We’re up to expert #5 in our “Leave it to the Pros” series, where we ask the nation’s top financial experts all of our burning money questions. Today, we’re talking with Manisha Thakor, personal finance expert and author of the books On My Own Two Feet, Get Financially Naked and the upcoming title, MoneyZen.
Q: Hi, Manisha. Thanks so much for taking the time to chat with us today. Tell me, how did you get started in the financial world? What do you do today?
A: After earning my MBA from Harvard Business School and spending 15 years working in financial services, today I spend my time teaching, writing and speaking about the basics of personal finance for women. The core of my work is a concept I call “MoneyZen” – a joy based approach to personal finance. It is a framework I use to help people feel less financial stress and more joy in life.
It came about after I realized I was answering the same basic 20 personal finance questions again (and again!). My answers were the same as all the other financial experts and yet people continued to either not absorb – or not feel compelled to act on – that information.
Since I’ve yet to meet a single person who specifically wanted to do themselves financial harm, it finally hit me like a ton of bricks. Perhaps the answer was not in more information but rather in the existing information being seen and heard through a different lens. You can think of it as bringing the left and right brain together in the practice of personal finance, blending the tactical/practical with the spiritual. Answering not just what to DO but thinking about WHY we’re doing it in the first place.
Q: Wow! That’s quite an impressive resume. You’ve also written several books on personal finance. What inspired you to write these books? What did you learn from writing them? Any plans for another?
A: My first two personal finance books (On My Own Two Feet, a modern girl’s guide to personal finance, and Get Financially Naked, how to talk money with your honey) were designed to take the overwhelming sea of financial information and boil it down into a concise, fun, need-to-know basis. At the time of co-writing both of these books, I thought the biggest obstacle to financial literacy and confidence around money was that people wanted the vast amount of available information boiled down into a simpler package.
The number one thing I learned from these two books is… don’t quit your day job just because you write a book or two. I say that partially in jest, but also seriously. Trying to spread a message through a book is a labor of love… with emphasis on the word “labor.” I had such high hopes that putting this simplified information in the hands of women would revolutionize lives. While many women have reported back over the subsequent years that the books have helped them enormously, it was a fraction of the lives I had hoped to touch.
Since those books came out in 2007 and 2009, respectively, I’ve had a change of heart. As I’ve been traveling around the country speaking, I’ve come to believe the reason so many people feel intimidated or overwhelmed by personal finance is that it feels cut off from the very essence of their lives. It does not touch their souls. It feels like this emotionless, sterile subject that is disconnected from the heartbeat of daily life. So now I’m working on a third book tentatively titled MoneyZen: your path to less financial stress & more life joy. It contains nine money mantras that put heartfelt context around the tried and true financial advice so many have heard but not yet felt called to heed.
Q: We can’t wait to read it! You’ve really positioned yourself as a financial expert for women. Why is women’s economic empowerment so important to you? How can a woman’s financial life empower her?
A: One of the most common questions I get asked is, “why women?” On one level I focus on women because we have stronger financial headwinds in that right now we earn less on the dollar than men, spend more years out of the paid workforce tending to children and elderly parents, and live longer. So we have less coming in but need it to last longer. This means we have less wiggle room when it comes to implementing the basics.
On another level I’d argue that Nicholas Kristof nailed it when he questioned what would have happened if it had been “Lehman Sisters” instead of “Lehman Brothers.” For centuries finance has been male dominated — everything about the industry from the lingo to the career paths have a male vibe to them. Is it any wonder so many women feel cut off from money?
So the most important thing I believe that a woman can do to financially empower her life is to start viewing money as a positive energy force flowing and connecting us all, and commit to jump in and learn more about that field. Tactically it starts with living within your means, saving early, investing regularly, and protecting yourself. But even before those tactical steps, opening up your mind to money as something you receive in exchange for your life energy in working is a vital step. It helps put money in a more neutral – and therefore I think healthier – context.
[Check Your Credit: Don't Guess. Know.® Get your free credit report and score. No credit card required.
I also think money gives people voices. And for far too long in history women have not had equal access to education and work opportunities and, therefore, have not had equal access to money and a voice. Money gives you choices and options. To me, it is a key that enables you to open the doors of life that speak the loudest to your soul. I’d love to see a world where both men and women have equal opportunities to turn those door knobs. And I find that financial literacy and women’s economic empowerment go hand in hand with increasing the ability of people of both genders to truly live the lives that make their hearts sing.Q: That’s quite a powerful message. What are some of the most common mistakes women make with regards to their finances?
A: A recent study from Transamerica’s Center for Retirement Research indicated that on average women start to save for retirement two years later than men. That may not seem like much a of a difference but compounded with lower wages and more time out of the work force, it means that women can easily end up with a significantly smaller nest egg than men (despite having more years that they need to nibble off that nest egg due to longer life spans).
Another mistake I see is handing over the financial reigns to partners, parents, or others. I like to think of financial health as being similar to your physical health. I’m all for consulting experts. But at the end of the day, you’ve got to be the one taking final responsibility for your well-being. When it comes to money I also feel like young boys are given subtle messages from a young age that they must provide, whereas young girls all too often are given the opposite message: that they should strive to be “picked” by someone or something outside of themselves to solve their problem. So “owning your finances” is imperative for women.
Lastly, I often see younger women being too conservative with their retirement investments. If you are in your 20s, 30s, and 40s and you have IRA or 401k type accounts, you are at the ideal stage in life to take on equity risk as you’ve got enough years ahead of you to whether the volatility. Alas, while that conservative nature can be a benefit to women in later years, it’s not in these formative financial decades.
Q: What is the most important piece of financial advice you’ve ever received?
A: No one will ever care about your money as much as you do. I don’t mean that you should make money the center of your universe; simply that, as with your health, your spirituality, your relationships, your education, etc., your financial well being is something that must be “owned” by you first and foremost if it is to flourish.
The next most important piece of advice I ever received was to “start saving now.” I truly believe those are the three most powerful words in all of personal finance.
Q: If readers could do one thing to improve their financial lives, what would you tell them to do?
A: Ask someone over the age of 65 what was the best financial move they ever made and what was the worst move. I think too much common sense advice has been lost intergenerationally when it comes to personal finance. I think folks who take the time to ask this question will be surprised at both the simplicity and the power of the messages they hear.
I’ve yet to hear someone say their best move was buying leveraged gold futures or shorting a penny stock. Typical answers are: live within your means, invest using low costs funds (especially index funds / ETFs), have proper insurance (term, home, auto, health), and talk openly and honestly about money in your primary relationship. The most powerful financial steps are often quite straightforward.
Learn more about Manisha at www.manishathakor.com.
Related articles:
- 5 Top Financial Scams to Avoid in 2012
- 4 Things to Look for in Your Credit Report
- Why Your Daily Commute Is Making You Poor
- Leave It to the Pros: Q&A with Financial Expert Carmen Wong Ulrich
- Save Money Winterizing Your Car
Quizzle.com is the easiest way to get a complete understanding of your credit. Visit Quizzle.com to get your free credit report and score. No credit card or social security number necessary!
