You don’t have to make a million dollars to be wealthy. Assets — Liabilities = Net Worth. I fell into the “Wealth effect” pretty quickly on Wall Street and realized that I thought looking wealthy meant I was. That wasn’t the case. I started realizing how I had to put my money to work. That require knowledge and strategy more than a paycheck. Even when I became a teacher, I realized I could still increase my net worth.”
I had the pleasure of interviewing Chloe McKenzie, a wealth literacy expert and leader for wealth justice. She is the Founder and CEO of On a Wealth Kick, where she advises institutions and Fortune 500 companies on attracting and retaining new and more diverse clientele demographics through more accessible and inclusive financial practices. She is also the CEO of BlackFem, Inc., a 501(c)(3) nonprofit with a mission to transform school-based learning so that girls of color in underserved communities are empowered with skills, habits, and resources to build and sustain wealth.
Thank you for joining us! Can you tell us the “backstory” about what brought you to the Banking/Finance field?
I never thought I would end up in the finance industry. I was a legal theory and German double major at Amherst college, so I thought I was going to law school and would become a lawyer. Instead, one of my best friend’s parents, who had gone to law school and hated it and was then a managing director on Wall St, asked me to just give the trading floor a chance before considering taking the LSAT. I decided to intern and was thrown into the chaos and excitement of the trading floor during an internship before my senior year in college — I was hooked. I worked hard and received a fulltime offer at the end of that summer and returned to Wall Street as a trader upon graduating. Really, the reason why I was so enamored was because it was so fast-paced and required split-second decisions sometimes; it was like being on the soccer field. The subject-matter, debt that most Americans have, made it more intellectually stimulating for me, and the competitive atmosphere made it fun.
Can you share with our readers the most interesting or amusing story that occurred to you in your career so far?
This didn’t happen to me, but I remember that it completely changed me. My second or third week on the trading floor, a woman was nine months pregnant and was scheduled to get a C section. She returned 3 days after the C section because she told me if she didn’t come back, the men on her desk would take all of her clients. She got a C section and returned 3 days later…
Are you working on any exciting new projects now? How do you think that will help people?
Because I came to finance from a legal background, I started by working closely with due diligence. One of the products that jumped out at me right away were credit risk transfers. To an outsider, that doesn’t sound like anything particularly interesting or insidious, but when I figured out that they’re eerily similar to the credit default swaps that fueled the financial crisis, I felt awful. And complicit.
I decided I needed to do something to feel better about my day job. So, one day, I stopped by a community center in a nearby housing development and I quickly learned that the people there needed something I could give for free: financial advice. To do that legally, I studied and eventually received a graduate certificate in Financial Planning and became a certified General Securities Representative and Investment Advisor Representative through my own Investment Advisory.
Then I started putting that education to work. I would go to that community center whenever I could and I’d help as many people as possible.
Being in that community center brought something to life for me: the wealth gap. For too many women and girls of color wealth intelligence is out of reach, and the truth is, wealth literacy can transform the financial future for millions of people. So, I started an organization in 2015 called BlackFem with a mission to transform school-based learning so that girls of color in underserved communities have the skills, habits, and resources to build and sustain wealth. The idea behind BlackFem is simple: we’re taking wealth literacy to the schools and people who need it most. We’re closing the wealth gap by closing the knowledge gap first, but we’re not doing this just by adding another class to our students’ schedules or one-off workshops. Instead, we’ve come up with a comprehensive delivery model — which we call WealthRise™ — that makes wealth literacy the centerpiece of their daily education, five days a week. Today, BlackFem has reached twelve states. Our wealth literacy lessons are customized, affordable, culturally responsive, and social justice-oriented.
As impactful as BlackFem is, my work with wealth justice doesn’t end in the classroom. After I founded BlackFem, a slew of individuals and institutions outside of the education sphere began reaching out to me with a crucial question: what could they do to close the wealth gap? In order to expand my work beyond schools, I started a consulting business called On A Wealth Kick.
Since then, I’ve consulted for companies to make checking accounts accessible to undocumented people, combat liquid asset poverty in black communities, and make institutions of all stripes more financially inclusive — always with a focus on women and girls of color.
What do you think makes your company stand out? Can you share a story?
Over the past four years, BlackFem has developed a systematic model for breaking down these barriers and making wealth literacy a centerpiece of educational achievement. Together with our partners, we work to deeply integrate financial skills, habits and resources into every aspect of learning, through a model where the knowledge for building wealth that spans lifetimes is built in school five days a week. Through BlackFem, wealth literacy is not just a subject, it becomes the core subject.
Our programs speak to the unique needs and cultural experiences of the communities we serve. While we target underserved school systems with high proportions of girls of color to make the greatest impact, our curriculum embraces the entire classroom and extends into the community. We believe in working through schools to change these systems and have seen the results.
All too often, however, financial literacy programs miss the mark in reaching this target demographic. Messages that students should save on weekly allowance, mow neighbors’ lawns to raise money, or find extracurricular work to build cash for themselves, alienates girls from urban communities of color who stand to benefit most. Even before being given an appropriate financial education, tools and resources need to be provided to build a foundation for success.
BlackFem believes in wealth literacy that works at the intersection of the racial, gender, and social challenges that widen the gap in financial achievement. Through this intersectionalist feminist lens, we craft tailored educational experiences that speak to the actual lives of the children that can benefit the most from wealth literacy.
BlackFem’s core program starts with designing a tailored intervention plan and builds administrative capacity in collaboration with district leaders. Following design, teachers are empowered to lead classroom experiences through a Teacher Academy that teaches professional skills in financial, education and cultural outreach. Teachers then integrate their learning into the classroom through extensive BlackFem support and curriculum resources, and students are surrounded by a host of behavioral reinforcements that encourage them to learn. BlackFem monitors the success of its curriculum and adjusts as needed.
Every element of BlackFem’s programming is designed to achieve the optimal impact on populations with the greatest need with the fewest donor dollars. From identifying partner districts to programming delivery, BlackFem optimizes its approach to help girls of color build and sustain wealth.
For On A Wealth Kick, I am helping raise the consciousness about the inherent contradiction the financial services industry faces and create a new narrative about what we can do to close the wealth gap. What makes On A Wealth Kick different is that it applies My Wealth Justice framework, which asserts that by giving financially disadvantaged populations access to wealth education, we can solve pressing societal disparities that impact everyone regardless of gender, race, and affluence.
Wall Street and Finance used to be an “all white boys club”. This has changed a lot recently. In your opinion, what caused this change?
I would still argue we have a long way to go, but the growing discourse around equity and equality began to change the way we think about hiring. Courage from disadvantaged groups (e.g women, people of color, LGBTQIA people) to speak up and take their place and fight for the spots they deserve, coupled with raised consciousness from our society truly helped. Equally, (some) men believe in the importance of equity and doing something to change the current system.
Of course, despite the progress, we still have a lot more work to do to achieve parity. According to this report in CNBC, less than 17 percent of senior positions in investment banks are held by women. In your opinion or experience, what 3 things can be done by a) individuals b) companies and /or c) society to support this movement going forward?
1) Individuals — There has been progress, but it has been too little, too slowly. Less than 17% of senior positions are held by women who make up 50.8% of the US population. The vast majority of the 83% of those remaining senior executive positions are made up of white men who make up only 31% of the US population by the 2010 census. These numbers simply have to change, and for those numbers to change, there needs to be a major shift in our collective culture. It does not matter whether the change is through the carrot of demonstrating the proven financial benefits of executive diversity in the industry or through the stick of government regulation and legislation, but a change must be made deliver wealth equality.
2) Likewise, companies should be aware of the benefits of having board members that reflect and understand the issues of the client communities that they serve and companies should implement more generous family leave policies and policies that genuinely protect the rights of women executives if they go on maternity leave.
3) A woman should be president. Women have broken the glass ceilings in legislatures and the judiciary; we need to shatter the top executive job. It would be emblematic of a sea-change in our culture in accepting women as leaders in government and business. While it would not be a panacea that fixes all problems, it would demonstrate to America that women can and should be able to lead any of our major institutions.
You are a “finance insider”. If you had to advise your adult child about 5 non intuitive things one should do to become more financially literate, what would you say? Can you please give a story or example for each.
1) Shareholders get the right to vote for who sits on a corporation’s Board of Directors. Through a program I created for BlackFem, we gave a group of young girls of color in New York $100 each to invest. We called it the Junior Equity Fund. Once they were shareholders, they received voting rights, which of course, is a form of power. They subpoenaed the records of the parent company of Victoria’s Secret, and then ended up selling their stocks and made a profit. Then they tried to organize other shareholders that they found in the rolodex on the investor relations website to get more diverse representation on the board.
2) You don’t have to make a million dollars to be wealthy. Assets — Liabilities = Net Worth. I fell into the “Wealth effect” pretty quickly on Wall Street and realized that I thought looking wealthy meant I was. That wasn’t the case. I started realizing how I had to put my money to work. That require knowledge and strategy more than a paycheck. Even when I became a teacher, I realized I could still increase my net worth.
3) Your budget should be a reflection of who you are and what you value. I am a firm believer in retail therapy! Instead of living restricted, there are ways to build in the values and fun things we want to be happy. In the book the Geometry of Wealth, Portnoy says wealth is funded contentment. So, we need our financial tools to reflect that.
4) Everyone says this, but pay yourself first. To add to this, I also say make saving a fixed expense. If we do this then you’ll realize, like I did, that if we treat saving like a bill and do it consistently (definition of a fixed expense), then our net worth goes up every pay period/month. It’s quite liberating.
5) Homeownership and entrepreneurship are NOT the only pathways to wealth. Being able to manage debt and use leverage wisely is a staple in being able to “make money moves,” but homeownership as we saw in 2008 does not give us the liquid wealth we need to meet financial emergencies. When I got sick and found out I had three autoimmune diseases, having a home wouldn’t have been able to save me from medical bills as much as a more liquid asset could have. Luckily for me, my decision to have low-deductible health insurance made me not have to think about where I could get access to cash quickly since my medical treatments were covered, but most people buy into these financial fallacies and don’t see how it doesn’t really make sense all the time. It is the same with starting a business. I’ve started two, it’s hard and requires a lot of capital, much of which can be debt to start. Ownership, by definition, is wealth and I realized this more and more when I began to study wealthy people and the logistics of wealth inequality in the country.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?
My best friend’s dad told me I would hate law school and begged me to just try the trading floor. He’s the reason why I got into finance. Of course, my journey started with all of my teachers from school, but his help and foresight helped me get to this point.
Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?
My favorite “Life Lesson Quote” is from the great Shirley Chisholm “If they don’t give you a seat at the table, bring a folding chair.” Working in one of the most male dominated industries, seats are rarely given to women and even less frequently given to women of color. Every opportunity presented to me I walk in knowing that I belong and see myself as their equal.
You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the greatest amount of people, what would that be? You never know what your idea can trigger. 🙂
Black Feminism teaches us that if we direct our efforts to liberate the most systematically disadvantaged (i.e. women of color), then we liberate everyone. My dream is to make more of me, and that’s going to take some ambition.
It’s a big goal, and a small step on the journey towards creating a world where wealth — and wealth literacy — are equally and equitably distributed across all our communities.
I started BlackFem and On A Wealth Kick because I think we can — and must — work towards a future where every girl and woman of color has the tools to start building wealth, even in elementary school.
If we invest our resources and knowledge in our girls and women of color, they’ll invest them right back into their communities.
Thank you for all of these great insights!