YW 90 – How to Be a Financial Rich Bitch with Nicole Lapin

YW 90 – How to Be a Financial Rich Bitch with Nicole Lapin

Nicole Lapin has lend a very successful news anchor career and has appeared on several news channels such as CNN Live, Bloomberg, CNBC, and much, much more. She joins Jason today on Young Wealth to talk about her latest book, Rich Bitch. In the book, Nicole provides 12 incredibly easy steps for anyone to get control over their personal finances and make better financial decisions in their life. Nicole explains to Jason’s audience some of the important steps in the book that will help them succeed in securing a better financial future.

Key Takeaways:
1:30 – Nicole is currently on a book tour.
4:00 – The current financial advice is about starvation, depriving you of certain luxuries. Nicole argues to invest in yourself.
7:20 – Nicole has been called a bitch in a derogatory sense and she decided to own it.
9:20 – In Nicole’s book, she touches on housing, savings, and investing.
11:30 – Jason explains rent to value ratios and when it’s a good time to rent or purchase a home on leverage.
15:00 – Three to nine months of savings is what you should have before you start investing.
17:10 – Saving money is not just about math, your finances become more interesting when you link it towards your own personal goals too.

 

Tweetables:
“Financial diet is a lot like regular diet. You allow yourself small indulgences and you won’t binge later on.”

“The biggest culprit for getting folks off budgets is the cash expenditures that they have that are unaccounted for.”

“If one only has a small amount of money and they have their own business, invest in your business.”

 

Mentioned In This Episode:
Rich Bitch by Nicole Lapin

 

Transcript

Jason Hartman:
It’s my pleasure to welcome Nicole Lapin to the show. She is a former anchor on CNBC, MSNBC, NBC Today Show, Bloomberg, and CNN Live. She is the founder of nothing but gold productions. The creator of Cash Smartwatch and author of Rich Bitch: A Simple 12 Step Plan for Getting Your Financial Life Together…Finally! Nicole, welcome, how are you?

Nicole Lapin:
Jason! That was an awesome intro. Thank you so much for having me. I am so honored.

Jason:
Well, the pleasure is all ours. First of all, give our listeners a sense of geography, where are you located?

Nicole:
I am a citizen of the world these days. I am on an awesome book tour to promote Rich Bitch to all of those young people and young at heart who want a personal finance book that is a jargon free zone. So, right now I’m in Philadelphia, I was in New York going to LA, so you know how it goes with book tours we’re all over the place.

Jason:
But where do you actually live? If anywhere. Are you nomadic lately? Like the Tim Ferriss concept?

Nicole:
I’m a little bit of the female Tim Ferriss. I am in New York, I have a place in New York. I do the Wendy Williams Show right now. I’m here money correspondent out of Chelsea and I also have a show out of LA with AOL called I’ll Never Forget My First. We talk to women about the first time they knew they made it. So, I do quite a bit of traveling, but most of my time I’m on East Coast time in New York.

Jason:
It’s hard to give up a place in New York. I mean, the real estate there is such a bargain. You wouldn’t want to let that go. Major sarcasm intended. Tell us about how you came to write this, I mean, what are some of the things that are going on with people out there of, you know, they just sort of don’t pay attention to the whole money thing until; I kind of notice people really wake up when they get to be about 35 it seams like and they think, I gotta pay attention to this, it matters.

Nicole:
When I wanted to learn about money, I looked at a lot of books and not only were they boring, let’s be serious, Jason, but they were not relevant to me. So, I wanted to create something that was relatable for every stage of life, from your first job to apartment to managing your check book to merging bank accounts with your future spouse or planning for retirement. I think every story goes back to money, I can tell you that being a news anchor for over a decade. So, Rich Bitch turns deprivation into aspiration. It’s not a budget. It’s a spending plan. It’s about changing your mindset and then your finances will follow.

Jason:
So, how does your mindset need to change? Take us from the typical mindset to the new mindset, if you would.

Nicole:
So, the typical mindset is one of starvation. Financial diet is a lot like regular diet, you know this, you allow yourself small indulgences you won’t binge later on. So, start thinking of yourself as someone who has billable houses. I make the case for the morning latte. If you buy your morning latte, many financial experts will tell you not to do that, then you might get to work earlier, you might have a pep in your step, you might get raise that will trump that $1,500 to $2,500 depending on what kind of latte you’re getting at the end of the year.

So, start investing in yourself. I think that pays most dividends later on. Rich Bitch is really the stuff that no one tells you about money from negotiating bills to finding extra money in your social money to making extra money, because if you make more money, hello Captain Obvious, you don’t have to save as much money.

Jason:
Yeah, that’s good. No body ever got rich saving money, you gotta focus on the income side, for sure, but without savings, without capital formation, you can’t get into the investment game and the investor class is really where the money is made for so many people. So, it’s a blend, it’s a balance, definitely. Talk to us for a moment just about the biggest demographic cohort in American history and that is generation Y, the millennial generation, I guess the oldest of the millennials are about 35 now maybe, depends who you ask. This is larger than the baby boomers by a small margin. What is their style and what do they need to pay attention to in particular?

Nicole:
Well you know Jason, I was reporting on the forefront of the greatest financial crisis of our time and I can tell you that there is a new normal, this is cohort you talk about. It’s not the quintessential American dream anymore. I think it’s your dream and it’s your destiny. For ladies out there you don’t need a man. For everybody, you don’t need the right the schooling or to be born with a silver spoon in your mouth in order to be what I call a rich bitch, which is by the way a good thing. It is someone who is empowered to live the life that he or she wants and people ask me all the time, why the word bitch? Well, it’s an unconventional book. The world has changed and conventional wisdom no longer applies. So, for me it was really important to re-think financial wisdom and help folks think for themselves.

Jason:
But expand on the word bitch a little bit, if you would. I don’t know if I caught that because re-thinking financial, did you want to just make it more casual with it or what?

Nicole:
Well, I think the language has made the topic really intimidating for the longest time, so in order to make it entertaining and accessible, we have to change the language that it’s used in. I used to break out into hives looking at the Wall Street Journal. Growing up, I grew up in an immigrant household as a first generation American. There was never a Wall Street Journal on the kitchen counter, there was only cash, which sounds really awesome, but like a lot of first generation Americas that’s what my family knew. So, the whole language of money really stumped me, so I’m the least likely suspect to be a financial expert. I was clueless.

My former self was really clueless until I was thrown on the floor of the Chicago murk when I was 18 and I needed to learn this language very quickly and not only that, I needed to speak it to the world. What I realized is that money is just a language like anything else, but frankly there was no Rosetta stone, so I couldn’t blame myself if I didn’t learn this stuff in school. So when I spoke the language, at first it sounded like Chinese, like any foreign language that you would be speaking, but then when I could speak it I realized, you know what? It isn’t that serious.

So, I wanted to be the Rosetta stone so to speak for my former self, but the word bitch, you know, I’ve been called a bitch in a derogatory sense. I was 21 when I started CNN and, like I said, I wasn’t born with a silver spoon in my mouth. I didn’t have any connections. I sort of made my own name in this world being a daughter of an immigrant family and so being called a bitch in a derogatory sense I thought there was nothing wrong with being strong and confident and being a woman who had no debt and was on top of her career and if that meant that I was a bitch, then I am a bitch and I’m owning it.

So, I created a video similar to the Ban Bossy video where a lot of kick ass, awesome women, power women, CEOs are taking back this world and using it as a badge of owner like a lot of derogatory words have been flipped on its head and used as a term of empowerment. So, rich bitch has attitude and confidence. It’s real language and it makes personal financial aspirational and it puts the personal in personal finances.

Jason:
So, the Cash Smartwatch, what does that do?

Nicole:
This is something that I created with HSN that was the first ever smartwatch that calculated your money while you were on the go. So, the biggest culprit for getting folks off budgets is the cash expenditures that they have that are unaccounted for. So, your subway fare if you’re in New York, the latte that you might spend on in cash, the baby sitter, the dog walker, whatever. That’s the stuff that normally gets you off budget and there is no fun way to calculate that while you were on the go, so that’s why I created the Cash Smartwatch.

Jason:
Great, yeah, I assume that will turn into a, that’ll morph into an app for the Apple watch properly, right?

Nicole:
Yeah, here’s hoping.

Jason:
Good idea. Good idea. So, tell us about some of the actual principles that you discuss in the book. Put a roof on it, just some of these like chapter heads, pick whatever you want, any of the actual principles that we can learn from.

Nicole:
Yeah, so for me, it was important to create a 12 step program borrowing from other 12 step programs, rehab programs. The first step is of course admitting that you have a problem and, Jason, you might have seen me on TV for many years and think I was perfect, but that could not be farther from the truth. I have issues like everyone else and it was really important to me to tell my stories openly and honestly to hopefully help others learn from me, laugh at me in some cases, be inspired by my stories, but to tell them once and all.

So, I go through the 12 steps and I touch on all aspects that you talked about from housing to savings to investing, which as you mentioned before is the only way to really grow your wealth and at the end of every chapter a look at conventional financial wisdom and in some cases I debunk it. I argue for the morning latte, as I mentioned, because becoming a rich bitch is not about deprivation. You can buy your morning latte and reach your money goes. So, you’ll hear from a lot of financial experts, “Don’t buy a latte, buy a house.” I sort of say, well, there’s no one size fits all for everybody in any aspect of money. There is no gospel. So, you can buy a latte and rent a house.

Jason:
And sometimes it’s better to rent a house, it’s a better deal. If you live in New York City, you’re must better off being a renter than an owner, probably.

Nicole:
That’s right, because you just count for the idea of inflation. A home is not a great investment.

Jason:
No, it’s not. It’s a myth, but income property is a great investment. So, that’s the distinction there, but yeah, go ahead.

Nicole:
Oh no, I just think it’s an important for people to realize that there’s a really bugger called inflation, so the largest study over time over a 100 years had shown that home ownership didn’t even keep pace with inflation. When you hear the idea of your grandparents buying a home, you know, 70 years ago for $50,000 and now it’s worth $300,000, you think it’s an amazing deal except for the fact that when we were kids movie tickets cost a few books and now they’re 15 dollars. So, you just count for the idea of inflation. So, home ownership is home ownership and if you’re living there for a long time it can be right for you, but it’s not the end-all be-all and certainly not right for everybody.

Jason:
It’s not the end-all be-all in expensive places, you know, in expensive markets it’s cheaper to rent than own, because what we do is we take something called the RV ratio, the rent to value ratio, and investors can pretty realistically can earn 1% of the value per month in rental income on their properties, but if it’s a million dollar property, you can’ rent that property for like $4,000 in most markets. It’s better to rent that property and invest in 10 single family homes that you can rent for $1,500 per month and have $10,000 a month income. Buying a house blindly is not a good deal necessarily, it really depends.

To your argument, that sounds like kind of some of the Robert Shiller stuff, which is interesting, but you are right about the consumer price index in home prices, however, no body buys their house with cash usually and when you leverage it, you actually do beat inflation by 5 to 1 or a 10 to 1 ratio depending on how much leverage you have. So, if you’re paying cash, yeah, you’re going to keep pace. It’s only a commodity that just raises in value with inflation. Totally agree.

Nicole:
You’re also missing out on your purchasing power and your opportunity cost. I think when you’re tying up a lot of that capital whether you’re getting a mortgage or you are paying in cash.

Jason:
Don’t pay cash though.

Nicole:
Yeah, that’s a whole other podcast. I think it’s important for folks to realize too that they are tying up that capital and they could be investing in themselves, which I think sometimes pays most dividends in the end.

Jason:
Certainly, if one only has a small amount of money and they have their own business, invest in your business, the thing you know and understand and stop sending it to Wall Street. I mean, why are you investing it in other people’s business when you have your own that you understand and have control of, you know?

Nicole:
Absolutely. Entrepreneurialism is a huge winner of this recession. I saw a huge trend just reporting through this greatest disaster of our time and we’ll see women who are starting cupcake shops or folks who always wanted to go be an Alpaca farmer in South America or whatever that dream is, I think, you know, the idea that there’s a new normal is super pervasive, so home equity isn’t what it used to be, as we just said. Furloughs and layoffs and there’s no pensions and so I think, you know, the idea fun in employment has definitely been on the raise.

Jason:
No question about it definitely. Just to, I don’t want to harp on this real estate thing. You know, with the income property, you don’t pay your debts. You outsource those to the tenant and then you get the advantage of inflation destroying the value of the debt, which is a huge wealth creator. The home ownership thing of living in the house you own is just silly. It’s an outmoded idea largely. Sometimes it’s good, but not always certainly.

Nicole:
By the way, you have to look in the mirror and you say, hey, guess who’s the landlord and that’ me and if there’s termites and snowplowing or something.

Jason:
All of those responsibilities are yours. Yeah. Okay, pick another step or two of those 12 that you want to talk about.

Nicole:
Wow, I think. Wealth creation is just touched on. I’m happy to talk about any of them. I think once you’ve established your savings nest egg of three to six months, I should say. I shouldn’t say nest egg, but I should say, opps, I don’t know how much swearing I can do on this podcast, but in the book I..

Jason:
You can say the world bitch.

Nicole:
Oh, you know what, crap, fun, of just you know, if you lose your job, if you got sick, if your family member gets sick and you can’t work, so three to six months of savings is important to have before you start investing or if you have precarious job six to nine months is better whether you’re real estate, going back to real estate again, real estate agent or an actress or somebody with a less steady pay check and then moving on to growing your wealth. So, back to inflation, again, of course inflation is going up 3% if you keep it and say, hey Jason and Nicole, I’m doing so good. I’m putting my money in a savings account. Well, that’s not great because you’re making diddly squat in interest.

Jason:
You’re losing money after taxes and inflation, yeah.

Nicole:
That’s right. So, we’re not suggesting robbers coming to your house and stealing your money, but your purchasing power will be much less later on unless you start investing.

Jason:
Absolutely. Okay, good, good. Just any other advice or any of the other steps that you want to share?

Nicole:
Well, I think going back to shifting your mindset. It’s really important in getting your financial life together to change your mindset and start thinking for example about retirement as paying for your future self. So, there are all these books, you’ve seen them, Think Think To Be Thin and that’s kind of load of hoo-wee when it comes to your diet. I’m no diet expert, but when you’re just thinking about thin and not hitting the gym and eating a bunch of junk, then you’re not going to be then, but when it comes to your money, I think switching your mindset into starting to feel like you’re paying for your future self instead of feeling like, ugh, I have a bill for retirement every single month and the dread that that goes along with and the fee, I think it’s really important to start shifting that toward a more positive mindset.

Jason:
Yeah, definitely. Instead of having it be this obligation, in other words, I’m assuming your theory behind that is that if we think of it that way, we’re not going to do it, right. We’re not going to be able to talk ourselves into actually following through.

Nicole:
Yeah, I think there’s a fear of money, you know, personal finance becomes very interesting when you understand how it directly relates to your life goals. It’s not over your head that way. It’s not just about math, it’s not just about numbers or jargon. It becomes most interesting when you understand directly how it links to your life goals in all aspects of your life whether it’s your career or your family or your personal fun life. I call them the three Fs: Family, Finance, and Fun, then it’s not over your head and goals have price tags and we just figure out how to get the money for living the life you want.

Jason:
Good advice, good advice. Where can they get the book?

Nicole:
You can find it at all major book stores. I’ve been running around signing stock at a Barnes & Noble across the country and on Amazon, of course. We’re number one in new releases and you can find it at NicoleLapin.com. I would love to continue the conversation with you and with anybody listening on social media @NicoleLapin is my handle on Twitter and my Facebook page.

Jason:
Nicole, what’s next for you?

Nicole:
Oh my goodness, hopefully creating a book that resonates with people who are scared to talk about money. That’s my main goal, to make people love this.

Jason:
Excellent. Nicole Lapin, thank you so much for joining us today.

Nicole:
Thank you so much for having me, Jason. I appreciate your time.

Announcer:
This show is produced by the Hartman Media Company, all rights reserved. For distribution or publication rights and media interviews, please visit www.hartmanmedia.com or email [email protected] Nothing on this show should be considered specific personal or professional advice. Please consult an appropriate tax, legal, real estate or business professional for individualized advice. Opinions of guests are their own and the host is acting on behalf of Platinum Properties Investor Network Inc. exclusively.