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“Why you should start early.” With Jason Hartman & Cynthia Chen

I would start by asking that person what they are saving for and how imminent their need is. If you are in your 30s and saving for retirement, your risk tolerance is relatively high for short term volatility and I would recommend that you keep investing in the index fund, because most likely 30 years […]

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I would start by asking that person what they are saving for and how imminent their need is. If you are in your 30s and saving for retirement, your risk tolerance is relatively high for short term volatility and I would recommend that you keep investing in the index fund, because most likely 30 years from now the S&P 500 is going to be much higher than where it is today.


As a part of my series about “Investing During The Pandemic”, I had the pleasure of interviewing Cynthia Chen.

Cynthia is co-founder and CEO of Kikoff, a mission-driven startup that helps people build credit for free. A serial entrepreneur, she had built three FinTech unicorns before Kikoff. She also invests in start-up companies in both the U.S. and emerging markets.


Thank you for doing this with us! Before we dig in, our readers would like to learn a bit more about you. Can you tell us the “backstory” about what brought you to the finance industry?

Icame from a moderate-income family. When I was young my parents had to borrow money from friends and family to buy a TV, a computer, etc. I wish they had access to credit and didn’t have to deal with the social awkwardness of asking other people for money. That experience inspired me to work in consumer finance so that I could help others get access to financial products.

Can you share with our readers the most interesting or amusing story that occurred to you in your career so far? Can you share the lesson or take away you took out of that story?

I spent 16 months in Toronto as an expat when I was working at Deloitte. As soon as I accepted the expatriation assignment I found out I was pregnant. I still moved to Toronto as originally planned and later delivered my first son there, making him a Canadian citizen. To my surprise, Canada had an excellent maternity leave policy and new mothers could take up to 12 months of paid and job-protected maternity leave. As a result, employers often had to 12-month contractors to cover for women on maternity leave. Originally I thought companies might be reluctant to hire and promote women due to the “cost and hassle” associated with such as long maternity leave. I was wrong. That policy made it possible for working mothers to stay and thrive in the corporate world and I was surprised that 1/3 of Deloitte’s partners in Canada were women, which was far better than Deloitte U.S. Some female partners had more than three children. My key takeaway from that experience is that we need to better support working mothers in the U.S. A more generous maternity leave program is going to create more talented female leaders for companies and the investment in such programs have super high returns.

Are you working on any exciting new projects now? How do you think that will help people?

Yes, I am working on something that is super exciting. I co-founded a new company named Kikoff last November to help those new to credit build credit for free. We give our members a zero-interest, zero-fee credit builder loan which they can pay back over 12 months. We report their payment history to the major credit bureaus to help them establish credit. We also provide free financial literacy mini-courses to help people maintain financial health. So far thousands of people have used our free credit builder and we received overwhelmingly positive feedback. The majority of our members are Gen Z, which makes us feel optimistic about changing the way the next generation is entering the credit system and learning about credit. They no longer need to get into high interest credit card debt and or put down a lot of money for a secured credit card.

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?

I am blessed with many amazing colleagues and mentors who helped me tremendously over the years. If I am to name one particular person, I’d say Teresa Ressel, former CEO of UBS Securities and former CFO and Assistant Secretary of US Treasury. We met in 2012 at women in banking conference where she was hosting a roundtable discussion that I participated in. I was really impressed by her wisdom and genuine interest in helping people. After I shared my experience as a working mother, she gave me some very good perspective based on her own experience. Unfortunately, she left in a hurry and I didn’t get the chance to ask for her contact information. Three years later, I took a C-suite role for the first time and wanted mentorship from a woman who had been a C-suite executive. So I found Teresa on LinkedIn and reached out, wondering whether she still remembered me. She immediately responded and offered to chat. We quickly found out we shared a lot of things in common and built a wonderful relationship. My career evolved a lot during the past few years and she gave me so much advice on both professional and personal levels. She is in New York and I am in San Francisco but we make sure meet in person every time we happen to be in the same city. We text each other a lot and I know if I need to talk she is always a phone call away. Now I am a new CEO and I am continuing to learn from her how to be a good CEO.

Let’s shift a bit to what is happening today in the broader world. Many people have become anxious from the dramatic jolts of the news cycle. The fears related to the coronavirus pandemic have understandably heightened a sense of uncertainty and loneliness. From your experience, what are a few ideas that we can use to effectively offer support to our families and loved ones who are feeling anxious? Can you explain?

For those who are living under the same roof, I think spending time together doing things you all enjoy doing can help. For example, my 6-year old loves riddles so I bought him a new riddle book and we do riddles together as a family every day after dinner. Also, I think people tend to eat more and exercise less during the lockdown, so finding ways to exercise regularly can help alleviate anxiety and improve both physical and emotional health. At home, we bought paddle ball sets and sandbags so that we can play in the front yard. Last but not least, financial health is very critical too. Helping your loved ones figuring out how to plan, budget, and save during this difficult time is more important than ever.

Ok. Thanks for all that. Let’s now jump to the main core of our interview. As you know the stock market and the economy in general have become extremely volatile and uncertain. Many people “dollar cost average” and put aside a monthly sum into a long term savings plan for retirement, college, or a home purchase. If a loved one or a client came to you and said, “I have been saving and investing $500 every month in an S&P 500 index fund. Over the next few months until the dust settles, should I be doing something else with my money?”, what would you say to them?

I would start by asking that person what they are saving for and how imminent their need is. If you are in your 30s and saving for retirement, your risk tolerance is relatively high for short term volatility and I would recommend that you keep investing in the index fund, because most likely 30 years from now the S&P 500 is going to be much higher than where it is today. If you are saving for college and your child is starting college next year, I would recommend that you look at how much exposure you already have in the stock market and assess whether you can still pay the tuition if your stock portfolio value drops another 15%. If the answer is no you might be better off putting the money in an FDIC-insured CD.

Eventually the economy will recover and rebound. Certain sectors, like travel and hospitality might be hurting for a while. But other sectors, like technology and healthcare, might do very well. If someone wanted to prepare today to take advantage of the future recovery, what would you suggest they do?

Technology companies that provide distance learning and remote working solutions are going to benefit from this situation. Healthcare companies that develop treatment and vaccines are going to do well. Grocery delivery companies are good investments too. Besides these obvious ideas, I would also suggest that people look at how different sectors recovered and rebounded in Asian countries where people had returned to work after a period of lockdown. Data shows restaurants recovered more quickly than fashion retailers and cosmetics stores. People who got so tired of their own cooking are lining up at popular restaurants.

Are there sectors that provide exciting and lucrative investment opportunities today, specifically because of the volatility and uncertainty?

Pharmaceutical companies that have a high likelihood of developing effective treatment would be the most exciting and lucrative because of the volatility and uncertainty.

Are there alternative investments that you think more people should look more deeply at?

Lots of private companies are raising money right now at reasonably attractive valuations to secure a war chest, as they are concerned about the economy. Some distressed assets that are likely to recover after the pandemic are contained are worth consideration. Lots of private equity firms are looking at distressed assets right now. And, don’t overlook early-stage startups. Great companies are often born during a recession.

If a person in their thirties and forties came to you today and said that they have $10,000 that they want to put away today for a long term investment what would you advise them to do with it?

Put half in the stock market and a half in a high-yield checking or savings account. If the market goes south, double down.

Ok, thank you! Here is a more general finance question. You are a “finance insider”. If you had to advise your adult child about 5 non intuitive essentials for smart investing what would you say? Can you please give a story or an example for each?

  1. Start early. Nobody is a born investor. Investing can be learned and everyone can improve. The earlier you start, the more time you have to learn and to build your nest egg
  2. Be aware of the tail risk. The current situation is a perfect example. Black swans do exist.
  3. Diversify. Had you put all your money in real estate in 2007, you would have been broke by 2009
  4. Don’t think you can outsmart experts. In areas, you are not familiar with, consult an expert, even if it costs money. I have advised credit funds and VC funds in the area of FinTech investing. I helped them avoid costly mistakes
  5. Always do the right thing. Never ever think of trading with insider information. There are many examples out there, including Martha Stewart

Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?

Assume what you are doing is going to work and operate accordingly

You are a person of enormous 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. 🙂

Give a genuine compliment to a different person every day.

Thank you for the interview. We wish you only continued success!

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