Financial Literacy: Mellody Hobson at TEDxMidwest — Transcript

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1. 0:02[Music]
2. 0:08[Applause]
3. 0:11well I did have a chance to talk to
4. 0:12Warren Buffett but I said I could talk
5. 0:14to Warren Buffett another time and I'd
6. 0:16rather come and talk to you and what I'd
7. 0:18like to do is tell you a little bit
8. 0:19about myself and frame one of the issues
9. 0:21that I think is so important for you for
10. 0:24us for America for the world and as was
11. 0:28mentioned I run an investment firm it's
12. 0:30literally right across the street in the
13. 0:32Aon Center we're on the 29th floor
14. 0:34called aerial Investments and we invest
15. 0:36$6 billion for a lot of people and
16. 0:39organizations I also work on television
17. 0:41talking about money you could say money
18. 0:43is my specialty I'm on a bunch of boards
19. 0:46including Dreamworks Animation which is
20. 0:48kind of cool because we go to board
21. 0:49meetings and watch movies which is fun
22. 0:51and this year I'm actually getting
23. 0:54married too so I've got a lot of stuff
24. 0:57going
25. 0:58on I know it's been a great time and you
26. 1:01might hear all that and think like well
27. 1:03you know I've always had it together and
28. 1:04everything's perfect and this that and
29. 1:06the other and I have to tell you I
30. 1:08definitely didn't start off that way and
31. 1:10it's still not that way when I was
32. 1:12growing up I am the youngest of six kids
33. 1:14in my family and in my family I'm really
34. 1:17young so my oldest sister is 25 years
35. 1:21older than me and we have the same
36. 1:24mother so it's a big gap 25 years older
37. 1:28so when I was growing up my sister made
38. 1:30a point of making sure to tell me that I
39. 1:32was not
40. 1:34planned they did it a lot and when
41. 1:36you're like 20 5 years old your sibling
42. 1:39and you're five and your sibling says
43. 1:41things to you like you know we found you
44. 1:44by the doorstep you actually believe
45. 1:47them so I had to work through that for a
46. 1:49long time thinking that I didn't belong
47. 1:51when I grew up my mom was a single mom
48. 1:54and she struggled like a lot of single
49. 1:55moms do six kids and um we had like a
50. 2:00really crazy life and I say it wasn't
51. 2:02boom or Bust It was kind of bust or
52. 2:05normal and so we'd either like have a
53. 2:07place to live and things would be fine
54. 2:09or we'd be getting evicted or our phone
55. 2:11would get disconnected or our lights
56. 2:13would get cut off or our car would get
57. 2:16repossessed or my mother I remember this
58. 2:19that in order to get me to school she
59. 2:21would go to the gas station and ask the
60. 2:23gas attendant if we could borrow $5
61. 2:25worth of gas and so she was one of those
62. 2:28moms who would do anything for me but it
63. 2:30was definitely one of these lives that
64. 2:32was very very challenging but my mom
65. 2:34also was one of these people who she
66. 2:36didn't always have the best money sense
67. 2:39so an example would be like if it was
68. 2:40Easter we'd get new Easter dresses
69. 2:43instead of paying the phone bill and it
70. 2:45was something that never sat with me and
71. 2:48so I always tell people I do not think
72. 2:50it's an accident that I work in the
73. 2:51financial industry because as a child I
74. 2:54was desperate to understand money
75. 2:57desperate I hated the fact that I felt
76. 3:00this insecurity around money so I was
77. 3:03very fortunate I went to good schools I
78. 3:04went to St ignacius and then I went to
79. 3:07Princeton and Princeton was an amazing
80. 3:10place and between my sophomore and
81. 3:11junior year at Princeton I was an intern
82. 3:14at aerial Investments where I work today
83. 3:17and I didn't know anything about the
84. 3:19stock market I didn't know anything
85. 3:20about investing but I went and worked at
86. 3:22this firm and I fell in love with the
87. 3:26business and all of us see every single
88. 3:28day on the radio or we on the radio or
89. 3:30we see on television what the Dow did
90. 3:32and what the S&P 500 did or the NASDAQ
91. 3:36and I didn't even know what they were
92. 3:37talking about at that point now I do and
93. 3:40it was not surprising because we don't
94. 3:42learn about investing in school in
95. 3:44America in most schools and it's one of
96. 3:47these things that boggles the mind I
97. 3:50always tell people that it's amazing to
98. 3:51me that in high school today you can
99. 3:53take wood shop or Auto as an elective
100. 3:57and not take a class on investing and it
101. 4:00always leads me to ask people a very
102. 4:01simple question who whittles in their
103. 4:04spare
104. 4:05time who cleans their own carburetor
105. 4:08right but you can actually take these
106. 4:10kind of electives but you can't take a
107. 4:12class in investing and that's been
108. 4:13something that has bothered me in many
109. 4:15ways has guided the work that I do so
110. 4:18after graduating from Princeton I came
111. 4:19to work at Ariel I started at the bottom
112. 4:22and I have to tell you it was like one
113. 4:24of these things that was so great when I
114. 4:26started and this is going to sound very
115. 4:28perfunctory but what I loved about my
116. 4:30work is getting a paycheck I was so
117. 4:34excited to be able to pay my bills I
118. 4:37would sit in my bed in my little studio
119. 4:39apartment and I would just be grateful
120. 4:41that I knew I could pay my rent and my
121. 4:43phone bill and my first starting salary
122. 4:46at Ariel was 20 was $35,000 a year it
123. 4:49seemed like a million I felt like I was
124. 4:52flush with cash no of course I wasn't I
125. 4:54had expenses and you know I had to keep
126. 4:57a roof over my head and feed myself and
127. 4:59things like that
128. 5:00but it just felt so liberating to have
129. 5:03money and even though it wasn't a lot it
130. 5:05was enough and I was convinced that that
131. 5:07point from that day forward I would live
132. 5:10my life very differently than how I grew
133. 5:12up and I would take responsibility for
134. 5:15myself financially so I'd never be in
135. 5:17the situation that I felt before and
136. 5:19that that level of
137. 5:20insecurity so one of the things I wanted
138. 5:23to do today was to shape how that has
139. 5:25evolved from that moment when I got that
140. 5:27job and I wanted to do it with some
141. 5:29quotes that I think really frame how I
142. 5:31feel about this issue and how I feel
143. 5:33about what has happened thus far and I
144. 5:35always think of these has been great
145. 5:36lessons that I've learned I'm one of
146. 5:38these people who is a voracious reader
147. 5:40I'm sure like many of you and I find
148. 5:43myself I always read with a pen because
149. 5:44I was taught to do that in school or
150. 5:46pencil and I always find myself
151. 5:48underlining or ripping out quotes or
152. 5:51pages that really speak to me and I keep
153. 5:53them on my desk and pinned up on things
154. 5:56and these are a few of them that
155. 5:57actually like changed my life when I saw
156. 5:59them
157. 6:00and the first one I have to tell you I
158. 6:01found in the most unlikely place
159. 6:04Cosmopolitan
160. 6:05magazine very high brow right but it was
161. 6:09this quote by this woman named Judy
162. 6:10Collins who was this folk singer from
163. 6:12the 60s I didn't know her but I guess
164. 6:15she was a really big deal back then and
165. 6:17Judy Collins said something that just
166. 6:19like spoke to me she said as women we
167. 6:23are raised to have rescue fantasies and
168. 6:26I'm here to tell you no one is is
169. 6:31coming no one is coming now this is
170. 6:34actually easy to think about when you
171. 6:35think about growing up as a girl we have
172. 6:39a situation where we read fairy tales
173. 6:41all of us have read fairy tales boys and
174. 6:43girls but in the fairy tale the girl
175. 6:46always gets rescued I mean Cinderella
176. 6:49got rescued Rapunzel got rescued Snow
177. 6:52White got rescued Shrek even rescued
178. 6:57Fiona and so we get hired hardwired to
179. 7:01believe someone will come and take care
180. 7:03of us and I read that quote and it
181. 7:06wasn't even just about being a girl or a
182. 7:08woman I read that quote and I said to
183. 7:10myself what if from this day forward I
184. 7:13led my life as if no one were ever
185. 7:16coming that if I'm all I've
186. 7:20got what kind of decisions would I make
187. 7:23and how would I do things differently
188. 7:25and it was a life-changing question and
189. 7:27I decided if no one is coming you are
190. 7:30going to take ultimate responsibility
191. 7:32for yourself if no government is going
192. 7:34to rescue or no parent is going to
193. 7:36rescue or no man or woman is going to
194. 7:39rescue then what decisions will you make
195. 7:41to really be in charge of your life and
196. 7:43I said again that's what I knew
197. 7:45financially I would make sure I was
198. 7:48saving and I was investing and I was
199. 7:50able at all times to support myself no
200. 7:53matter what no I came to this naturally
201. 7:55because my mom was very independent in
202. 7:57some ways you know she was the single
203. 7:59mom but she always worked and she always
204. 8:01taught me that anything was possible and
205. 8:03she very much was about making sure you
206. 8:06could stand on your own two
207. 8:08feet and she always you know she was
208. 8:11very clear about the fact that you know
209. 8:13people will come and go in my business
210. 8:15we have disclaimers when we show
211. 8:17performance of Investments and I think
212. 8:19about it a lot when it comes to um
213. 8:22relationships in our hedge which we have
214. 8:25the copy on our performance it says past
215. 8:27performance is no guarantee of future
216. 8:29result results when you think about that
217. 8:31in terms of people that you might date
218. 8:33you think about it in terms of all the
219. 8:34things that are going on that led me
220. 8:36again to have this strong belief about
221. 8:38taking control now the second quote that
222. 8:41I read was one that I really liked for a
223. 8:43reason that became clearer to me later
224. 8:46it was a quote by Neil Simon and he said
225. 8:48if no one ever took risks Michelangelo
226. 8:52would have painted the cistin
227. 8:54floor now I didn't really understand it
228. 8:57until I went to Italy and I went to the
229. 9:00cistin chapel and they explained to me
230. 9:03how Fresco are made which is what the
231. 9:05cistin chapel is Fresco are you know you
232. 9:08look up the cistin chapel it's many
233. 9:10stories up and they tell you the story
234. 9:12that when the pope went to Michelangelo
235. 9:14and he asked him to paint the cistin
236. 9:16chapel he originally said no he was like
237. 9:18I don't want to do that that's really
238. 9:19hard and the pope said no you don't
239. 9:22understand Michelangelo being a good
240. 9:24Catholic he said if you say no to me
241. 9:26you're going to burn in hell so
242. 9:29Michelangelo said I think I could
243. 9:30rethink
244. 9:31it so he decided to do the cine Chapel
245. 9:34now why was it really hard a fresco is
246. 9:37plaster and you paint while it's wet and
247. 9:41the way it works is it starts with the
248. 9:42colors each color is a family so if
249. 9:45you're blue you're sky blue your family
250. 9:48is sky blue your father was sky blue
251. 9:51your grandfather was sky blue you mix a
252. 9:54very specific shade of sky blue and it's
253. 9:56exactly the same every single day
254. 10:00and if you're yellow you're a certain
255. 10:01kind of yellow etc etc so all the
256. 10:03colorists are down blending the colors
257. 10:06and what Michelangelo does he Paints the
258. 10:08design on a thin piece of tissue paper
259. 10:11he puts the tissue paper up on the
260. 10:12ceiling and they take tiny little pins
261. 10:15and they outline the drawing with the
262. 10:16little pens they pull the tissue paper
263. 10:19down now he can see the drawing now he
264. 10:20takes the paint it's wet remember it's
265. 10:23plaster he's painting but he can't see
266. 10:26anything he doesn't know if it works
267. 10:28until it dries and if it doesn't work
268. 10:30they take a chisel and they chip it down
269. 10:33and start all over it took Michelangelo
270. 10:35years to paint the cistin chapel so many
271. 10:38years that after he was done they said
272. 10:40he had a problem with his neck and he
273. 10:42couldn't look
274. 10:43down so you say well how does this all
275. 10:45fit into Neil Simon's quote the floor
276. 10:47would have been easier right and so I
277. 10:50started to think about that in terms of
278. 10:51life and I started to think of it in
279. 10:53terms of investing life and I think
280. 10:55about especially today all of these
281. 10:56individuals who are risk averse they
282. 10:59don't want to take risks they have their
283. 11:01money sitting in cash which is basically
284. 11:02making nothing or they say I'm scared of
285. 11:05the stock market and I don't want to
286. 11:06invest and by being scared they actually
287. 11:09lose out over the long term because over
288. 11:11the long term the stock market has
289. 11:13outperformed all other Investments yeah
290. 11:15we might have bare markets we might have
291. 11:17terrible times but bull markets follow
292. 11:19bare markets bare markets follow bull
293. 11:21markets and if you're disciplined and
294. 11:23patient and longterm in you're saving
295. 11:25investing you'll do fine over time and
296. 11:28it helps of course when you start really
297. 11:30early especially like you so that's why
298. 11:33in taking risks if no one ever took
299. 11:35risks you'd paint the floor well the
300. 11:36same as somewhat true in investing if
301. 11:38you don't take risk you actually find
302. 11:40yourself not really getting very far the
303. 11:43third quote is something I read by
304. 11:44Winston Churchill he said it during war
305. 11:47he said If You're Going Through Hell
306. 11:49keep
307. 11:50going I read that and I was like he is
308. 11:53so right how many times have you been in
309. 11:55Hell things have been so bad and all you
310. 11:57say to yourself is I've got to keep
311. 12:00going I've got to keep going through
312. 12:02this I remember when this when I was a
313. 12:03child there were times we literally
314. 12:05would have all of our stuff in a car and
315. 12:08I'd be sitting there thinking to myself
316. 12:09I just can't wait until I'm big I can't
317. 12:12wait until I can take care of myself I
318. 12:13can't wait until I can be you know the
319. 12:15one making sure that I'm okay not
320. 12:17because my mother didn't try very hard
321. 12:19and do everything within her power but I
322. 12:23just felt that if I were in control I
323. 12:25was going to be able to do it
324. 12:26differently and that's the thing about
325. 12:28when you're in hell you have to talk
326. 12:29yourself through how to get out of it
327. 12:32because the one thing about life we all
328. 12:34have our moments in hell and the one
329. 12:36thing I've learned hell is not real
330. 12:38estate that I like to occupy for very
331. 12:40long I only like to stay there for short
332. 12:42periods of time I don't want to spend
333. 12:44extended times in hell and you all know
334. 12:46what I mean we all have our version of
335. 12:48it it could be a bad relationship it
336. 12:51could be a bad test it could be
337. 12:53something but there there are times when
338. 12:55we are going to suffer it's just life
339. 12:58now suffering for me occurred again
340. 13:00related to the stock market in the crash
341. 13:02of 2008 it was
342. 13:04horrific I watched my entire life and
343. 13:07all the work that I do do just fall
344. 13:11apart I watched the stock market just
345. 13:13bleed red ink every single day and all
346. 13:15of this money that we had made for
347. 13:17clients just go away and it was
348. 13:19extraordinarily challenging and and in
349. 13:22many ways really tested by metal but I
350. 13:25learned that you keep going and we kept
351. 13:28going and we recovered and we did better
352. 13:30the next year and better the year after
353. 13:32and things are much better because again
354. 13:35we know that tough times don't last
355. 13:37tough people do so if you're tough and
356. 13:39you can get through it if you can keep
357. 13:41going you'll make it and that's true of
358. 13:43investing it's just true of
359. 13:45Life the last quote I learned from was
360. 13:48from Teddy Roosevelt great president
361. 13:51Teddy Roosevelt said do what you can
362. 13:53where you are with what you've
363. 13:56got for me that meant to give
364. 14:00and giving is as much as a part of
365. 14:02making
366. 14:03money it's as important to me so I love
367. 14:07the fact that I can help people make
368. 14:08money so they can give it away that's
369. 14:11something to me that is really really
370. 14:12neat and I think that we are all in the
371. 14:15position to give in whatever way we
372. 14:17choose to do it might not be money it
373. 14:18could be time it could be mentorship it
374. 14:20could be Insight it could be being a
375. 14:22great friend sister brother husband wife
376. 14:25SP whatever it might be friend at work
377. 14:28but doing what you can where where you
378. 14:29are with what you got was the part that
379. 14:31spoke to me because I find a lot of
380. 14:33people tell you why they're not doing
381. 14:35something when they have more money
382. 14:37they'll do it when they have more time
383. 14:39they'll do it when this when that what
384. 14:41is wrong with now we was saying at Ariel
385. 14:44that we've admired the problem long
386. 14:47enough it's time to do something about
387. 14:55it and so my version of doing something
388. 14:58about it is I want to live live in a
389. 14:59financially literate society and so what
390. 15:01we've done is we started a school our
391. 15:03school has a saving investment
392. 15:04curriculum we give every first grade
393. 15:07class 20,000 real dollars to invest and
394. 15:10the Mone Money Follows them through
395. 15:11their grade school career and we want to
396. 15:13make them understand money like I was
397. 15:16desperate to understand it as a child
398. 15:19and we're doing it in real life 15 years
399. 15:21in 550 kids so where does that leave me
400. 15:30I'm 44 years old I know you're thinking
401. 15:3344 yes 44 44 years old I am not counting
402. 15:39on being rescued and I suggest you not
403. 15:41count on that either I'm hoping to
404. 15:44create my own 16 Chapel when I'm in hell
405. 15:47I keep going and I am idealistic enough
406. 15:51to believe that I can make the world a
407. 15:53better place and I know you can too
408. 15:56thank you
409. 15:59[Music]