HerMoney Podcast Episode 189: Mitch Albom On Love, Loss And Giving Back 

Mitch Albom: 01:57 Thanks for having me in here.

Jean Chatzky: 01:58 Thank you so much for being here and happy Thanksgiving.

Mitch Albom: 02:00 Yes, same to you.

Jean Chatzky: 02:03 I want to understand how you found Chika, but in order to do that, I think we need to take a step back and help our listeners understand how you found Haiti.

Mitch Albom: 02:16 Well, with a boom, you know, there was an earthquake and I had never been to Haiti before. I really didn’t know a whole lot about it or it’s geography, but I saw, like everybody else in 2010, the devastating earthquake. It looked terrible on television. And then two days later, a pastor in the Detroit area came to me. I have a radio program that I do in Detroit and he said, I have an orphanage that I run in Haiti and I think it’s been destroyed in the earthquake. I can’t get a phone call through and is there any way that you can help me, you know, spread the word or something. So he came and you know, I tried to do that and when he left I was so like, wow, an orphanage could be destroyed. You don’t even know it. There are children lying dead on the rubble somewhere that they couldn’t get the image out of my head. And so I helped organize a trip for him to go down there. I knew some people in the, our Senator was in charge of the armed forces committee and so he got us a 10 minute window to land in Haiti ’cause you couldn’t fly into Haiti. There were no planes or anything. And we had, I got a little, you know, tiny plane and we flew from Detroit to Haiti. We had 10 minutes to get into Haiti and we landed there a couple of weeks after the earthquake. And, you know what I saw there and when I went to the orphanage, thank God wasn’t destroyed, but it was so overrun and there were people everywhere, you know, injured and covered in white dust and everything around with piles of rubble and there were these children running around in all of this. And at one point it was a hundred degrees and I was wearing black jeans like an idiot. I don’t know what I was thinking to go to Haiti in black jeans and I was sweating and my arms went by my side and I looked down and there there were two kids who had taken my hand, well, little boy and little girl and they, they had just put their hands in my hands and they started walking me. And I always look back at that as like, I think they were just sort of walking me into their little world there and eventually walking me to Chika and I began to come back. You know, when I left, I organized a group of people in Detroit, you know, Detroit, you’re from there. We do things with our hands. So I got some roofers and contractors and plumbers and electricians, a lot of whom were out of work because of the recession. And we started to go down there every month and we stuffed everything we could into the hall of this plane, all kinds of tools. And we built the first bathrooms, the first showers, the first kitchen, the first dining room, eventually a school for these kids. But while we were going and we were really improving the place, I noticed the kids were still eating maybe one cup of rice a day. So I went to the pastor, I said, I don’t understand. We’re putting a lot of time and money and effort, what’s going on with the kids? And he said, well to be honest, I don’t have any money to run this place. I haven’t had money to run it in years. And in one of those moments that you look back on now and you go, what was I thinking? I said to him, really well, I could probably run it. I’ve run some charities in Detroit and you know, in my mind I’m thinking, how hard can it be? It’s an orphanage. He said, basically, praise Jesus. Hallelujah. Here it is. And, and it’s been mine ever since. And I’ve been operating it since 2010 and I’m there every month. I’ve admitted 46 new children over those years. So we have 52 children total and they go to school now, four hours a day in English and three hours in French, right on our premises. They all have their own beds, they eat three meals a day. We have doctors and we have nannies. We have 14 teachers for 52 kids. So it’s a pretty good ratio. And, my goal is to get them all, through there. We don’t adopt anything out. We call it an orphanage because that’s what it gets called. But no kids are ever adopted. And, our goal is to get them all college educated. I’ve got scholarships literally lined up for all 52 of them. All they have to do is pass the TOEFL test and make the grade and they’ll come to America, get their education and then go back to Haiti and make their country better. And hopefully put us out of business. And that’s how I ended up in Haiti. And a few years into it and a little girl named Chika came into my life and that was a whole other story.

Jean Chatzky: 06:15 She, as you described her in the book, was just a force.

Mitch Albom: 06:23 She was a force from the time that she was brought in. You know, the interview process is very heartbreaking because for every one that we can say yes to, we have to say no to 10 at least. And you know, you’re saying no to someone basically saying, no, you can’t have food and a bed and an education. You’re going to have to live in that tent and never go to school and, and scramble your way through life. That’s the hardest thing I have to do. It’s really, really hard. And you know, I suffer through those interviews and you know, you have to be sort of Solomonic about it. Chika’s story was she was born three days before the earthquake. On the third day of her life, her house collapsed around her and her mother. And somehow they lived, I don’t know how that happened. The roof fell off and I guess the walls came down and they were just left naked looking up at the sky. And that night she slept in the sugarcane fields. And for the next six weeks she was sleeping in the dirt, you know, three days old. So she was born tough, I imagine. And then two years later her mother died in that same rebuilt cinderblock house giving birth to her baby brother because there were no doctors present because there are no doctors present when most Haitian women give birth because they can’t afford it. They don’t go to hospitals, they just have babies at home. Something went wrong and she died literally in the bed that the baby was born. And Chika was plucked away by a godmother and never saw any her brothers or sisters or any of them again. And she brought her to us. And when she brought her to us, during the interview process, normally these kids are so shy when they’re brought and they don’t know where they are. They’ve never seen anybody like me maybe. And they look their heads are down and they never look up. She sat on her godmother’s lap with her arms crossed the whole time and was like looking at me while I was talking to her. God mother, like, are we done here? ‘Cause there’s some kids out there with a ball that I saw and I really want to play with them. And at one point she made, she just made a face, it means, and so I stuck my tongue out and she stuck her tongue out and I laughed and she laughed and I said, boy, she’s got spirit and courage. And I didn’t know how much she would need those things, but we took her and blessedly we took her because she would end up needing our help later on.

Jean Chatzky: 08:35 Couple of years in, you discovered she was really sick.

Mitch Albom: 08:41 Yeah.

New Speaker: 08:41 Brain tumor.

Mitch Albom: 08:41 Yeah.

Jean Chatzky: 08:42 And brought her to the United States for care. And as you described it, she built you a family.

Mitch Albom: 08:51 Yeah, well we didn’t know that was going to happen. We brought her up because her face was drooping and there was one neurologist we could find in all of Haiti and there’s only one MRI machine in the whole country. So they took the picture and the report came back two lines. The child has a mass on her brain and whatever it is, there’s no one in Haiti who can help her. That was it. So we brought her to America, not really knowing what it was, but we thought, well, American doctors, they’ll cure her. She’s only five years old. And we got, she had brain surgery at The University of Michigan hospital, Mott’s Children’s Hospital. And we went to the consultation thinking, okay, they’ll tell us how long it’s going to be before she goes home. Maybe a grade one tumor, hopefully not a grade two. And when we sat down the doctor sighed, which is never a good sign.

Jean Chatzky: 09:44 No. Been there.

Mitch Albom: 09:45 And he said, yeah. He said, I got bad news. This is something called DIPG. It’s in the pons of the brain. We can’t take it out and it’s always fatal and she probably won’t live beyond four months. And I said, is it a stage one or stage two? And he said, this is a four. And so that’s all I could hear when he said that. And in that room he basically said, so what do you want to do? And I said, what do I want to do? We know we came in here thinking, you’re just going to tell us how many months it’s going to be before she can go home. And now you’re asking us to make a decision on her life. And I said, what would you do? And he said, I would take her back to Haiti and just let her play for a month or two and then the symptoms will take over and she’ll be debilitated and she’ll die. And I thought back to that moment when she was sticking her tongue out at me and I said, oh no, we’re not going to do that. And I looked at my wife and she nodded at me. I said, this kid is a fighter, and if she’ll fight, we’re gonna fight. And we left that office and began what turned out to be a two year journey. She lived two years, which with DIPG is almost unheard of. And we traveled around the world, lived in Germany for a stretch of time trying to find immunology treatments, we’re here in New York, Sloan Kettering, coming back and forth here all the time for experimental treatments. And along the way we became a family, which was, something we didn’t expect. My wife and I were in our mid-fifties, we never had children of our own. We got married pretty late, we got married when we were very late thirties and it just didn’t happen. And so we had kind of resolved ourselves to being aunts and uncles. And then when I took over the orphanage and said, okay, I’ve got all these kids, but I’m there once a month, it’s not the same as them being in your house. And then all of a sudden there’s this five-year-old sleeping at the base of our bed, you know, and waking us up and saying, I have to go potty, you know, and, and breakfast. And in addition to all this stuff that a kid enters into your life when you’re a new parent, there’s this ticking clock of like, we don’t know how long we have. And so she couldn’t go to school. She was with us every minute. So those two years were very, very intense family building. And it taught me a great lesson about how families are made, which at Thanksgiving time is a good thing to keep in mind because I know a lot of people have different people at their Thanksgiving table. It’s not always their immediate brothers, sisters, mothers, fathers. You know, sometimes it’s a family of friends or acquaintances or, or people they’ve taken in or whatever. And I’m very cool with that. I mean, there’s lots of ways to make a family and we sure didn’t look like a typical family. You know, we were old enough to be her grandparents almost, her great grandparents. She didn’t look like us. She didn’t talk like us. You didn’t come from us. But we couldn’t have been more of a family than if she had been the spitting image of the two of us.

Jean Chatzky: 12:31 I loved the pictures of her in the book, there’s a picture of her and as you describe her sticking her tongue out at you, there’s a picture of her in a dress. You can’t tell that it’s yellow in the picture, but it’s Belle from Beauty and the Beast. And she just has this attitude. She’s looking at herself in the mirror. She is checking herself. She is, I look good. I was struck, I’ve read your work in the past. We’ve all read your beautiful work in the past and you’d like to write about lessons. You know, you wrote that you learned from your professor, Morrie Schwartz, that you have to live every day as if it’s the day that you could potentially die. And you learned a lot of things from this little girl. What were the most important?

Mitch Albom: 13:16 Well, there were several. In fact, I kind of set the book up that way. You know, I didn’t want to write a book that scared people because I know there are people who hear well, Oh, child dies. I don’t want to read that and I want to get to like the last 10 pages and not want to read it because she’s going to. So I flipped it on its ear and I, the very first page, you know that she died, but also on the very first page, she’s come back to me and she’s sitting at my feet in my office where I write every morning, ’cause that’s what she used to do. My wife, I would let my wife sleep in because she would have to deal with her later in the day. So early part of the day was my thing. So we’d get up together and make a little breakfast and go downstairs and she’d sit by my feet and I’d say, now Chika, you’ve gotta be quiet. Okay, Mr. Mitch. And I’d give her like a thousand things to play with. And it didn’t matter. She wanted 1,001. I said, you know, every 10 seconds she was interrupting me. And so the book is basically her back in my office talking to me and saying, well, you’re writing, why don’t you write about me? And I said, well, I will. No, write about me now. Okay, and when did I come to America? How you know, all these other questions. And so I tell her story. Along the way, she asked if I, she ever taught me anything and I said, you taught me a million things. And she says, well, write them down on a piece of paper. And so I wrote seven things for one, for each year that she lived. And oh man, I mean there’s so many, but you know, certainly about your time, you know, you think your time is, you think you’re living this life that can’t, there’s no more room in it. You know, you’ve got your work and you’ve got your friends and you’ve got your accomplishments and you’ve got your travel and you’ve got all this stuff. And then all of a sudden in comes as five-year-old and everything goes out the window and you have to make room. And even in your late fifties you can do it. You know, it’s amazing how much room there is when you set a priority to do that. And I wrote, you know how I, she would wake me up and I’d have to in the middle of the night, take her to the bathroom, wait outside. ‘Cause we always, you know, privacy please. That’s what she was privacy please. So she would go in and, and I’d take her back to bed, I’d get back into bed and my wife would say, is she ok, I’d say she’s fine. And then go back to sleep. And I said, you know, when you, the most precious thing you can give anyone, Chika, I wrote this, is your time because you never get it back. But when you don’t think about getting it back, you’ve given it in love. And I learned that from her, you know, ’cause you never, I never, never thought like, Oh what a pain. It was the opposite of what it was, we were so happy to have her there with us and so she taught us that. She certainly taught me about my marriage. You know, I was one of those guys when I was younger who thought, well man, if we have children, I can just see it now. You know, my wife’s going to be with the baby all the time and I’m going to be like the third wheel over here and every time I’m going to want to do something, it’s going to be you have a child now, you know, that kind of thing. And that was so stupid. I was just an idiot to even think that. And that was brought home to me when Chika was with us. And I watched how, not only did I not lose my wife, I discovered this whole other side of her, you know, this whole rich, loving, caring, nurturing maternal side that I didn’t even know was there. ‘Cause you know, we never had this situation and she would sit with Chika and Chika would brush her hair, and then she put Janine’s hair over her forehead and she’d say, Mr. Mitch, we have the same hair, you know, and those kinds of things. And it was wonderful to watch and Chiaka taught me that. And probably the biggest one, Jean is, you know, as the disease debilitated her, she lost the ability to walk towards the end. The last three or four months of her life, I had to carry her wherever we went. And so, to the bathroom, to the kitchen, to the, the car everywhere I was her bus, you know, and we were sitting at the table one time and we were coloring. And I looked at my watch, I realized I was late for work and I pop up and I go, Chika I gotta go. And she said, no, Mr. Mitch stay and color. I said, Chika, I have to work. And she said, Mr. Mitch, I have to play. I said, I can’t, but this is not the same thing. This is my job. And she looked at me the same ways he looked at me all those years before, you know, crossed her arms and she said, no, it’s not, your job is carrying me. And it was so, it just hit me like a brick, you know, ’cause of course that’s how she looked at the world. But she was right. You know, my job was to carry here. My job was to carry her all the days of her life, our jobs, all of our jobs are to carry our children and particularly the poor and sick and forgotten children in the world. If you have the chance, like I’ve been blessed to have the chance, then it is your job. It’s a great job. It’s the best job ever.

Jean Chatzky: 17:54 You watching you talk about this and just hearing you talk about it as the best job ever. There’s a lot of research on what we can do with our money to make us happy. And most of it points to two things: experiences and doing things for other people.

Mitch Albom: 18:17 So true.

Jean Chatzky: 18:17 And what is very, very clear from reading your book and hearing you tell your story is you’ve found your thing, you found your thing where you felt like you could make a difference. And you know, obviously you have found many things. But I think for some of us it’s harder to find that thing. I mean, I’ve been involved in some organizations where I just feel like, oh my God, I am making a difference and I’ve been involved in others when I feel like ugh, I am in a meeting. How do you find your thing?

Mitch Albom: 18:52 That’s a really, really good question that you just asked and what you said about money. So true. Because I’ll give you a very recent example. Before this book came out, I made the decision that all the profits would go to the orphanage and our building there is 40 plus years old. It’s still not earthquake proof. No matter what we do, we painted every kind of bright color we can, but rats still get in and we back up to a sewage place. There’s no zoning in Haiti. So it just so happens that the people on the other side of the wall of us, they clean latrines. That’s what they do. And they empty them out there. And I’m always worried about that, about what’s going to get in to the kids and the smoke from our generator, like makes the whole wall black. But you have to have a generator because there’s no electricity at night and there’s all these things, so I said, we need to get another place. I’ve been there 10 years and I said, I want to use all the money, whatever money is earned from this book towards this. And then I’ll put my own money into it. And we started to look around at places and if there could be another place for us to go and we think we might have found a place and it’s expensive, you know, relatively. And I said to my wife, you know, we’ve bought three houses in our life and every time we were about to buy the house, the night before I went into a panic. I don’t know if this is the right house. I don’t know if this is the right thing. This is a lot of money. Maybe we shouldn’t be doing this, this isn’t… I said, you know what? I haven’t had a second hesitation about getting another place or building a brand new place. It’s going to cost a lot of money. And I haven’t hesitated about it once. It’s the most sure thing I’ve ever thought about. That tells you something, right? And she agreed and we said, this is going to be our third act, these kids and taking care of these kids. It’s going to be our third act. And you are absolutely right. You don’t even think about the money. So what better use for the money, especially when you get a little older and you start realizing what, what else do I need? What do I need to buy? So to answer the second part of your question, how do you find the thing, you’ve got to put yourself out there? That’s what I’ve learned in life. Tuesdays with Morrie. I saw Morrie on TV.

Jean Chatzky: 21:03 Yeah.

New Speaker: 21:03 He’d been my professor, beloved professor 16 years earlier. I’d lost touch with them. I’d been a real jerk about it. I hadn’t called him. I hadn’t anything. It’d be very easy to just say, well, I blew that one and I wouldn’t be sitting here with you, I guarantee you that. I made a phone call to him. It would’ve been very easy to just say, well that was enough. That was a phone call, but he said, will you come see me? And I could have said, you know, I’ll try. I’m busy… But I went, I pushed my self. I didn’t even really want to very first time, but I kind of pushed myself there. And as a result of going there and going there again, again, things started to happen. Same thing with Haiti. I’d never really heard of Haiti. I told you the story, you know, but I should go, I should go see this. And it wasn’t comfortable. I didn’t really want to. The day we left, I was thinking, oh, this is going to be rough. But you put yourself out there and once you’re out there, then things will make themselves apparent to you. They’ll reveal themselves to you, how you can help. But one thing I’ve learned is if you sit in your room, nobody’s going to (knocking) hey, come and help us. You know, it doesn’t work like that. So I think that’s the answer is just put yourself out into situations where people need help and you’ll find what it is that you can do.

Jean Chatzky: 22:10 The other thing that I thought over and over again when I was reading this book is yes, it is absolutely a love letter to Chika and the people who are listening should keep in mind, I told you when we sat down that I had just finished it on the train this morning and my mascara was all over my face and I had to clean it up and you said happy tears and absolutely happy tears. I mean it is an uplifting story. It’s also a love letter to your wife. It is very clear that your relationship is one for the ages. And we talk a lot about relationships here as they relate to money. How have you guys made it work for two decades, three decades?

Mitch Albom: 22:55 Well, my wife when we met, I actually was already a pretty successful sports writer and I was on television and I was earning a pretty good living. And when we met, not only does she not know who I was or what I did, but when I told her that first night, she said, I said, well, I write about sports. And she said, can you, can you actually earn a living doing that or you like, do you have to do something else, too? So right from the get go there was none of the, she wasn’t interested in me for those types of things and I don’t think I would ever be interested in somebody who was. And then a lot of that stuff happened after we had gotten together, Tuesdays with Morrie and all that and all the books and the success that come with that afterwards and some movies and things. But you know when you’re with somebody who knew you before all that stuff you can’t pull any of the, your ego was always kept in check. And I just married the right person. You know, she’s never ever been interested in things. We never go shopping. The hardest challenge of our marriage is me trying to find something for her birthday because there is literally nothing that she wants. And Christmas usually begins with her saying, don’t buy me anything ’cause I don’t want anything. I have everything. But what she does want to do is she wants to be with the kids in Haiti. And, you know, that’s enough. And so, you know, Jean, it’s really easy to say things and I’m sure your listeners are like, well, sure, when you have money then you don’t need money and things like that. But, and of course you need money and look, I couldn’t be running this orphanage without it. I funded most of the orphanage myself. I mean, it’s open people. We welcome people to, to help us. But I think sometimes people look at it as like, well, he’s, he’s doing all right. He doesn’t need our help. And that’s all right. And you know, if I have to, I do. But I think what you pointed out earlier is true. You know, go out and buy a thing and see how long it makes you happy. Count the days until you start looking at it as, eh, you know, and then go out and spend some money on making somebody’s life better or helping a kid or whatever and see how long that makes you feel good. And years later you’re still getting the glow from it, you know? So that ought to tell you the longevity of, of your investment, you know, to put it in business terms.

Jean Chatzky: 25:12 We will leave it there. Mitch Albom. The book is Finding Chika, A Little Girl, An Earthquake And The Making Of A Family. Happy Thanksgiving.

Mitch Albom: 25:20 Happy Thanksgiving to you.

Jean Chatzky: 25:21 We’ll be right back. Before we move on to your mailbag, let me just remind everybody that HerMoney and conversations like these are proudly sponsored by Fidelity Investments. What if you could demand more from your money? What if you could make your savings work as hard as you do? And what if that helped you reach your goals faster? It all starts with a financial checkup and an understanding of what you own and what you owe. From there, we’ll work with you to evaluate your investment options and ways to grow your savings. Get started today at fidelity.com/demandmore. And Kathryn Tuggle from hermoney.com has joined me in the studio. My heart is full.

Kathryn Tuggle: 26:07 My heart is full. That was amazing.

Jean Chatzky: 26:09 He’s a really terrific guy. My experience with him besides reading some of the books has basically been watching the sports reporters, which makes or made frequent appearances in my house and he’s just, yeah. You know, I mean there are very few words, but I just have the feeling that we were in the presence of a lot of grace.

Kathryn Tuggle: 26:36 I couldn’t agree more. He is the classic example of practicing what you preach. The words that he writes are so from the heart.

Jean Chatzky: 26:45 Yeah. And I loved actually, and I don’t want to give away too much, but he gave away this part, so it’s okay. I loved how he wrote this book, how she was a presence next to him. You know, that she continued to spend time with him even after she had died and was the one prodding him to do the writing. I just got a very real picture of her.

Kathryn Tuggle: 27:12 Same, I started it. I haven’t finished it yet and I loved what he said about flipping the script and coming right out on the first page and saying that she had died.

Jean Chatzky: 27:22 Yeah.

Kathryn Tuggle: 27:22 Because I think that was my main question when I cracked it open and just knowing that upfront and then you can just go on the journey with him once you know that fact.

Jean Chatzky: 27:34 Exactly. The other thing that I pulled out of the book that I didn’t get to in the interview with him, he wrote a line about how when he was writing Tuesdays with Morrie, and he alluded to this, he was a really busy guy. He said he had five jobs, newspapers, TV, radio, books, freelance. He said, I never said no to anything for fear I wouldn’t be asked again. I so relate to that. I mean I just felt a little pathetic actually, but that’s a treadmill I want to get off.

Kathryn Tuggle: 28:06 So you relate to that now?

Jean Chatzky: 28:07 I relate to that my whole life. I mean I am so grateful for so many of the wonderful opportunities that have come my way, but I also think you do have to prioritize and maybe it’s just the fact that I had a big birthday recently. Not that big. It was only 55, but it wasn’t, I don’t want everybody thinking it was 60. Yeah. I want to get better at that. I want to get better and make some space for the things that I care more about. Which, you know, includes work, but it also includes friends and includes family and includes organizations and causes that I believe in and includes time to just think about all of that.

Kathryn Tuggle: 28:55 Right. But do you think that he was saying that taking all the opportunities was a mistake?

Jean Chatzky: 29:01 No. I think he was saying that that’s where he was at that point in his life. And I think he got where he is in part because he walked through all those doors and I feel that way, you know, doors open, you walk through them and sometimes there are amazing things on the other side, but then there are other doors that maybe you shouldn’t go through. I don’t know. Eliot, my husband, always says, even if you don’t want to say no, just give yourself a little bit of space between the question and the answer. Say, oh my gosh, that is such an amazing opportunity. Thank you so much for asking. I’m going to get back to you on that.

Kathryn Tuggle: 29:50 Yeah, you’ve done that before. I’ve heard you do that.

Jean Chatzky: 29:52 I try really hard and often I fail but I try.

Kathryn Tuggle: 29:56 It is admirable.

Jean Chatzky: 29:57 It is hard. It is hard. Anyway. We don’t do enough shows on charitable giving. We should do more.

Kathryn Tuggle: 30:02 Okay.

Jean Chatzky: 30:03 Yeah, absolutely.

Kathryn Tuggle: 30:04 That was funny.

Jean Chatzky: 30:05 Those were not marching orders to my producer. That was just, I just, you know, we should, we feel good today so we should do more.

Kathryn Tuggle: 30:11 Like you were saying, studies show that when you do good with your money it feels good. It comes back to you tenfold.

Jean Chatzky: 30:19 Exactly. We have questions from our listeners, which is great. If anybody wants to send us a question, add to our mailbag, just mailbag@hermoney.com and and we will pick it right up. What do we have?

Kathryn Tuggle: 30:33 Our first note comes to us from Christina. She writes, HI Jean. I’m 36 years old and I started my 401(k) about three years ago. I’ve saved almost $30,000 so far, but I’m also in about $25,000 worth of credit card debt, which has been following me around for over 10 years. I’d like some advice on what the best way is to pay off this debt. Should I cash out my 401(k)? Should I take out a personal loan? I have a decent salary, but with all my bills, I don’t have enough money to pay more than the minimum on my credit cards every month. Please help.

Jean Chatzky: 31:05 Hi Christina. Great question. So I definitely wouldn’t cash out your 401(k), but I might allow myself to pull back on the contributions and use that money to funnel into paying off your credit card debt. The way to do this is to try to put as much into your 401(k) as you need to to get the matching dollars ’cause that’s a really good return on your money and then take whatever is leftover and use that to pay off the credit card debt. You asked specifically about a personal loan. A personal loan, particularly with interest rates as low as they are right now, can be a really good way to consolidate credit card debt, except that you have to be really careful that you don’t then charge those credit cards right back up again. Around the time of the housing crisis, we had seen a lot of people drain the equity from their homes in order to pay off credit cards and then they charged the credit cards right back up again ‘.cause they figured there was more where that came from and there turned out not to be. A personal loan is unsecured so you don’t have to worry that your house is going to be on the line, but you don’t want to dig yourself into a hole that’s doubly deep. If this is something that you think you could handle, then by all means look into personal loans. We actually have a story on hermoney.com about how to choose a personal loan. So I would say go ahead and take a look at that and good luck with all of this.

Kathryn Tuggle: 32:36 That’s amazing. What about a 401(k) loan? I’ve heard people do those before.

Jean Chatzky: 32:41 A 401(k) loan can also be a way to go. I’d compare the interest rates on the 401(k) loan versus the personal loan. With a 401(k) loan, you are in a sense paying interest back to yourself. However you’re also robbing the money that you pull out of the 401(k) of time that it has to grow. So during the time that you have that loan out, if the market does do particularly well, you lose out on all of that growth. But it is, it’s not a terrible type of loan, it’s just you set yourself back a little bit on the way to your future and you’re not able to borrow as much as it sounds like she needs against that particular 401(k) ’cause her balance in her 401(k) is only about as high as her balance on those credit cards.

Kathryn Tuggle: 33:37 Great. Our next note is from Sarah in San Francisco. She writes, Hi Jean. I discovered HerMoney earlier this year and I’m so glad that I did. It’s quickly become my favorite podcast and I love learning from you and your guests each week.

Jean Chatzky: 33:50 Aw, thank you, Sarah.

Kathryn Tuggle: 33:52 I work for a tech company in San Francisco and we’re expected to go public within the next three to six months. At the time we go public, I’ll own a few hundred shares with more continuing to vest over the next few years. It’s hard to say exactly how much my shares will be worth, but I expect it to be a significant portion of my net worth, maybe even half. I’m lucky enough to be debt free and also have an emergency fund. So once I’ve cashed out, I plan to invest the majority of the proceeds into my retirement and wealth building funds. However, I could use some guidance on my selling strategy. Here are my questions. Employees are subject to a six month lockup period, so I can’t sell immediately. How do I decide when to sell? I know that it’s impossible to time the market, but do you have any guidance on selling immediately after the lockup ends versus down the road? She also asks if she needs a broker, how many shares she should sell versus keep and specifics on tax implications she should keep in mind.

Jean Chatzky: 34:45 Lots and lots of really, really good questions and this is one of those scenarios particularly because those shares are going to be worth such a big portion of your overall net worth where talking to a financial advisor who’s familiar with the company, familiar with the plan is going to be well worth your time. I will tell you that right after that six month lockup period, particularly if this is a very large company, the markets will be keeping tabs on when people are allowed, when employees are allowed to sell their shares and right around then, it’s not unusual to see some downward movement in the stock because so many more shares are coming on to the market. So if you can bide your time a little bit, you may want to bide your time a little bit, but you also don’t want to put yourself in a position of holding more shares than make sense from the perspective of the diversification of your portfolio. It sounds like you’re already very wise to this, but what we know is that when a huge portion of your net worth is tied up in the same single stock that controls your livelihood, that’s way too many eggs in one basket and so paring back over time is something that you are going to want to do, especially if you plan on staying with the company and continuing to vest. What I’m trying to say and I’m not saying it especially eloquently, is that you absolutely need a plan and taxes should be a part of that. When you hold onto shares for a year or more, then you qualify for longterm capital gains rates rather than short term capital gains rates and those are also advantageous. So get to a financial advisor, do it sooner rather than later and make sure that it’s somebody who is again familiar with this company. Good luck and congrats.

Kathryn Tuggle: 36:49 Fantastic. Our last note comes to us from Jennifer. She writes, as a 51 year old immigrant and single mother, I started working as an assistant professor at a small public university in the Midwest four years ago. My current salary is approximately $73,000. While my income taxes are high, as I am taxed at 43% due to my work visa, hopefully my permanent resident status will be approved within year and in tenure promotion will be granted in two years. Currently I have maxed out all my TIAA accounts, including 401(k), 403(b), and traditional IRA with a total amount of $70,000. I have zero debt, $220,000 of three high yield, 12-month CD accounts, and an additional $10,000 emergency fund. I’m living a frugal lifestyle with monthly expenses of $900 including rent. That’s amazing.

Jean Chatzky: 37:39 That’s amazing.

Kathryn Tuggle: 37:41 My question is, what else should I consider doing to boost my finances and retirement funds? Thanks very much for your advice.

Jean Chatzky: 37:48 So Jennifer, not only is the $900 amazing, the whole financial picture is pretty amazing. You started working four years ago and all in, it sounds like on that $73,000 you have amassed about $300,000. I mean, that’s, that is just, it’s just incredible. So kudos to you. You are doing everything right. The one thing that I would potentially look at changing in order to boost your retirement funds is the amount of money that you have in those CDs versus the amount of money that you have in the market. I’ve been watching CD rates for the past couple of years, actually, I’ve been watching CD rates for the past couple of decades, but when you talk about high yield, 12 months CDs, I can’t imagine that you are earning any more than a couple of percentage points and by leaving the money there, you’ve missed out on a year where the market has grown double digits and that’s a very, very big difference, which is not to say that you should take all of that money out of CDs and put it in the market, but you may want to consider taking some of that money out of CDs and putting it in the market maybe on a rolling basis so that you buy the market at all levels. You’re a young woman. At 51 years old, you could be looking at another 51 years. That is a long time for your money to grow and if you’re leaving it in a place where it’s earning you 2% you’re losing money after taxes and inflation, but good on you. I think a lot of people will listen to this question and are just going to be wondering how are you living on $900 a month including rent and if you want to give us that information in a followup letter, we will happily read it on the air.

Kathryn Tuggle: 39:43 Absolutely.

Jean Chatzky: 39:44 Thank you so much Kathryn for the questions.

Kathryn Tuggle: 39:47 Thanks!

Jean Chatzky: 39:47 And again, if you have questions for us, mailbag@hermoney.com. In today’s thrive, if you have broken out the bubbly in the last couple of weeks to celebrate the very strong Dow Jones industrial average run, first let me just say, I salute your investing enthusiasm. I get how good those gains can feel and I love it when smart investors see it pay off, but it’s time to slow your roll if you were thinking that those results are anywhere near typical, they are not. And Morgan Stanley, which recently issued a report on this says the traditional investor portfolio of 60% stocks and 40% bonds could see returns of just over 4% annually over the next 10 years. Now again, this is their projection. You will see other projections, but it’s important to ask the question, why? And the answer is we are living in the second longest bull market on record and now that valuations are near their historic highs, those high returns will be more and more difficult to come by. What does all of this mean for you as a longterm investor? As I was just saying to Jennifer, honestly, not much. Stay the course. Play the long game. Resist the temptation to check in on your balances, especially on days when the markets head down. History tells us you will come out on top even though there will be plenty of ups and downs along the way. Thank you so much for joining me today on HerMoney. A huge thank you to Mitch Albom for the great insight, the inspiration, the wisdom. If you like what you hear, I hope you’ll subscribe to our show at Apple Podcasts. Leave us a review. We love hearing what you think. We also want to thank our sponsor, Fidelity. Our music is provided by Track Tribe and our show comes to you through PRX. Tune in next week. We’ll also sit down with writer and comedian Jeff Kreisler is the co-author of Dollars and Cents: How We Misthink Money and How We Spend Smarter. Thanks so much for listening. We’ll talk soon.