In her book ‘Does This Make My Assets Look Fat?,’ Susan L. Hirshman simplifies often-complicated material into girl-talk terms that any failed dieter can digest
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Do you find managing your money as hard as losing weight?Susan L. Hirshman leverages the similarities between dieting and budgeting in “Does This Make My Assets Look Fat?” which not only ranks as title of the year in personal finance how-to books, but also squeezes an MBA’s worth of practical advice into a fun and kicky little black dress.
With chapters including “Naked in Front of the Mirror,” “Portion Control” and “Going Shopping,” the personal finance expert and former managing director of wealth management for JPMorgan Chase simplifies often-complicated material into girl-talk terms that any failed dieter can digest.
Whether you’re counting calories or counting Benjamins, Hirshman says the formula for success is the same: education, dedication and empowerment.
CreditCards.com: It turns out there are a lot of similarities between dieting and personal finance.
Susan L. Hirshman: It’s amazing. And don’t let the skirt on the cover fool you; the advice is just as valid for men. Women just talk about it much more.
CreditCards.com: The most obvious similarity being that they are both things that are good for us that we would rather avoid.
Hirshman: Yes, and who can blame people? Even for me, writing the book as an investment professional was such a good exercise because I really had to think about how to differentiate all the investment products and how to explain asset allocation and modern portfolio theory in plain English, and it’s like, “No wonder everyone’s confused! It’s overwhelming!”
My goal was to take the overwhelming out of it and give people the courage and confidence to become more focused and more active in their personal finances. I don’t mean active in trading stocks and bonds; I mean in knowing where you are now and what you want in the future so you know how you have to save.
CreditCards.com: The first step in any diet is to stand naked in front of the mirror, which in this case involves figuring out your net worth.
Hirshman: Exactly. The other thing that relates so much to dieting is the sense of guilt — “I should have been better at this” — and learning forgiveness. No matter how old you are, it’s never too late, just as with dieting, it’s never too late to lose weight and get healthy. There’s always something you can do. People in their 50s who say, “I’m never going to retire,” there are ways. There are adjustments, things you can do.
CreditCards.com: At this historic time when women now control most of the money in this country, why do women feel so ill prepared to handle it?
Women in their 40s and early 50s are the first generation that really has been in charge of their retirement savings because, prior to that, most retirements were paid by pension plans from their husbands.
Hirshman: It’s simple: They don’t teach this to you in school. So where are you supposed to learn this? Women in their 40s and early 50s are the first generation that really has been in charge of their retirement savings because, prior to that, most retirements were paid by pension plans from their husbands. Investing in the past was very male-dominated. Even the language — winners, losers, bulls, bears, beta, alpha — very masculine types of words, and it was very competitive, a race to see who gets the most toys. Some women prescribe to that, but not all women do. That’s an issue as well.
CreditCards.com: Unlike a lot of personal finance books, yours doesn’t attempt to turn all readers into MBAs. In fact, you spend a lot of time teaching readers how to get the most out of a financial adviser. But isn’t that like cheating on a diet?
Hirshman: No matter how educated you are, it doesn’t matter whether you are a stay-at-home mom or a brain surgeon, if this is not your field of expertise, many people just don’t have an interest in it. What you have to do is set up what you want, and set up your spending versus saving. No one else can do that except for you. Then the rest can be outsourced, but you can outsource it with a base of knowledge.
If you’re willing to pay to get your bathroom cleaned, you should be willing to pay to get expert financial advice.
Can I clean my bathroom? Yes. Do I want to take the time and look at all the different products that exist today and figure out the best way to clean it? No. I know what I want my bathroom to look like, and I outsource that job to somebody else. If you’re willing to pay to get your bathroom cleaned, you should be willing to pay to get expert financial advice.
CreditCards.com: Many women approach financial advisers with the same dread that they approach automobile repairmen. How can they overcome that?
Hirshman: The way that you alleviate the fear of getting ripped off is education. When you go into an adviser’s office on first meeting, if they do all the talking and telling you how great they are and this product you should be in and they have a solution, that’s typically a sign that they tend to be focused on products and not your goals. So maybe you should try to search out somebody else.
What you really want to listen for are three things: Do they have a systematic process for figuring out what is right for you; can they tell you why it’s right for you; and can they answer your every question until it’s clear to you? If you can’t get the answers you’re looking for, that make sense to you, then it’s not a good fit. Because there is so much intimacy involved with your money, it’s important that you feel very comfortable, safe, and that you can trust them and ask them questions.
CreditCards.com: What’s the biggest mistake we make in working with an adviser?
Hirshman: The biggest issue I see is that people do not ask questions. You have a responsibility to know and figure out what you want and question, question, question. If you and your husband are meeting with your adviser, and you don’t understand and your husband pooh-poohs you and says he’ll explain it when you get home, don’t let him!
CreditCards.com: How do you suggest women rein in their credit cards?
Hirshman: It comes down to empowerment. I’m not telling you what to do; you need to make the choice. You need to tell me what you want. It’s getting people very much in tune to what they want and the ramifications of their choices. That’s half the problem: People will say, “Oh, I’m just going to get this and I’ll pay it off over time.” That’s like cheating on the diet.
CreditCards.com: Just as with dieting, it helps to have a buddy.
If you and your husband are meeting with your adviser and you don’t understand and your husband pooh-poohs you and says he’ll explain it when you get home, don’t let him!
Hirshman: Sure. Studies show that people do much better when they just have some guidance, when somebody is there with them. One of an adviser’s main goals is to help you through the very volatile times. The market is extremely volatile right now and many people don’t have the stomach to handle it; they want to take all their money out. If you were working on your own, you probably would. Is that necessarily the best decision? Not always. The adviser’s job is really to protect you from your emotional self.
CreditCards.com: Why do spouses have so much trouble talking about money?
Hirshman: Generally speaking, women tend to look at their finances as security. It all has to do with the bag lady syndrome; so many women are just so scared that they’re going to be out on the street. I have it, friends of mine have it, we’re all very credentialed, very smart and hardworking, we have money in the bank, but it’s just something in the back of your head. Whereas men tend to look at their wealth more as a means to an end; if I have this wealth, I can buy this. So if one is looking at buying a car and the other is looking at being homeless, who do you think has the stronger feelings?
CreditCards.com: Many people just won’t address their finances. What’s wrong with that?
Hirshman: You need to know where you are. Being an ostrich with your head in the sand is just not good. When people say to me, “Oh, I just don’t like to think about it,” the ironic thing is, they’re probably thinking about it all the time because you’re nervous because you don’t know where you stand. Do I have enough? Am I good? Am I bad? Am I horrible? So you spend a lot of time throughout the day worrying about these things. If we could just for once see what our life looks like and get rid of all of that chatter in our brain, how freeing would that be?
CreditCards.com: Let’s face it; both diets and budgets are hard. How do you get someone to stick with it?
Hirshman: That’s why I hate the word budget and I like the term spending plan. Because instantly, budget means, “Oh my God, I’m not going to be able to charge anything,” and all of a sudden it’s a deprivation. We’re thinking about all the things we can’t have, so it’s very negative versus what you’re going to get. Maybe you’re going to get freedom, which means you’ll be able to change jobs; if you pay your credit cards down, you will not be worrying so much; you’ll be able to do more things with your family because you’ll be doing things that don’t cost so much; you’ll be able to retire. So you need to focus on what you’re getting out of this.
See related:Q&A with ‘Get Financially Naked’ author Manisha Thakor, Q&A with finance guru Jean Chatzky, Q&A: Avis Cardella writes on overcoming shopping addiction, Q&A with Zac Bissonnette, author of ‘Debt-Free U’