in drastically different ways than she learned in her frugal upbringing. She learned about investing, taxes, legal loopholes. She discovered new ways of thinking about money. She shares these insights -- gleaned from her Wall Street days -- in today's podcast episode. Resources mentioned: Book: Rich AF: The Winning Money Mindset That Will Change Your Life Attend the LIVE Recording of Afford Anything's 500th Episode! https://affordanything.com/live500 Learn more about your ad choices. Visit podcastchoices.com/adchoices

Most of us don't learn about personal finance and school. We learn the Pythagorean theorem and we learn how to play dodgeball, but we don't learn what an APR is. We don't learn index funds or ETFs or IRAs or WTFs. And so it's helpful to have a rich BFF, someone who was a millionaire by the age of 27, despite the fact that she was not born wealthy, who is there to help guide us along the way. So welcome to the Afford Anything podcast, the show that understands you can afford anything, but not everything. Every choice that you make is a trade-off against something else. And that applies not just to your money, but to your time, your focus, your energy, your attention to any limited resource that you need to manage. And that opens up two questions, what matters most, and how do you make decisions accordingly? Answering these two questions is what this podcast is here to do. I am Paula Pant, your host.

And with me today is Vivian II. your rich BFF, a former Wall Street trader, who is also on the Forbes 30 under 30 list for having amassed 6 million followers in only two years, three years. Yeah. Which is incredibly impressive. And what that means, Vivian, is that your message of spreading financial literacy is really resonating with people. So there's a lot that we can cover. But I want to start by asking you, which finger did you? slice off.

So, okay, can you tell by looking at my fingers? Oh, oh, okay, guess and gain. Let's see if you can see. All right. For those of you watching on YouTube, which finger? Finger. Do, do, do, do, do do, do do, do. Okay, I'm going to guess left hand ring finger.

No. It's this pointer finger. There's like a little piece missing and you'll notice that, yeah, this one slopes, but this actually is like just a piece of finger. missing from it, like, and it just won't ever grow back. Yeah. Well, it's, it's extremely subtle. Yeah, it turned out okay.

And, you know, fortunately, I, you know, have gotten into the nail salon recently. So it's very well hidden. You can't really tell. And my little accident didn't leave too much of a lasting impression. Right. Well, and also to relate this to money, your accident didn't leave too much of a lasting impression on your bank account. Yes.

But it certainly underscores the importance of an emergency fund. Can you tell us about what happened? Yeah. And what it would have cost? Boy, I was turning 25. This was the Saturday after my birthday. It was midweek. And I was like, you know, I'm going to celebrate on this Saturday. I'm going to get a couple of my friends together.

We're going to go get drinks at one of my favorite bars. We're going to get tacos. It'll be fun. And I took a little nap that afternoon. It was a Saturday. And I wanted to make myself a sandwich so that I could have a little food in my stomach. And I took a bread knife. And I had a roll that I had gotten that.

morning from a little bakery and let's be clear, I am no whiz in the kitchen. I probably don't have a lot of those basic common sense skills that I should have had. But I went to cut this roll and the knife slipped off at the top. And all I saw was just a little chunk of my finger with and I had black nail polish on at the time. I saw it fall into my white countertop. And so I see a piece of my flesh connected to a little bit of black nail. And I'm like, oh my God. And I freak out, fortunately, my boyfriend at the time, now fiance, jumped into action. And I got to celebrate my 25th birthday in the emergency room of Mount Sinai. Shout out to the hospital ER for taking care of me. Not quite how I envisioned ringing in my 25th year, a little bit bumming out. But the

worst part, really, to add insult to injury is after all of this happened, you know, I'd had to get x-rays, I'd get bandaged up, I had to see a hand specialist the following Monday, I got sent a invoice that showed a total of $16,000 worth of costs for about a six-hour stint in the ER. That's expensive sandwich. Right. And I'm like, wait, $16,000, not to underplay what the doctors had done for me that night, but they shot some lydocane into my finger to numb it out. I was given a, you know, hospital grade level painkiller. I got one x-ray and, you know, a resident, not even attending, came over, looked at my finger and basically said, since the piece you cut off has no vascular tissue, we can't sew it back on. It's just, you know, skin and fatty tissue. So ideally,

given how young you are, hopefully this will just grow back. Your limbs are actually quite regenerative in your younger years. And $16,000 for that, I was just really confused. I was like, I don't know if that felt like $16,000 worth of treatment. And fortunately for me, I had very good insurance. But even with my very good insurance, my responsibility was still $1,300. And fortunately, I had that money. I had my emergency fund set aside. But, you know, it still felt like an enormous amount of money for an accident that I certainly didn't plan on having that, you know, for most other people would be an emergency that they likely couldn't afford and would either have to be put on a payment plan or go into debt of some type, taking out a personal loan to pay it or just leaving it in as medical debt and then potentially having that go to collections. And there were just so many negative scenarios spinning through my head and it felt so unfair. And I think that was the first moment that I became acutely aware that the United States is one of the only countries where people go bankrupt over medical debt, medical debt for illnesses that they didn't choose to have. Your career was on Wall Street.

But as we all know, having a career on Wall Street does not necessarily equate to good personal finance habits. Was that one of the inflection points in your interest in personal financial literacy? You know, I think I had had an interest in personal finance quite a bit earlier on pretty much as soon as I graduated from college. And it was for all the wrong reasons. I got into this working world and I started to see more money than I'd ever seen in my lifetime. You know, we were all broke college kids. Like it was no biggie. But suddenly I'm seeing designer bags left and right. people talking about using summer as a verb right yeah to their hampton's home people are talking about oh yeah taking the PJ I'm like what does PJ even stand for by the way it's private jet what I didn't know that yeah people were talking about taking the PJ and taking a client to Atlantic City to gamble

and you know going to Aspen and having these life experiences that I never had but I had seen in the movies And I wanted to be able to have all of those experiences. So I was like personal finance is really important because I want to be rich. I want to have a designer bag. I want to have a nice apartment. And frankly, I wanted to learn about this space for just very shallow purposes. But I was very lucky in that my first mentor at work was the only other woman on the team and the only other person of color on the team. And I think she saw a lot of me and herself.

and maybe she hadn't had that wise mentor coming up in her day. So she basically said, I'll be yours. And she took me under her wing, talked to me about why I should be investing in my retirement plans at work or why I needed a Roth IRA and why I should be doing all of these things to really improve my financial picture. And she says, don't wait because she waited. And she was like, you know, I was also young. I was silly.

I wanted a dog. I wanted to have all of these fun things. I wanted to go out. It was New York. I wanted to be a young person in a big city. And I ended up having to put a lot more money away later on to essentially play catch up. She said, you have an opportunity right now to not have to do that. Don't make the same mistakes I did. And really put me on a path to financial success, one that she was not given the opportunity to be on. Wow. Yeah. Wow. It's wonderful. Don't that give you chills to like have someone care about you that much? Right. It's crazy. Right. And it's amazing the power that talking to somebody face to face can really have. You know, I think about you, you and I both talk to a lot of people through digital mediums. And that gives us a wide level of reach, but to actually look into somebody's eyes. Yeah. And say, hey, you're in your 20s. Open a Roth IRA. Do it right now. Yeah, exactly. Yeah. Exactly. Speaking of PJs, You're from a Chinese immigrant family. And I'm from a Nepali immigrant family. And so, you know, I think we have...

Are you Nepalese? Yeah. I didn't realize that. Yeah, yeah. Nepalese. And so growing up, the immigrant parents, what we learn about money at home is it's all about scrimping and saving. A thousand percent.

Yes, exactly. It's all about, you know, you open the fridge and you see like 15 different, what outwardly looks like tubs of cottage cheese, right? Yep, or the salsa jars that have like rice in them. Yeah. My favorite actually is the cookie tin that is actually a sewing kit. Oh, yeah. It's classic.

That's a classic. Everyone's got that. Exactly. All of the cottage cheese jars and you're like, but it's just that they don't want to spend $10 on Tupperware. Yep. Yeah. Yeah. And when you talked about the reused Ziploc bags, I was like, yep.

There we go. Yeah. Got to wash them. I know that one. I know that one. I think we both grew up in this background where, smart money management, as it was modeled to us, is all about penny pinching. It's all about skimping. It's all about savings. When you started working on Wall Street, one of the first

experiences that you had early in your career was seeing someone blow an enormous amount of money and then seeing that actually pay off. Can you tell us that story? Yeah. So, you know, I feel like traditional wisdom when you start a job on Wall Street and you're, you know, a junior your person is like, come in early, leave late, make sure you're like on your A game, be focused. Don't walk away from the desk for too long. Just like, you know, be really present and try your hardest and kind of be like a little bit of a suckup, a little bit of a goody two shoes and like just really, really be on your game. And I watched one of the sales guys.

It was a Thursday and, you know, he was like, oh, I'm going to see a client tonight. And that night, he took the PJ to Atlantic City, took this guy gambling all night, didn't even go to sleep and took a chopper back to New York City in the morning. And we all knew this happened because he came into work with the same shirt he had on the day before. And it was like a golf polo because, you know, even Wall Street has started to like lax on the dress code. So he had a golf polo on. And it was the exact same one from the day before. And somebody asked him and was like, are you wearing the same shirt as yesterday? And he walked in with a double, a duffel bag filled with $35,000 in cash.

And I was like, $35,000. Like I had never seen $35,000 in real life. Right. I was like, that is an unreasonable amount of money. Right. And I remember him opening the duffel bag, me seeing inside and was like, oh, my God, that actually is so much cash. him taking out a $100 bill and passing it to his junior and being like, I'm so hungover, like, please go get us like breakfast sandwiches.

And I was like, okay, he came in late, he's very hungover, spent half of the day just moaning and groaning about how uncomfortable he was, you know, took a 30-minute walk because he was feeling nauseous, barely did his job and left early that day. And I was like, so he's broken every single rule that I've been told is what a good employee does. Right. But his network came through for him. And he knew the reason why he felt comfortable enough, because the expense policy on Wall Street is not what it was in the 80s. They're only covering about $175 per person per event. So like, yeah, you can go to a really nice dinner, but it certainly does not cover the cost of a private jet to go gambling all night and then take a helicopter home. But he knew that,

you know, that person was essentially going to help him and understood that at certain times. Like, you know, you have to network. You have to return that favor. You have to provide value in your own way. He, I'm assuming, fronted all of the money that was his own money to take this guy out, have a great time. He paid for it out of his own pocket. He paid for it out of pocket. And the next day, that guy sent him for probably two weeks straight, just massive trade orders, day in, day out, and they were easy. They weren't like, oh, you have to get me this price. You have to do like some crazy, you know, ridiculous trade that's like very, you know, potentially loss making on your end. It was like, yeah, just like slowly buying this over the next, you know, eight hours. It's no biggie.

And it was just the principle that all of that traditional wisdom wasn't true as long as you performed. As long as the quantifiable stuff spoke for itself, you were allowed to maybe veer off of what is considered traditionally good. You're allowed to break the rules. You're allowed to break the rules. And I think for me, I do have to be extra mindful because he was a man. And when you're on Wall Street, men and women do not play by the same rules. If, you know, a woman took, you know, one of her clients out all night drinking and gambling, it certainly has a different perception than if a guy does it. It's definitely, it's probably a little bit more frowned upon. And that was something that I had to live with. But it did show me that, you know, conventional wisdom is not always correct. Hmm. If conventional wisdom is not always correct, what's the alternative? And how do we know of the many possible alternatives? How do we know which one to lean into? Yeah, I would say we should do not as we're told, but as people who are successful actually do. Because we've been told a lot of myths, right? Like, talking about money is tacky and rude. Have you ever been to a country club? You ever see two old guys teeing off cigars and stuff? You ever see two old guys teeing off cigars and stuff? And, you know, like, talking about money is tacky and rude. Have you ever been to, you ever? Have you ever seen? You ever see two old guys teeing off? their mouths, beers in their hands, talking about their real estate investments, talking about

their portfolios, talking about what they're planning on doing with their trusts and wills and estates so that their kids can avoid probate and all of these things. And they're like talking about money and very gratuitous detail. So like what makes it weird when two young women talk about money because neither of them have it? It's not tacky. It's not rude. Talking about money makes you good with it. It also makes it less awkward. It makes it less intimidating. So I would just say, do as others do, who you look up to versus as you're told. Right, right. And one of the things that you've noted is basically the way, the habits that rich people have around their money is very different than the habits that not rich people have. You know, talking about money is one example.

I feel like my favorite is like the entitlement. So when we think about people who are entitled, certainly there are loads of rich people who are entitled and gross and they're standing at the front of the McDonald's line, yelling at some poor 18 year old kid who is certainly not the reason why their french fries are cold. That is a form of entitlement and it is bad. However, there are some moments when being entitled is a good. good thing and works in your favor and works to your benefit as a human being versus a corporation. And I think a great example of that is say you get hit with a late fee on your credit card. The account changes over or something happens. The auto pay turns off for whatever reason you get hit with a late fee.

I guarantee you every single rich person out there is calling the credit card company and saying, hey, I've been a loyal customer for 10 years. Can you do me a one-time courtesy and waive this late fee? Either they're doing it, they're having their assistant do it. But they're not paying that. I guarantee you. And the reason is, is they know the value of their business. They know that, hey, I've got cash sitting at this bank that you are using to loan out, that you are making interest off of. And that has value to you. I have my mortgage with you. You are earning interest on that. That has value to you. We have a private banking relationship. And because of that, I use you as my brokerage. That has value to you as the bank.

And they know that if they wanted to, they could leave. And because of that, they also recognize that for banks to acquire a customer like them is incredibly expensive. They need to spend thousands upon thousands of marketing dollars to do that. They will waive a $35 late fee so fast you can't even blink before they let you go. And I think the rest of us, regular, everyday people need to also have in certain moments, that same sense of entitlement because we are worth it. We do deserve it. We should be able to push back on corporations that serve us because we're the clients and we have value. What I hear in that example specifically is beyond beyond entitlement, which is a loaded word, what I hear is negotiation.

100%. What I hear is negotiating away fees just as you would negotiate a salary, just as you would negotiate the purchase of a home or a car, the mentality that everything is up for negotiation. Correct. You know, I think, again, rich people make the rules. They don't like to follow them, though. We tell everyone that the price is the price. Is it? It's not. Pretty much just about everything is up for negotiation, even in moments when you think it's not. I think the moment that I really realize this, right? We know things like home prices, car prices. medical bills, you know, utilities like Wi-Fi or your streamer services, those are all negotiable. We know that.

But no one thinks walking into a fancy department store, the things on the shelves are negotiable, right? Like they have a sticker price. I went to go buy a pair of black platform heels. I said, hey, I love this display. It's a size six, but I need a size eight. and the associate went to the back and pulled out a size eight and basically said, hey, like, I have this. Try this on. I tried it on. It looked great. I was like, I love these. But I noticed one of the shoes had a scuff on it. And I tried to like rub it out with my finger or,

you know, blow on it a little bit. Scuff wouldn't come out. And I said, hey, the shoe has a scuff on it. I'd really prefer it to be like very more even. Do you happen to have another eight in the back? He ran back. He said, hey, I'm really sorry. This is truly our last pair of eights. And I said, okay, I'd still like to purchase these today. But as you can see, there's a pretty big scuff on the shoe. Would you be able to provide me a discount? And he took 15% off the full market price that was on the sticker. And nobody else was getting a sale on that type of shoe. It was only because I had the guts to ask. Right. And so remember this. Everything in your life is negotiable. And the only time you are guaranteed to hear no is if you don't ask. Right. And a lot of people, they don't ask because they think it's impolite. I think this goes back to the myth that talking about money is impolite. But why would it be in polite?

Because it makes you look greedy, because it makes you look cheap. Those are only words that are used to describe people who don't have a lot of money. But I think of all of the rich people that I know, nobody. loves free stuff more than rich people. And it's the funniest thing because the people who could most likely afford stuff want to be gifted it, want to be given a discount. So I think, again, this is a case of like doing as they do, not as they say. Right. Right. You talk about how rich people have an abundance mindset. Can you describe what an abundance mindset is? Yeah. An abundance mindset essentially is just the attitude of like, there is more where that came from. And I, I,

I think my parents very much had the opposite of that mentality. Their mentality was always the other shoe is about to drop. Right. And so that's common among immigrant parents. Very common. And for in fairness, good reason. Yeah. When they come to this country, oftentimes there is a language barrier.

Oftentimes they are in jobs where they may not have that type of stability. You know, they were raising me. I was a little kid at the time. Little kids are very expensive. They wanted to provide me a good education. but that oftentimes meant making sacrifices in their personal lives or where we were living or whatever. So I get why that mentality exists. However, an abundance mindset is the belief that, and not even just the belief, but the understanding that you can take opportunities because

that is going to actually be the way to provide yourself with growth and wealth. And for example, a scarcity mindset would be, I don't want to take this new job being offered to me at this other company because it's a startup and there may not be as secure, but here I'm making less money, but it's more of a sure thing. And that fear of like even you want to do it, but you feel like you can't.

Whereas an abundance mindset would be, okay, this is a great opportunity at a startup for me to be, you know, the seventh person working at the company. I have a decent pay there and I'm going to get a ton of equity. I don't want to just settle at my existing job. And worst case, if this whole thing doesn't work, I'm going to get a lot of great skills. And I'll always be able to come back to a larger corporation like the current job I have.

And just reframing of these are opportunities, not pitfalls coming forward. Right. And recoverability, right? Resilience. It's the ability to bounce back. It's knowing that in short, you got it. it like that. You can't just click your heels and have an abundance mindset and you're fixed. No. An abundance mindset comes from pure actions and having certain things in your life that really do allow you to believe that you can have that resiliency.

And that includes having that emergency fund or being invested in some of those retirement accounts and having investments for the future and knowing that the actions that you have displayed up to this point have set you up in a way. that you are able to take on these new opportunities, even if it does introduce a little bit more risk into your life. Right, right. And part of also embracing risk and being able to have that abundance mindset comes from knowing what your skills are. Yeah. And a lot of people make the mistake of believing that your skills are the same thing as your previous work is true. Yeah. Can you tell us more broadly, how should the people who are listening to this think about their skills? Yeah. The best thing that your skills can be is trans. transferable. You're talking to somebody who literally was a trader on Wall Street, and in that role, you do quite a lot of essentially sales, essentially conversations with clients, like,

hey, this is what we're seeing, this is what we feel positively about, negatively about, this is what we believe is likely to happen, X, Y, Z. You're basically convincing people of your beliefs. Right. And then to move into digital media strategy sales at BuzzFeed, I was able to then sell something else, but it just wasn't, you know, assets, investment assets anymore. It was corporate advertising. Right. So even though they're two completely different worlds, completely different jargon, completely different metrics, sales is sales, baby. You either got the sauce or, you know, you got to learn to have the sauce. And so I would say having those transferable skills is really helpful. Your career is not actually climbing the ladder. It's climbing

a rock wall. When you climb a rock wall, the expectation is not to go, ooh, the expectation is like, you're going left, you're going right. You might have to take a step down just so that you can jump up and grab something. So scaling a rock wall is very zigzagged, but you're ultimately getting to the top. And it's not so cut and dry. It's just rung after rung after rung. Really, to have a really successful career, you want to make sure that anything that you are doing at any point you are learning or earning, ideally both, and you are then able to take all of those learnings to fuel your next opportunity. I like the Rockwall analogy, because I've heard the Spiderweb analogy.

Oh, I've never heard the Spider Web one. Yeah, you know, people have kind of talked about, you know, spider web because you can move laterally. Yeah. But with a spider web, you may be moving laterally, but you're not necessarily crawling up the spider web. Yeah. You know, so a rock wall makes a lot more sense because you do make those lateral moves, but ultimately with a rock wall, the direction, the trajectory is up. Yeah. Yeah. I like that one. Thank you. I've never climbed a rock wall. Let's be entirely clear. I cannot do that. But if I were to, I would know how. The holidays are right around the corner and if you're hosting, you're going to need to get prepared. Maybe you need bedding, sheets, linens. Maybe you need serveware and cookware. And of course, holiday-de-day-de-day.

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Buy yours at gotransit.com slash tickets. You say learning or earning and some of those, well, much of those learnings can also be transferred into a side hustle that a person should start. Yes. But you've got a couple of rules around how people should think about side hustles. Yes. Side hustles are so interesting because I feel like after COVID, everybody has a side hustle.

Yeah. Nobody's just working one job anymore. But I would say when you are thinking of what side hustles, what side hustles you want to do. It's really important to prioritize yourself. And that means, one, your schedule, two, your skills. And three, is this something you want to do long term? Not to mention if you are choosing to go upon a side hustle journey, are the barriers to entry high? Because if you sink a bunch of money into a side hustle in the hopes of making money, but then you find out it doesn't align with your schedule, you don't like doing it and you don't

plan on doing it for a long time, you've just wasted even more money. Right. So I would say with side hustles, make sure it's something that you can, you know, just dip your toe in, try it out. Do you like it? Maybe dip the foot in. If you like it, dip the whole leg in. And then until you're ready to really jump into the pool, like don't funnel a ton of

money into making more money. It's an opportunity for you to test something first. So when you say are the barriers to entry high, are you advocating that people choose something with low barriers to entry? Yeah. So low barriers to entry, wag. Okay? I come to your house.

I pick up your dog. You provide me with the leash and a single biscuit treat because, you know, Rover needs to have a little motivation to get around the block a couple times. And we walk around and that's it. I return your dog. I return your keys. I return the leash. And I go home.

That costs me nothing. But what if I drove for Uber? Okay. Now I need to have a car. If I already have a car, I'm going to be putting mileage on that. and gas into the tank. But if I don't have a car, now I have to get a lease. Now I have to put gas in the tank. And not to mention like, oh, if in a place like New York City, like, are you getting the car parked in a garage at night? Are you parking it on the street? And then occasionally getting a ticket

from the street cleaners. There's so many costs associated with that. Whereas there are certain side hustles that have no startup costs and make it a lot easier for you to get in. The low barriers to entry side hustles, though, typically also would pay less, wouldn't they? That's not always the case. Sure, there are some side hustles where if you do have additional equipment or something like that, like you can make a lot more, for example, if you're a photographer as a side hustle, like, yeah, you have to pay for the camera, the editing equipment, the lighting, a studio. But yes, you can charge thousands of dollars for a portraiture session.

But on the other hand, like, the commitment to do a gig economy job where you're driving around or biking around, like the barriers to entry to that are quite high and you're not making amazing money on the same end. Like with a wag, like you're only making slightly less than you would for one of those delivery jobs, but the barriers to entry are almost zero. What I'm hearing through this discussion, what I'm hearing are examples, you know, dog walking, driving for Uber. those are examples of gigs, but they're typically not something that a person would ever want to, most people would want to grow into a full-time business that they do for the next 40 years. Yeah. Whereas something like photography, that might actually be a full, you know, an aspiring full-time business. So where do you differentiate between the side hustle that is a cash grab versus the side hustle that is your foray into test driving, the thing that you hope will be your second career? It depends on why you are getting that side hustle.

Exactly like you mentioned. Say you have a wedding coming up or you're trying to put a down payment down on a car or a house and you are side hustling for a temporary period of time. And yes, that temporary period of time is going to be there. It's going to be a little, you know, discomfort in that moment. That is to that point to increase cash flow coming into you. On the other hand, you are allowed to also have passion projects, which are similar to side hustles. but you actually really enjoy doing and want to pursue further on. I just like to differentiate between the two because passion projects don't necessarily have to make you money.

Just because you love to crochet doesn't mean you have to open an Etsy store. And just because you love to take photos does not mean you have to start a photography studio. But those things can eventually evolve into a larger business opportunity if that's something that you want to do. Oh, yeah. Didn't you know somebody who's a sneaker head? Me, but also the guy. Not me trying to take credit for this person. But yeah, I was like flipping sneakers in my early 20s to like pay for stuff. Really?

Because I had no money. Like people don't understand. I was making a good living. I was making, I want to say, $80,000 a year. I'd gotten a $10,000 relocation bonus and a $10,000 stub bonus, my very first year, which in everybody's heads, they're like, $100,000. Like, this girl had a lot of money. Absolutely not.

Not after taxes in the city and state of New York. I was living paycheck to paycheck. I had a very expensive apartment near my office because I had to be in at 545 and I'd come home quite late. So having a side hustle at that time where I was buying and selling sneakers, that money was my discretionary money. I paid for a vacation with sneaker money. I got out of a bad apartment situation because of sneaker. money. And I wouldn't have been able to break that lease without that money. So I'm always going to have a little soft spot for flipping sneakers or sneaker heads. And it's nice to, you know, see someone with a

fresh pair of kicks or they see me with a pair of Jordans on. And they're like, whoa, where did you get those? It's like our own little club. It's something special. That's also something I enjoy. Do I want to be a full-time sneaker arbitrage reseller as a living? No. But I did it for about a year and I use that money to get me to a more comfortable financial position. This now makes a lot of sense. So behind the scenes here, when we met, the very first thing that she commented on was my shoes. Yes, I'm a big, like shoes. I love looking at shoes. I love looking at, you know, people's fun accessories. I will say when I walk past a store window, the tops, the bottoms, whatever, I'm looking down. I want to see what's on the feet. Like, are they cool?

Are they flashy? Are they, you know, a special material? Do they look comfortable? I had way too many pairs of shoes. When my fiance and I moved in together, he really embarrassed me. He was like, okay, Vivian, the apartment we're moving in together has limited closet space. Like we need to pull out your shoes. And we went into the closet. We pulled them all out. And he said, have you worn these in the past year? And I would be like, no. And he's like, have you worn these in the past year? And I'd be like, no. And I hadn't worn like 70% of the closet of shoes I had in the past year. And in New York, maintaining that space for that is a lot. Yeah, it's tough. Every square inch count. Yeah. I'm wearing Rothies, those of you who are watching in YouTube can see. And it perfectly matched the color of her shirt.

Yeah. Yeah, exactly. So my shirt and my shoes are precisely color coordinated. So yeah, and that was the first thing that you said as soon as she saw me. The passion, right? Yeah. It's evident that your passion for sneakers. Yeah.

or your passion for shoes. Yeah. It is eternal, you know, whether or not it's something that you're monetizing. Exactly. So let's talk about, you know, we've talked a bit about emergency funds, about side hustles. Debt. Debt is not a four-letter word. Why?

So technically, yes, it is. I don't want people to think I can't count. But it's not that kind of four-letter word. Yeah. I just think debt gets such a bad rap. And, you know, there have been some folks who are very. very popular in the finance space who have made hating on debt their entire personality. And it's a little frustrating, right, because the vast majority of people in America have debt.

Right. Like student loans, mortgages, like credit card debt. Debt is, you know, omnipresent. But there's so much shame around it as if it's an embarrassing thing that you should be hiding when most of us have debt. Like, why is that embarrassing when the vast majority of us have it? Also, you know, talking about debt in a way that is so negative, it's like it's a character assassination, essentially. You have debt because you're irresponsible. You don't know how to spend money, right? You don't know how to budget. You don't know how to blah, la la. That's not true. People take on debt for multiple different reasons. And when we see a single mom go to the grocery store and put food that she cannot afford on a credit card to feed her kids that night. We point our fingers and we wag and we say, how irresponsible of you? So financially stupid. When we see rich people take out multi tens of millions, hundreds of millions of dollars in debt, we call them visionaries. We don't even say the word debt. We call it leverage. And we put them on the cover of magazines.

Because the way we treat people borrowing money, which is just what debt is, borrowing money, depending on if they have it or not, is entirely different. And I think that's not fair. Like that's a double standard. And I think we should talk about it in one way. And that way being a tool. It is a tool that is good that can be used for good and a tool that can be used for bad. And it is good to borrow money if you can get it for cheaper than what you can do with it.

It is bad to overspend and purchase things that you can't necessarily afford and that you don't necessarily need. with money you don't necessarily have, but it isn't black or white. So is the distinction between debt on consumer spending versus debt on income producing assets? Yeah, I think there is that differential, but I also don't look down upon someone who's using debt to make ends meet when they have no other options. You know, I think they are doing the best with what they have, with the knowledge that they have and frankly, the resources that they have. I just think that we need to be a little bit more willing to look at the context of a situation before saying this is good or bad. Is any debt good or bad or is it all simply a tool that people use for one reason or other? Well, I think it is a tool for one reason or another, but some of those tools can be really, really lucrative and useful and good.

For example, my mortgage rate has a two handle on it. I promise you, I am going to slow roll me paying off that mortgage for as long as humanly possible. Because right now, mortgage rates are what, something with like a high, like a seven handle, something can handle. Yeah. And what did the S&P 500 earn last year? 25%.

Yeah, exactly. 23%. I am so much better off investing any additional funds I have. have than using those additional funds to pay down that debt. Because why would I try to avoid 2% of interest when I can earn 23% of interest and just pay the 2% out of that and still be 21% up? Right. You know, think about it like a bucket. The gains that you get or, you know, the interest that you might receive from putting your money into a high-old savings account or investing in the market, that's a hose. That is why.

coming into the bucket. And then your debt, the interest that you owe on that debt is like a hole at the bottom, a drip out. If the hose is pumping water into the bucket at a faster rate than the drip out is happening, you're still going to end up with more water over time. And the water is that money. Whereas if the drip out is happening faster than the hose is able to refill it, you are now in a worse off position and over time will end up with no water in the bucket. So we always want to prioritize the action, whether it's paying off debt or whether it's putting more into investing to get us more water in the bucket. Right. Yeah, I think the question comes up for a lot of people when the amount of water that comes out of the hose is volatile and uncertain. Yeah. Right?

Because we don't know exactly how much water that hose is going to emit day after day, month after month over the next five, 10, 15 years. We don't. And listen, historical performance does not indicate future results. La-da-da-da. I get it. But there have been serious long-tailed studies done. And the S&P 500, over, you know, since the history of its inception, has returned roughly 8 to 10 percent annually accounting for inflation. And so that is a bet I'm willing to make. Because some years, sure, you'll be up to and, you know, maybe there'll be slightly less water in your bucket because your debt's interest compounded a little faster than that. But other years, you'll be up 23%, and your debt's interest will have only compounded a certain amount,

and you'll be way up. So over the long term, you'll still be better off. At what point should a person take, let's say they want to transition from a stable nine to five job into a career as an entrepreneur, which means they're adding more risk to the income production element of their life. At what point should they counterbalance that with being a bit more conservative than their investments? I think that is such a personal decision. but for me, it was actually before I made the jump. So when I was working on your HBFF in the beginning for the first year in three months, I had a full-time job. And I used my full-time job to essentially fund my side hustle, my passion project.

And I did that by significantly setting aside much more money for savings than I normally would have. I waited until I had an additional, not my emergency fund, not the house down payment, not the other savings, but a separate fund specifically called Vivian quits her job fund. And I put $100,000 a cash in there. And it was a high old savings account and I just held it there. And, you know, I was earning a couple percent, but nothing crazy on it. But my thought was, now that I have this money, it can tide me over for a year. if I don't make a single dollar doing this for the next year, which I knew was unlikely at that point. But if I don't make a single dollar, that $100,000 should cover me in my needs for 12 months at least.

That was what gave me the confidence to jump forth. So if you are planning on taking the leap into entrepreneurship away from a more traditional W2 stable income job, maybe it is ratcheting up that savings or potentially if you have investments that aren't, you know, in retirement accounts, but like ones that you want to have access to choosing more low reward but also low risk assets is certainly a smart way to go about it. And then doing that before you take the leap, I think we'll just give you a lot of peace of mind. Maybe I'm just a worry ward, but I think a lot of us worry.

Yeah. And it gave me a place. And I knew that I essentially had built myself a parachute to jump out of the plane in case things didn't work out. And fortunately for me, they did and I never had to use it. Yeah. I guess prior to making that leap back when you were when you were a W-2 employee, one of the first big splurges that you made was on a Prada bag. It was stunning. Paul, you had to have seen it. It was, it's special.

Do you still have it? Of course. Of course. I'm never getting rid of that bag. It won't be resold because it was my first back. And nothing ever feels as good as your first bag. Yeah. My mentor taught me that. I talk about it in the book. And, you know, it wasn't what that bag was, but what it represented. What did it represent? It represented financial agency for me for the first time. I didn't have to go and ask for permission to buy that bag. I bought that bag because I blood, sweat, tears. sat at my desk for 14 to 15 hours a day, went to client events after work, schmoozed, did everything that I was supposed to do to make that money and I set aside money for my bag. And when I bought it, I was like sweating at the register, but it just felt like I had made it. I didn't need to ask some boy for the bag. I didn't have to ask my parents. I could just go into the store, walk in, pay for it, and I knew I had the money to cover it. That's that's power. Right. Right. You have a line that really stood out to me where you say, quote, a purchase has value when we have more positive

feelings about having it than negative feelings about not having the money anymore. Yeah. Which is such an interesting, like a great definition of value. Yeah. Right. And so how, for the people listening, when they're trying to determine if a particular purchase has value, you know, because a lot of lot of people conflate cost with value. Yeah, yeah. In one way or the other, some people will think that something is a great deal because it's cheap. Yes. Despite the fact that it's got no value to them. Yeah, exactly. And extremely low quality or they don't need it. You know, it's the, oh, I bought it because it's cheap. I bought it because it's on sale. And conversely, there are others who think that things are valuable only because they are, those items are considered

luxurious and expensive. Right. Exactly. Exactly. So for everyone listening, how does each person personally know if something has value? If something can be that prodig, what it was to you? You know, I think oftentimes these things that hold the most value and meaning to us are things that we've wanted for a very long time that we've thought about, that we've researched. This is not a purchase you make on a whim. This is something that you plan for. You budget for. You are very deliberate and purposeful and thoughtful in your buying. And when you think about buying it, It's not fear. It's not, oh, I might have buyer's remorse. It is there is nothing in the world that I want to do more than buy this thing. And what I love to actually do is, you know, the is it worth it equation? You may have heard it called value based spending. I think a lot of people struggle with the value of a dollar, not because they don't work hard because I've heard you like, you don't know the value of a dollar. That's not what I'm saying here. I think people don't understand the value of a dollar because they don't know what it equates to in their lives. But what I like, to do is take the cost of anything that I'm purchasing and divide it by my hourly take-home pay. And that helps you to change the equation of this pair of pants is $80. If I make $20 an hour, this pair of pants is worth four hours of my work. Are you willing to sit at your desk for four hours for this pair of pants?

And for me, this equation, anytime I'm buying something, I do it in my head, it has made me feel so much less guilt about going on vacations, spending on fancy dinners and experiences, buying nice gifts for people that I love. But it's made me feel worse about spending full price on retail for spending money to go to or tend social obligations I don't actually want to be at or, you know, things that I just don't need or like spending money on stuff that frankly, I have at home. Like, you know, we have X, Y, Z at home. Like, it really helped me rationalize not having the daily purchased tea or coffee or beverage because I was then able to rationalize, hey, if I don't spend that money every single day and I save up,

I can get something cooler at the end of the year. Right. So this happened with me. When I reached a point where I started making a lot of money and I would then, okay, what is this worth in terms of my time? It kind of justified buying everything. Really? Yeah. Like, I don't know, maybe my wants just aren't big enough. But like anything that I wanted, I would think about what that equated to in terms of

how many hours of work it would take. And I was like, yeah, may as well. Yeah, may as well. I love that attitude. But, you know, I think that's the other thing. We have to talk about like lifestyle creep because it's not just people who don't have money that can make many mistakes. people who have tons of money make big money mistakes. In fact, the scales of those mistakes are just

larger. You make mistakes with more zeroes at the end. Yes, exactly. And, you know, I certainly struggled this with, you know, with myself. And not so much now. I feel like now I'm almost like past that point of like, I don't care. I'm not impressing anybody. Like, if you want to know what I'm up to, you can Google it. And that's like talking my big back talk. But when I left Wall Street and went into media and tech, I felt a little chip on my shoulder because for many people, it felt like I thought people believed I couldn't hack it. And because of that, when I started making more money, multiples of what I was making on Wall Street at my tech job, at my media job, I felt the need to, you know, throw it around a little bit. I got a couple really nice codes. Blow it to show it.

Blow it to show it. I got a couple designer. That's the stupidest thing. I got a designer stocking cap. What's a stocking cap? There's like a little like winter hat with a puff on the top. Oh, like a like Santa Claus hat kind of thing. Yeah. It's like a beanie, but with a little little puff on the top. And it was like puff on the top of rabbit fur. And it was like designer. It was so fancy. It's itchy. It issues my head. I don't like my hair being frizzy and covered. And I never wear it. And I was like, what a huge mistake. And I ended up spending a lot of money. And I ended up spending a lot of money. that I had, but frankly, didn't have because I should have been using it for other things. Spending money I didn't have on stuff I didn't need to impress people I didn't like. Because I wanted to show people how successful I was. And it just kind of left me with a lot of junk. Whereas now my biggest spending are almost always on experiences and almost always to show people I love a good time.

And I never regret any of those decisions. Yeah. That's a beautiful place to end it. Are there any final lessons that you want to impart on the afford anything community? Ooh, I would just say, like, talk to your friends about money and talk about your value because you can only save as much as you earn, but you can always earn more money. And that was a golden piece of wisdom that my mentor gave me because we talk about all the saving. like, do you have any idea how hard it is to cut $5,000 worth of discretionary expenses out of your life?

You're not getting that latte anymore. Say goodbye to avocado toast. Hulu, who. Like, it's not happening for you. You're not going to get drinks with friends. You're not getting your nails done. But getting a $5,000 raise, that is not unheard of. That happens all the time every day for so many people.

And frankly, a lot of people get bigger raises than that. So instead of focusing so much. much about scrimping and saving and trying to, you know, really just piecemeal together and make the math make sense. Go and demand a 10 to 15% raise every year and force the math to work. Hmm. Perfect. Well, thank you. Thank you, Vivian. It's nice to be everybody's rich BFF. Yeah. Thank you so much and thank you so much for having me. I really appreciate you being one of the, I would call personal finance OGs, you know, one of the people that I look up to and I hope I'm doing you proud trying to usher in this next new wave of people in the business.

Oh, thank you. Of course. Thank you. Thank you, Vivian. What are three key takeaways that we got from this conversation? Number one, when it comes to learning from high income or high net worth people, don't just listen to what they say. Watch what they do. We should do not as we're told, but as people who are successful actually do. Because we've been told a lot of myths.

Talking about money is tacky and rude. Have you ever been to a country club? You ever see two old guys teeing off cigars in their mouths, beers in their hands, talking about their real estate investments, talking about their portfolios, talking about, you know, what they're planning on. doing with their trusts and wills and estates so that their kids can avoid probate and all of these things. And they're like talking about money and very gratuitous detail. So like what makes it weird when two young women talk about money because neither of them have it? It's not tacky. It's not rude. Talking about money makes you good with it. It also makes it less awkward. It makes it less intimidating. So I would just say, do as others do, who you look up to,

versus as you're told. So pay attention not to what people say, but what people do. That is the first key takeaway. Number two, be a little entitled. Not in a negative. Of course the word entitled has a negative connotation to it. But let's reframe it. Let's embrace the notion of entitlement as overcoming your imposter syndrome and walking into a room with full knowledge of the value that you bring to the table. And short, we can get into a semantic debate. Is that entitlement?

Is it confidence? Whatever. Call it whatever you want. But it's the attitude that you need to have when you go into a negotiation. When we think about people who are entitled, certainly there are loads of rich people who are entitled and gross

and they're standing at the front of the McDonald's line, yelling at some poor 18-year-old kid who is certainly not the reason why their french fries are cold. That is a form of entitlement and it is bad. However, there are some moments when being entitled is a good thing and works in your favor and works to your benefit as a human being versus a corporation. A great example of that is say you get hit with a late fee on your credit card. The account changes over or something happens, the auto pay turns off for whatever reason you get hit with a late fee. I guarantee you every single rich person out there is calling the credit card company and saying, hey, I've been a loyal customer for 10 years. Can you do me a one-time courtesy and waive this

late fee? Either they're doing it, they're having their assistant do it, but they're not paying that. The reason is, is they know the value of their business. They know that, hey, I've got cash sitting at this bank that you are using to loan out, that you are making interest off of, and that has value to you. I have my mortgage with you. You are earning interest on that. That has value to you. We have a private banking relationship. And because of that, I use you as my brokerage. That has value to you as the bank. They know that if they wanted to, they could leave. And because of that, they also recognize that for banks to acquire a customer like them is incredibly expensive. They need to spend thousands upon thousands of marketing dollars to do that. They will waive a $35 late fee so, fast, you can't even blink before they let you go. The rest of us, regular, everyday people,

need to also have in certain moments that same sense of entitlement because we are worth it. We do deserve it. We should be able to push back on corporations that serve us because we're the clients and we have value. That is the second key takeaway. Finally, key takeaway number three, side hustles are on everybody's mind these days, but how do we know if we are choosing a good one? In this final key takeaway, Vivian shares three things that a person should think about as they are picking a side hustle. When you are thinking of what side hustles you want to do, it's really important to prioritize yourself. And that means, one, your schedule, two, your skills. And three, is this something you want to do long term?

If you sink a bunch of money into a side hustle in the hopes of making money, but then you find out it doesn't align with your schedule, you don't like doing it and you don't plan on doing it for a long time. You've just wasted even more money. With side hustles, make sure it's something that you can, you know, just dip your toe in, try it out. Do you like it? Maybe dip the foot in.

If you like it, dip the whole leg in. And then until you're ready to really jump into the pool, like, don't funnel a ton of money into making more money. It's an opportunity for you to test something first. Those are three key takeaways from this conversation with your rich BFF, Vivian, too. Thank you for tuning in. If you enjoyed today's episode, please do three things. Number one, subscribe to the show notes. Afford Anything.com slash show notes.

Number two, share this with a friend or a family member. Number three, review this on your favorite podcast playing app. Review us on Spotify, review us on Apple Podcasts. And if you're watching this on YouTube, like, subscribe, share, leave a comment. Thank you so much for being part of this community. My name is Paula Pantt. This is the Afford Anything podcast. And we will catch you in the next episode.