From 36 Cents To 32 Cents: The Growing Gender Wealth Gap No One Talks About | Kristine Beese, Founder and CEO of Untangle Money

Untangle Money. Podcast === Kristine : the head of the largest investment company on the planet said that the retirement crisis is a women's crisis Monica: Research shows that women earn half a million less than men over their careers that is a lot! Kristine : For every dollar that men have in net wealth, women have just 36 cents they remeasure that number in 2020 for every dollar men had in net wealth, women had just 32 cents women are fabulous with money we save more on a percentage basis of our income than our male counterparts we also get better investment returns We don't start early enough 'cause we need time, time is the biggest advantage when it comes to money when you zoom out over a lifetime and you realize that you come up 15, 10 years short of having enough money for that whole lifetime those last 5, 10 years that you don't have enough money that is risky if we find ourselves alive at 65, more than half of us are still gonna be alive at 90 and if your bank killed you at 90 in your financial plan, that means more than half of us that are still alive at 90 will have run out of money do you know how much money you need at 65 so that you can retire?

Monica: Hi Kristine, it is a pleasure having you in the show. I'm super looking forward to our chat. Kristine : Hi Monica. Thanks for having me.

I'm also looking forward to it. Monica: It's a topic that I'm passionate about, you're passionate about, and so many women out there are passionate about. So we'll be talking about women and the wealth, and there's a lot of stats that show us that basically the wealth gap is getting bigger, which is a little bit worrying. So I'll just go straight into it.

When we first met, you said, Hey, we've got a, we've got a crisis basically, and the retirement crisis is a women's crisis, so how can we get. How can we close this wealth gap if financial services and traditional, like wealth management planning is not really designed for women and our specific needs. Yeah, it's a great Kristine : question. And I think, or one of the things that frustrates me so much about this gap is it is it's talked about in small circles, but in the big financial institutions that have the power and.

Ability to make changes. It is silent. So I came up through the traditional financial education system. I have an MBA in finance.

I worked on the trading floor on the, I was a stock analyst. I did a lot of traditional financial education. It was only when I was trying to figure out how to describe our focus on women to investors that I was looking for data to support my hypothesis that women experience money differently. It was only then that I really learned about this gap, these gaps and how they occur and why they're so important and what the unintended consequences of that are, and just how challenging it can be.

So I think it's really tricky when silence is what you're faced with and there are just no options out there for you to. Mitigate some of these issues. So one, it's hard to learn about the issues. And then two, there's no, no help once you do learn about them.

I do wanna point out that the head of the largest investment company on the planet said that Retire the retirement crisis is a women's crisis. So Ann accurately, she's the head of retirement for BlackRock. So you do have some people with these massive platforms ringing the alarm. The big banks largely silent on this issue.

Yes. Monica: Which is worrying. That's why we are having this conversation. And it's not just, you use the word alarming.

I don't want to use the word alarming without putting some numbers behind it. Can you share with us some stats, some numbers that show why this is so alarming? Kristine : Yeah, and it was, these stats I'm gonna share are from a book called shortchanged by me Chang, who was a Harvard professor, and she wrote this book in 2010, and she said, for every dollar that men have in net wealth, women have just 36 cents. They remeasure that number in 2020.

For every dollar men had in net wealth, women had just 32 cents. So we lost more than 10% of our relative wealth in a decade. And so you might hear stats where this is closer to six 50 or 60 cents on the dollar. That is if you include a car as an asset.

Now, because cars tend to lose value over time, they're called a depreciating asset. Typically, we don't include them in those types of net wealth conversations. But that, that, that's the difference when you hear something that's closer to half versus a third, and either way, that is a shocking differential and the growth is also shocking. Monica: Yeah.

So if I were to summarize what JU just said, it's hey. 10 years ago, the wealth gap was for every dollar that a man earns, basically a woman earns 32 cents less. No, Kristine : it's Monica: not earned. Kristine : It's when you look at what you own, minus what you owe.

So it's how much wealth you have. So it's not earning well. It's earning. It's not earning.

Yeah. So it's not. How, so we do earn less. We're close.

It depends on the stat. We're around 87, 89, 85. Again, it depends on where you look, what country, and who wrote the stats. But we do definitely earn less money in the, in like for like jobs.

So in the same jobs, we're still earning less money. But when we look at how much wealth we have, how much we have in savings, how much we have in retirement, how much we could spend on new investments, how much we can donate to the community, how much we can. Spend lobbying the government for reforms we're looking for. We have one third of the power and ability to do that.

Then men, and that gap is growing. So for every man, you could think of it as they have four votes and we have one or three, three votes, and we have one. So for every man, you could think of it that they have $3 to vote with, and we women have $1 to vote with. Monica: Three, basically, I love your analogy that it's hey, three votes versus one vote.

Kristine : Yes. Yes. What can you do with that? It's a lot harder if you have one boat to catch a lot of fish than if you have three.

And so when you look at what initiatives are getting funded, what research is being done what progress we wanna see, we don't have as many boats to catch the fish. Monica: So me, I want to go deeper a little bit on that. So basically, if I summarize it correctly this time, it's not easy, right? It's not always Kristine : easy.

Monica: Yeah, because it's like we, because I think you raised a good point because it's usually we talk about the gender gap, right? That it's the pay gap. Yeah. That it's roughly on the, anything between 20 or 28 or 30 something percent.

Not percent sense, not sense, but yeah. Kristine : Less, right? That'd be, yeah. Monica: But no, this is not about pay gap.

This is about wealth gap. Yeah. It's like for every dollar of wealth that a man has accumulated, a woman only has 32. Yes.

That on its own is shocking. Yeah. And probably it's if I could have understood that properly, I could have started the podcast with, Hey, for every dollar that they have, we have 36. That is just like shocking.

Yeah. But what's even worse, it's hey, 10 years ago. That number was 36. Yeah.

But now that we are like modern and there's so much progress going on this, the other, actually we've got a little bit backwards and now it's 32 cents, not 36. Yeah. So my question is like, why, what is driving this inequality? What's making the gap go bigger?

Kristine : Yeah. So I do wanna say. Two things that women are great at because I sometimes think when we look at what all these negative things, we lose sight of what we're great at, women are great with money. It has nothing to do with our ability to money.

Women are fabulous with money. We save more on a percentage basis of our income than our male counterparts. And I'm not trying to disparage men. I'm just, I'm, I wanna show that what we're really good at, so we save more of our money than our male counterparts on average, and we also get better investment returns when we.

For a specific, for the, that type of risk. So if we are doing a low risk portfolio, women will earn more from their financial bouquet than the this a man in a low risk portfolio. If we have a high risk portfolio, a woman will earn more from that bouquet than a man with a similar high risk portfolio. That's not to say a woman with a low risk portfolio will outperform a man with a high risk portfolio that is not apples to apples and that's not how it works.

But, so women are great at investing and women are great at savings. Okay, so then what are we missing? We don't start early enough 'cause we need time time is the biggest advantage when it comes to money you and it takes so long to get it going and then it just ramps up. It's really fabulous.

If you haven't seen a graph that does this come to untangle money, we'll show you how to do it. But it's fascinating. And. We need time.

We need to put more cash to work. We sit on it and we need to get our money working harder for us. We need to be comfortable with that. So what is driving this gap is some of those things that we're not doing, but it's also that 87 cents on the dollar that we're earning.

So we're not bringing in as much money in the first place. Then we have more student debt. We get higher debt rates. Even when we have the same amount of debt, we're quoted higher rates because we're women.

And so even though we're better at paying off the debt, we still pay higher rates and then we tend to have more student debt than men. Then when we spend money on goods and services, there's the pink tax, so we pay more to live in the world. So you have a smaller starting point. You're paying more on your debt and you have more debt.

You're paying more for goods and services. I would argue you probably have more goods and services that you need. I've never seen data to support that. So we can leave that part out.

But then, so that just doesn't leave as much left over. As if you earned more and didn't and it didn't cost as much. And so you have less that you can put away in the first place. And then if you're not getting that money working, if you're not getting that engine running fast for you and you're not putting more engines at work to work, then we're just gonna continue to fall behind.

So we really, I really want to see women getting comfortable with the foundational aspects of money so that they can put more of their money to work, they can buy more engines, and they're putting those engines up high because they have a long way to go and they're not going slowly and not getting as far. So that's, that is what's driving some of this gap. And, we're seeing we're gonna have this great wealth transfer to women that I don't know what that's gonna do, the gap. But I hope when we have more money in the.

Hands of women that we make choices that help us continue to catch up and close that. Monica: Awesome. I'm going to deviate a little bit. As you were speaking.

I was like one, I was like, oh my God, Kristine is so inspirational. And then two, I was like, this is what really purpose-driven FinTech is. Yeah. Yeah.

This is like purpose-driven FinTech. I'm like, Kristine, she gets the award. That's it. Thank you.

That it is so cool what you're doing. Kristine : Thank you. We. We didn't want this to be theoretical, and we didn't want to learn all these things and then throw our hands up in the air and say, oh that's okay.

What We can't, it's too big a problem to change. It's too, it impact, there's too many facets. We wanted to take as much of what we learned and as many of the things that we felt we could influence and impact with the design of the Untangled Mini and see change while. Teaching women about money while showing them the foundations.

It informed what we highlighted. It informed how we structured, what time horizon we're focusing on. It's all well and good to manage risk on a short term and not take a lot of it. That's perfect, right?

That is great risk management. But when you zoom out over a lifetime and you realize that you come up 15, 10 years short of having enough money for that whole lifetime, those last 5 10 years that you have, don't have enough money. That is risky. And so when you tell, and no one needs to take more risk, we show you other trade-offs you can make because not everybody, some people come to us and we say, look, if you take more risks, this happens.

And some people say, that's great. I hear what you're telling me, not for me. That's perfect. There are trade-offs, other things you can do.

But we wanted to at least have that conversation because what the research shows is that women, when women are aware of what risks they're taking, sometimes counterintuitively by not getting their money to work hard enough, and that leaves them short, then they act more like a portfolio manager, more like someone who manages a pension and they take more risk in the beginning, right? So if you're far enough away from when you need the money. A pension manager is gonna put you in, your financial bouquet is gonna be 93% stock flowers.

So you have this bouquet where nine, almost nine and a half of the flowers in your bouquet out of 10 are gonna be in ownership. In companies, that seems really risky, but when you're managing something that needs to, that has to last until 90, and the person's between 20 and 20, 20, 25, anything before 45, and they retire at 65, 90 3% of that money, the professional's gonna put in the, in that bouquet in stocks. And so it isn't risky when you understand the whole picture versus when you're just focusing on the next five years, right?

So it depends on when you need the money, what you're using the money for, and we wanted to make sure that we're teaching those things to the women in a way that doesn't feel overwhelming. Monica: I want to go back to the problem statement. Yeah. Because we need, it's it is a very complex topic.

Yeah. So within the problem statement one, one of the things that you mentioned, and we know is women earn less than men. Yes. And then if we focus just on the US and Canada, because the rest of the world will be different earning power, let's say, but.

Within US and Canada, research shows that women earn half a million less than men over their careers. That is a lot. What? It's a lot.

What, yeah, what are the Kristine : implications of that? Yeah, so it's somewhere between half a million and a million. It depends on how you s spice up that pie. When you look at women who have women and men who have post-secondary education, it's closer to a million when you look at overall.

Sometimes when we look at the pay gap, we say it's only 13%, right? 87 cents on the dollar. That doesn't, it doesn't sound bad. It's like you're still getting an a 87%, right?

You're still, that sounds like a horrible number if you're the woman. But it doesn't sound ter like it doesn't, to anybody who says, it doesn't sound bad, often men tell me this. I'm like, okay, I'll switch a math. But that number hides so much.

And so what happens is that's on for like jobs now, women who go into women dominant industries, that industry pays less overall. Women then have only, we talked about the pink tax and those things, that has an impact. But women's careers plateau around 40. Yeah.

And so they're, they don't earn any more income is what the research shows. It's we see this flattening, and this is, the McKinsey report that talks about the missing middle rung, that inability to get into that management role. We tend to dominate the lower paying, lower power positions within an organization. We get stuck at the middle, right?

We never, we don't in great numbers or don't in parity, make it to the top levels of an organization. This could be for all sorts of reasons. It could be care, work responsibilities at home. That means that we can't put our best foot forward.

It could be that our partners are the ones that economically in a unit of two are making more money. So we are taking a step back to support. It could mean lots of things, but, so it's not just this 87 cents on the dollar. That's why I like highlighting this half a million, million dollars.

I don't like the number, but I like, it's not just that 13%, it's this. It's this plateau that happens at 40 and it's this 10,000 to $25,000 more that men earn after 40 year, after year for over 25 years that they have more money coming in. This means that we can't start a retirement at 40 because we don't have an earnings increase that we can start funneling off into retirement. It means that we can't catch up in our forties because we don't have this hump that's coming our way.

We are managing with what we have. It means that, we are mitigating at that point. And it means that our retirements are less funded. It also means that we're paying less into pension plans, both at the government and at the corporate level, because pension plans are a percentage of your earnings.

So if you're earning 87 cents on the dollar, the same work, but you're not able to get into the higher roles, so you're stuck at the glass ceiling. You're never putting enough money away in Canada into CPP in pensions that are at your corporate sponsored. So you're not getting those high income, I think a lot of corporate pensions are based on your last five years or top five years. Our top five years are in our forties, not in our fifties.

And so you're, we're, we get less in pension. We have less in, in our savings pot at the end, our investment pot at the end, and then we live longer. And so this gap in pay sets up so much more on fairness in our retire. And so that means we either have to work longer, we have to work part-time in retirement, we have to downsize.

A lot of times this is hidden because we live on relatives, couches or spare rooms, and that's something we all hear about the mother or mother-in-law who moves in and into a, into the in-law suite, right? So there are mitigations, but these aren't necessarily always choices if it is a choice, brilliant, right? I think multi-generational living is the strongest economic way to navigate through life. I think this idea that we're supposed to in earn wealth alone and dec accumulate wealth alone is, it's stupid, right?

So multi-generational homes and cultures, that is a, that is an incredibly strong strategy. But if it's not culturally normative to you, or if you don't live close to your children or your niece or whoever's gonna take you in, or if you don't have people that are gonna take you in, it leaves you really vulnerable and you just don't own your path forward. You can make the best of it, but it may not be the one you chose for yourself. So that's the implication.

I'm like, Monica: oh my God. Yeah. There's many, I guess two, two things that come to my mind is one with the longer, but two, it's like the. We stopped having control over our destiny if I may use that word.

And that's sad. Yeah. I was like, oh yeah. Yeah.

It's a big problem. But exactly. We need to explore the problem further. So it seems like there's some sort of longevity paradox here that it's we live longer, we earn less, we have this money.

What's your thoughts about that? Kristine : I actually think living longer is a superpower because in portfolio management or as a professional investor, whenever you have more than 20 years, that's a gift because that means you can take a lot of risk. That means you can get that engine driving for you. And so women can actually use time to their advantage by ensuring that they have an engine.

For longer. So what I mean by that is if you have more than 20 years until you need the money, you can leave it in a high risk bouquet and then you can just transfer the money you need in 10 years time, you'll transfer that into a lower risk bouquet. And then as it comes closer into a close to no risk bouquet, there's no such thing, but you just, it's like a waterfall, but you can leave the money in this high risk portfolio for longer, meaning that you have this engine that enables you to build wealth while you're not doing anything right.

It's just gonna be sitting in there in the background, making money for you that's gonna protect you in 20 years time. And because we have more time, we can do that for longer. The downside is we don't have as much money to do that with. So sometimes we, that, that strategy isn't great for us, but if we.

Can teach young women to start early. And this doesn't have to look perfect. It has to be. But we have to build that habit.

If we can get them to start early, if we can sit on less cash and if we can get our money working harder for us in the beginning, we actually can, we can actually overcome the pay gap and the earning. Like you can do enough in the beginning so that it doesn't matter what you earn. 'cause that money, that's that weird curvature, you can actually get it so that you can overcome the la the lower salary through life. And so I just want that to be our superpower, right?

If we can share this, and it's so difficult 'cause money is so hard to talk about, especially for women. But if we could get over that and if we could get these foundational confidences then we can change our destinies by. By not abdicating it to fear and anxiety and lack of confidence and a system that is not there to help us. It's there to help wealthy people.

And so it's not built to help everyday folks, but if we can overcome that, then we can take charge of our own destinies and none of that matters, right? It doesn't matter that we earn less. It doesn't matter that we don't, it matters in other aspects, but it won't matter for our safety and security and ability to look after ourselves in the future. So we can, if we are able to even work a little longer, we can use this strategy in our favor.

If we can even work a little bit part-time, we can use this in our favor because we don't need to earn much to keep that engine of growth going so that we don't have to turn the engine off and use that money, if that makes sense. Monica: Yeah. And what I'm thinking is. It's exactly.

I think I've said this three times already. It is a complex problem. It is a complex problem, but it seems that it's not like any complex problem. It's not one dimensional.

It's super multi-dimensional. And as, as you explain, not the investment part, but like the implications to women's life to women's lives I can, the word that comes to me, it's like financial stress. Yeah. There is an element of financial stress on its own.

It's within the top sources of stress in people's lives in general across the world. That's a fact. How does these financial stress, what's the right word? Not re how is it present in women's lives, given all these circumstances?

Yeah, so Kristine : when we, I think it's, I think you're right. Financial stress is hard for everyone. Money is everywhere and it dictates so much of what we can and can't do or how much debt, and we can't sleep. And, that is, it is stressful.

It is. Research shows it is more stressful for women. I think that's because they have less of it and they need to make it last longer. So when you have a limited resource, you have to be more careful with how you allocate it.

That's very clever. But it's also much more stressful that we can't spend it as readily as men because we know we don't have as much of it. I think adding to that is that whenever women spend on women's. I'll use manicures as an example.

It's seen societally as frivolous, but when a man buys a bottle of single malt scotch that is seen society societally as discernment, ignore the fact that alcohol is not the best thing for us. And there's nothing wrong with alcohol. I don't wanna make any virtual. But, so having more attractiveness and grooming has been shown to increase women's salary.

So you could say the nails is a little bit, slightly more of an investment, whereas the wall of scotch, I guess it could be water cooler or, there can be other social status things, but it's, anyways, doesn't matter. But when you think of women, everything we spend money on, we do wrong. We spend too much money on our kids. We spend not enough money on our kids.

It's just stressful. So when I talk to people who don't understand that money is stressful I say that. For women, it is as difficult to talk about money as it is for men to talk about erectile dysfunction. You do not see a group of men sitting around in a group discussing their inability to have an erection.

It does not happen. It, and it should. It's no big deal. It happens, right?

And we have a beautiful blue pill that helps and no big deal. Life moves on. But it is a big deal when you can't get a bunch of women in a room to talk about money because we can't share the important lessons. We can't share the things that we want each other to know so that we can break some of these inability to retire, lack of power with our money, getting our money working for us so that we have more agency.

It is a problem when money is so emotional, and I think when you combine how much harder it is for us to get, how much judgment we get whenever we use money. No wonder it's so much more stressful for women. Plus there's all these things we're told we're supposed to do with it, but we don't have the capacity to do that because you on men, it's hard for men too. And I really wanna emphasize that it is hard for everyone.

This isn't, I don't, it's just harder when you have less resources and a system that tells you things that actually are wrong for you. And so I think women feel that. I think women feel that. The finance services that they are exposed to have not been designed with their thoughts and needs in mind.

So I'll give you just one example that we actually incorporated into the untangled. Mini men really seem to like details, numbers, backup data, blah, blah, blah. And you see this in cars, right? You see they have, I'm dating myself, but they used to have these sheets that they give you when you're looking for cars.

And there'd be a chart on it with like horsepower, torque, blah, blah, blah, blah, blah, blah, blah. Like hundreds of numbers filling in these columns, describing the car. When women bought a car, they were, they research shows that they were interested in two things, fuel efficiency and safety rating. So when they went and shopped for a car, they weren't looking at this chart of numbers.

They wanted the executive summary on the two things that they were concerned about. I think it's the same with finance. With finance, you sometimes you'll get this pillow with a financial plan. It's like all this backup data that you know, it's just, it's information overload.

But for men it creates security. 'cause they're like, look, all the supporting evidence, this must be right. Women, I believe, look at that and say, that's an overwhelming amount of information and I don't understand it, and therefore I'm, that's scary. And so what we've done is we've made sure to distill it.

We haven't dumbed it down. We've just made the executive summary or the heuristics that you need to pay attention to. And there are two of them. What you can afford for every hour that you work, and then how much you need to put away each month.

To get to the retirement that you determine is right for you, and that alleviates this need for all those other numbers. You can learn more about those numbers, you can dive deeper into those numbers. There's lots of reasons why you might want those numbers if you're really interested, but you don't need them to have a good, solid plan for your money and a good solid path forward. Just like you don't need to know the torque of your horsepower or your car in order to determine if it's fuel efficient and safe for you to drive.

I think it's Monica: I think you just touched on, hey, how all these research and pain points reflect in, in what you've designed with untangled money as such. Yeah. But but we haven't really talked about untangled money so far. Fair.

That's fair for the horse. So tell us a little bit about the. What made you start untangled money? Oh, yeah.

Kristine : Oh, I started life as a national athlete. I was a Paris figure skater in Canada. And so I wasn't afraid to get hurled across the ice, which I thought was pretty cool. And then I became an engineer and I worked in the oil and gas industry and I could design lots of the components on a gas processing plant, which I also thought was pretty cool.

But I didn't know what to do with the money I was earning. And so for me, I went to the bank and I had a really uncomfortable and unsatisfying conversation with a gentleman who worked there, and I left not investing my money, which is a tragedy, not tragedy, but it, that is awful. And I also left being. Maybe this is what I can do with my life.

Like how hard can it be? This is one of my blind spots in life is sometimes I'm like, how hard could that be? Sure. Other people can do it.

He did it. I sure surely I can do it too. And it just lit this fire under me. And so I went, I got my MBA, I worked on the trading floor.

I was a stock analyst. Then I became a portfolio manager. I gained a lot of expertise in money and I felt calm because I now satisfied the question I had about what do I need to do with my money Now? I know my friend from university came to me and said, my marriage is breaking down my, I don't know if I can afford to leave my partner and a financial plan is thousands of dollars.

Can you help? And I said, yeah I can. And. It was then that I realized that the thing I was looking for in my twenties still didn't exist.

That help I needed to get, where do I get started? What do I need to know? What can I afford realistically? And how am I gonna be okay?

What do I need to do to be okay in the future? That still didn't really exist in a way that was affordable and consumable. And so I built that and, my friend was really numerically proficient, right? She was an engineer.

She was, she knew how to learn things. It, she wasn't dumb, and she, it wasn't for lack of attitude. She, there literally wasn't anywhere for her to get these answers in a way that didn't cost thousands of dollars. And so that's when I.

That's when we built it and we started with women because women's pain points are, they identify as having more pain points around it. I think I personally identified as having a lot of pain points around it. I did feel my gender impacted how people spoke to me in the financial services industry. So I wanted to help women first, but the tool is usable by anyone.

It works really well for women. But we've worked with lots of couples, lots of people have used it, so yeah, Monica: that's why we built it. Tell us a little bit of how does the tool work? Kristine : Yeah, they, so we broke it up into three phases.

So first we do need to collect some information about you. We decided not to pull that information on your behalf because Canada doesn't have open banking. I'm happy to talk about why that means. We didn't do that, so you do have to input the data.

We made that as painless as possible and we asked for as little information as possible. So it's age, income where savings, we don't care where you have it, we just wanna know how much there is debts and recurring costs. So we, you input that. Then we talk about the assumptions that we made, and the reason that's important is we wanted to be able to just show you something so that you can react to it without having to.

Ask you all these questions that might be hard to answer, right? What is your comfort with risk? That's a really vague question. Especially, we've talked about all these different risk things.

So we wanted to avoid asking those questions, but we wanted to go over the assumptions just in case they didn't work for you. So one of them is we assume you get the average amount of CPP and OAS. Now if you're a stay at home partner and you're doing care work around the house, or you're managing the home and children or elders then you might have less in CPP. And then, so we tell you by about the assumption and then we give you the opportunity to adjust it.

So you input your numbers. We do a lot of teaching, and then we show you this output and we want you to react to it. And we say, okay, this is a possible plan. What do you think?

We don't really say what you think. We say, okay, here are some things you can do to change that. 'cause most people are now. Short, right?

We use the assumptions and they don't have enough money. So we say, okay, you can get your money working harder for you. Do you like it? Yes.

No, you don't have to like it, right? There's other things and we're very clear about that. So maybe they say, no, I don't think I could sleep at night. And I say okay, what if you could reduce your cost of living a little bit?

That actually has a massive impact on your cost of retirement? Because a hundred dollars a month, you have to pay that 12 times a year inflated every year for 30 years in retirement. So for a 20-year-old, I think that's around $70,000. So for every a hundred dollars that you don't need to spend each month, you can save yourself $70,000 of need in retirement.

That number changes depending on your age. We talk about, what happens if inflation stays high? What do you need to do? We talk about, you know what, so maybe.

You wanna put more cash to work. And then we also say, look, if you can't sleep at night, then that nothing, don't put the money to work. You don't, you have to sleep at night in order to get to 95. Then we talk about maybe you wanna work longer, maybe you're willing to work part-time.

Maybe like a lot of women in the world, you golden girls retirement. You'll move in with friends and rent a place together so you can lower your cost of living. Or maybe it's family, right? The couch.

But I love this golden girls trend. We see it growing everywhere. And so women are, rooming together and lowering their costs and then able to live longer. So we, and then we say, okay, which ones work for you in the middle income?

The unfortunate thing is that we have $3, or sorry, we wanna buy $3, three $1 items and we only have $2. So the world tells us we need three $1 things. We only have $2. And so we need to make trade-offs.

And we wanna help you discover what trade-offs you are willing to make. 'cause you are not gonna make the same trade-offs that I'm gonna make because I, and I don't wanna put my values or judgment on you. I want you to have the information and trust you that you're gonna figure out the best things that, that work for you. Does that make sense?

So yeah, it's three parts. Give us your numbers, we teach you, and then we want you to optimize. And that's what we do. It sounds simple.

It's not, it's, we try to simplify it and make it foundational, but it's not short and it's not, you go in it with intention because you want to understand your money better so you can improve. The choices you make for yourself, not for me, not for society, but for yourself, so that you are aligning your uses and spending with what you want for yourself. Now and in the future. And it is a balance.

There's nothing wrong. We choosing more now and being willing to work for that differently in the future. And there's absolutely nothing wrong with wanting to be more conservative now so that you have more likelihood of having, being able to retire earlier in the future. They, those are two ways to go through life.

And they both have value, they both have merit, and we don't want you to have to pick one or the other. Monica: Yeah. I think when I said simple, that's a compliment. Oh, thank you.

It's hard to build, it's hard to build product in a simple way. Yes. And still have the outcome that you want. So what.

What learnings led you to design untangle the way that you did? Ugh. Kristine : Ugh. We fell flat on our face the first time we went out there.

'cause remember, I come from a traditional financial background. Traditional finance is full of, you should do this, you should do that. I think there's a comfort sometimes in being told what you should do because it takes some of the responsibility away from us. The problem with the shoulds is one, it like, it implies value and it works better when you have lots of money.

So I'll go back to my $3 examples. If you have $5, and I tell you, you should save three of them three, so you can buy those three $1 items, that's a lot easier because you already have another $2 that you can do whatever you want with. When you're talking to someone who has $2 and you're telling them that they should buy these three $1 items, that becomes problematic because I am probably telling you to prioritize the two that I think is best. And everybody's gonna have a different opinion on this and.

And it doesn't work. So the first time we did this, we thought we're gonna go through FP Canada's process. All the information is out there, it all exists. We're just gonna put it together in a nice way.

Think yoga studio instead of a muscle gym. Right? That's what, that was the original intent. And we had 13 women who graciously let us poke around in their finances.

And the first question was, what are your financial goals? No one said retirement. In fact, we had 13 people that came back to us and said, I don't know what you mean. And we said, okay, what's something you need to save up for in order to, what's something you want?

You have to save up for it. What do you wanna buy? And we had 13 women come back to us with things that they couldn't afford. And I didn't even know that because I hadn't run their numbers yet, because I had just asked for their goals.

So I was like, great, thanks. Okay, let's get all your information. I go off, I do these plans, and I realized not only can they not save for retirement, they can't buy these goals 'cause they have $2 and they wanna buy three $1 things. They can do one or the other.

But I don't want to help them buy a second car if that means that they run out of money at 70 and they can't fund the last 20 years of their life. And so what I realized that we had done is that we had, we'd set them up for failure. We'd asked them to birth a dream and then the first thing we said was, Nope. And so we said, so with wealthy people, it's about prioritizing.

That is a what are your goals? We'll prioritize them. For middle income folks, it's about. Expectation management and trade-offs.

So we said, okay, we are just gonna show you one possible path. We picked the average path, so we picked the average rate of return. We picked, we did, we make a lot of assumptions on your behalf. But that gives us a starting point so that you can then reflect, and this happens in the self-serve.

This happens without me, I'm not watching you. In the full serve I am, but in the self-serve, I'm not, you are just, we're just showing it to you so that you can reflect and say, oh, actually I didn't realize this about myself, but I wanna make sure I'm fully funded and I will lower my cost of living today to make sure that happens. And I will take more risks with my money now while it's appropriate to help make sure that happens or to give myself a higher likelihood of that happening.

And other, we had one woman walk through or that we, I, I was like, okay, if you do all these things, you are gonna make retirement. You can retire at 65. And she looked at me, and this was a gift she said. That life sounds awful and I don't wanna do it, and I think you're judging me because I don't wanna do it.

And I sat back and I was just, oh my goodness. She was right because finance tells you're supposed to put the money away that you need until 65. And so I asked her, we started it's wonderful conversation. What would you be willing, like, how do you envision life like playing out?

She says, I'm not gonna retire until I'm 70. I'm gonna work part-time until I can't, and I'm willing to live really cheaply 'cause I want to live large now. And I thought I said to myself, okay, if you can do all those things and that, and you manage your expectations, you don't have to put any money away for retirement. Now you can spend it all, but you're gonna, you're gonna need one or two roommates.

You're gonna work until you're 70 and then you're gonna work part-time until you're 75. And make we, we assumed a minimum wage job. And then her numbers worked. And so that's when we realized.

We can't use this FP Canada process. It doesn't work for people who have $2 and wanna do three $1 things. It doesn't make anyone feel great about the choices. A lot of them, a lot of us, especially I, my kids are no longer in daycare but I still think it's not that affordable.

A lot of us don't have any money left over after paying for rent, mortgage, or, and daycare. That is your life for the daycare years. It's the do it all years. And so imagine then telling someone in that position that they have put a thousand dollars away a month per person in order to retire.

That's just not helpful. And it doesn't give them any other options. And yeah, we really, there was a series of failures that I'm really. Thankful that we went through, because one, we never would've designed it this way if we hadn't.

And two, if I was at a corporation or one of the banks, I would never have been able, my career would not have survived those failures in a larger organization because that's untenable and too reputationally damaging for them. Whereas a startup only working with our, my first 13 people, I could fail a lot and only, probably a handful of people really knew. And so we could learn and fail and learn. And even with our self-serve mini, we know it's not perfect.

We know there's tons of things that we need to improve. It's the first time we're trying to do it without somebody there. And we need people to try it, test it, feed, give us feedback so we can improve it so that we can make it work for people. So we can do this.

I don't wanna help 10,000 women. A hundred thousand women. I wanna help millions and billions of women. There are 6 billion women, middle income women on the planet, and I want them all to have a foundational understanding of their money if they want it at an affordable price.

I think we should all support you. Monica: We do. Yeah. No, I'm curious.

I'm serious. Like we should all find a way to do that. Kristine : The best thing I could ask the audience to do right now is to go and look at the mini and then tell me, if you don't buy it, tell me why you didn't buy it. Because I don't know what needs to be.

I don't know what that gap is. For a lot of people it, we know that it happens at, we call them inflection points, but they're life moments, right? A lot of people, somebody close to them, either a relative or someone that meant a lot to them has passed away. Or even di Diane Keaton or someone who they held with affection passes away.

That can lead to a lot of wills, estate planning, financial planning. It's, there's some really good stuff that comes outta that. Some people, it's when they get a new job, some people it's when they get a new house. It's more deaths though it seems to be the, and how, so how do we convince you this is important at a moment of time when nobody close to you has passed away?

'cause that's important for us. And I don't want someone to have to pass away in order for you to feel like this is an issue that needs attention. And it's hard when there's our biggest competitor is do nothing. It doesn't cost anything that you know of.

And it's the, it's what you know it, yeah. It doesn't, we had one woman. She's this is so sweet, so cute. She's I redid my apartment before I came to you.

'cause I didn't want you to tell me that I couldn't do it. And I. I said, we don't do that. Right?

That's not how it works. But it was, there's this fear that we're going to tell you, restrict you in some way. And we actually focus you on joy because research shows that once you get to middle income and all your necessities have been satisfied, there's a new job that money has to do and it's to bring you joy. And if you ignore that, like a lot of the pundits tell you to, right?

Don't get your nails done. Don't buy the coffee, don't get the avocado toast, whatever the new one is, that is patently false. You have to find joy with your spending. Otherwise your plan is not sustainable.

And that is research and that is human. It has nothing to do with gender. That is just how money works when you get, achieve a certain amount of security with your other needs. And it is amazing to tell a woman you have.

$5 an hour that you can spend on whatever you want. Focus it on what brings you joy. That could be food, that could be fashion, that could be obscure an obscure, hobby collection item, right? It does.

It doesn't matter. It just has to, and it's gonna change over time, but it has to fill you up on the inside. So when I was 20, that was coffee. I loved my coffee.

I would've worked an hour and I did every day to buy that coffee. 'cause it made me feel like a professional. And I had been a student for four years and it just made me feel great every day. And so that was important.

And shame on the financial person who said, don't spend your money on coffee. 'cause that brought me joy. I drink instant decaf now 'cause it no longer brings me the same. It's it does, it's not joyful, right?

It's something else. Brings me joy and therefore I've evolved. But the need has not left. You need to I really like pens now.

It's silly. But I like them. I have a Lego pen. I have an untangled money pen.

I love pens. And so that I spend money on pen sometimes it brings me joy. Monica: Amazing. I want to make it practical and I love that untangled.

It's very practical. I'm so hooked into what you're doing now. Thank you. When we first spoke, you talked about the how to manage our spend with this framework of hours worked.

Kristine : Yes. Monica: So that then you can see if it's something that you can afford or you would like to basically spend your money on. Yeah. Can you explain.

That framework because now I'm linking it with hours work plus joy. I'm like, yeah, can you go through that? Just to make it super practical? Yeah.

Kristine : Yeah. So we combined a few thought leaders in this. So I really wanna shout out Ellen Roseman my. A girlfriend of mine gave me her book when I graduated university over 20 years ago from undergrad.

So thank you to Heather for giving me that book. But I got this book from Ellen Roseman and her, she wanted you to break. She said, we talk about money, like I earn $50,000 a year and it doesn't have any meaning day to day, like when you're buying a $5 item I can afford that. I make $50,000 a year.

And it's endless, right? You can afford everything when you, but she's but you have to pay taxes and if you have, if you're employed, there'll be other deductions. So she said, break it down after taxes and deductions and see how much money you have then per, and she said, do it per hour, because then at least you're in a different frame of reference. Then I read Shannon Lee Simmons, worry Free Money.

Amazing. I think one of the best personal finance books, she's Canadian, written about personal finance. Blew my mind how clever she is. And she talked about these sort of five buckets of budgeting, and she's there is money, we call it committed money, that you're, you've committed to spending before you've gotten outta bed, right?

This is the base level that costs that that you put your money towards. And it's backed by research. And the research doesn't include food because food has a lot of variation. We might have a birthday, which my son's birthday, it was yesterday we bought a special dinner.

So our, but our grocery costs remorse. And then you might eat out a lot. One. And so food is not included, but it, what is included is like rent renter mortgage, utilities, your phone bill, your internet.

And that's why there's not that many, right? Because it's most your car, right? Like insurance, like it's. It's probably 20.

Most people have about eight to 20 things. It could be if you have kids, it could be daycare, activities, stuff like that. But most people have not that many, but it takes up about half of our and debt. Yeah.

Half of our income, if not half to, 70% of our income. And then we want you to pay for retirement. So we, we add in an amount that we believe you can afford to put towards retirement. It's not what you need to put towards retirement, but what you can afford.

And then we say what's leftover is money. You can spend flexibly, food, clothes, gifts, all the things and everything else. And we go back to Ellen Roseman and we say, okay, what is that per hour? Now in 2019, for the average Ontario woman, it was about $4 an hour.

And so we call her Sandra. Sandra could look at a $20 purchase and say. Do I wanna spend five hours of my time so I can purchase that? And what this does is it removes judgment.

If Sandra wants to collect fancy Lego pens and they cost 12 bucks, and she says, and let's say 12 bucks after tax. And she says, yeah, that's worth three hours of my day to me, brilliant. And this is gonna bring her joy. Brilliant.

If she looks at the Lego pen and is that's dumb. I would never spend through, oh, I if it was free, maybe, right? Like they're like, I don't wanna buy that. It's not worth the time.

Then she doesn't have to worry about the marketing campaign from influencers that say, everybody has this Lego pen. Everybody wants to have this. And if you're listening, I have a pen that has four little Lego bricks at the end of it so you can put a character on it. And everybody has this pen.

It's amazing. Amazing. That enables Sandra, this look at this and say, yeah, that's a cool trend. That's amazing.

Is it worth four hours of my time and is it worth four hours that I can't spend towards something else that actually I really like lipstick and I would much rather buy. I would much rather spend two days purchasing a NARS lipstick because I love how smooth and buttery it's, I don't care. And it's not that I don't care. What I care about is that you are getting joy from your money and that you're, it's called high grading in the industry.

It's it's like focusing on the cream. It's, instead of spending 10, 20, $30 on just the I think of it as AI slop, but like purchase slop, right? It's just slop that you don't need 10, 20, 30, $60 on something you really want that's gonna move the dial and it's gonna fill you up and brighten you up on the inside. That is an amazing transition and that's something we see happen when you think about your money that way.

I will say only about half the people really love it, but for the half that love it, it's amazing for the half that don't leave it, you do something else. Monica: Amazing. I think I was, I don't know if to, it's happening the same to listeners, that I was like, as you were speaking, I was like, oh, I was considering buying this thing. Yeah.

And in my mind I was like, oh, that's many hours. Yeah. And I'm like, is it worth this many hours? Yeah.

It's a different way of thinking about it. Kristine : And it takes away all of the judgment because, so I will go personal. I have a house cleaner who comes every three weeks. She used to come every week when now I'm a startup.

So every three weeks, and I think my mother and my mother-in-law think that I'm a bad wife because I can't stay on top of this myself. But every three weeks she comes and I sit in my house. I have three boys and a husband that is four penises that cannot hit the toilet, that's pee around the toilet all the time. Every three weeks, I stand in my house and I breathe in and it smells wonderful.

And I feel so joyful that I can afford this for myself. That this reset, this space that I need to feel like I'm being a good mom and wife and someone else can help me with that feeling. And it is amazing. And I will give up all my coffees for that.

I will give up so many. It's when I, when you, again, you can't spend all the money, right? So when you look at the things that you want at the top, you have to go at the bottom and you go from the top down, what can I afford? And then go from the bottom.

Be like that doesn't make the list. That doesn't make the list. There's the list. And what will I, I want my time and effort for however long it takes that week.

So that I can have her come every three weeks. It is so wonderful, and I can hear the judgment and say, that is your value and your choice. I'm making a different one because I'm using my hours to do this. It's my hours.

It's not yours. They're not yours. Mine. Yeah, it's mine.

So I want everybody to have that number for themselves. That'd be it's so powerful if it works for you. Monica: Yeah. Because it does make you think oh, I've been working my ass off.

What? Kristine : Yes. Yes. Monica: Is this worth it?

Kristine : And it takes away some of this, judgment. It's not that you don't deserve it. It's, and so you hear all this women deserve it. You deserve it.

And I changed that and maybe it's the engineer in me, but I flip it on its head and I'm like, do I really deserve to work seven hours to purchase your product? Not if it doesn't bring me joy. If it brings me joy, then maybe I'd be willing to work nine i, and it helps you figure out the trade off point. It really, an women have two questions that they wanna know about money similar to the car, right?

What can I afford and will I be okay? What can I afford Is why we design the flex money number and will I be okay? Is why we designed the images that show you how long your money's gonna last and what you can do to change it. And then we break that down into what you can afford to put away per month and at what kind of basket or bouquet, what kind of financial bouquet do you need to get to buy in order so you can just go purchase that bouquet at a quest, wealth or wealth, simple and then set and forget it.

And that way there's a lot of effort and work that went in behind the scenes to get those two numbers. But those are the numbers that women tell us they want. What can I afford? Will I be okay?

Here's, here are two numbers that get you there. Monica: And you just mentioned wealth. Simple. So fashion, it's more of a product design question for you.

I guess one of the things that stop us from taking action is okay, finally I got all the education and then it's, I have my plan, and now I'm like, where do I action this plan? Where do I go? I as a foreigner living across the world, I have that issue all the time because I'm not living here, there it's messy, right? Yes.

But then it's even when you live at home, it's like, where do I go? Do you, have you integrated with well, simple. Not specifically with yeah. With others that it's like, Hey, here's a plan and here you go.

We've partnered, we've given you the solution already on how to go ahead. Kristine : I originally, when we came up with the vision, yes, we wanted and. And when we came up with the vision, Wealthsimple actually had accounts that you could connect and do that. So that was actually really neat.

And so we had intended to do that in some manner. We don't interestingly I left professional investing because I saw Wealthsimple come onto the market. And the reason I left is most of the time they're gonna be better than me. They're better than 80% of financial professional investors.

They perf outperform 80% of professional, and they're a lot cheaper than me. And I think people don't recognize how important small percentages are. So let's say I used to charge 1.5% in the industry.

We would call that 150 basis points. We make it 150 because each one is so important. That's how important one basis point is. Wealth Simple or Quest Wealth does it at a half, if not less.

And so I thought, why would anybody. That's better and cheaper. Why would anybody pick me? And so I thought I was having my third son and I thought, I need to go back.

When I go back to work, I need to not go back into professional investing. 'cause I think that industry is gonna be decimated. And it wasn't because, and I think a lot of people just don't understand what it is. So we really want our users to use a RoboAdvisor because it is the most value, generative way to invest your money.

It is also well, simple. Simple, right? It's meant to be simple. Simple, spend a lot of money on their onboarding.

So it's a lot. It's very easy to get started. Quest Wealth is another big one in Canada. Quest Wealth came later and they're a little harder to get onboarded with, but they perform much better than, simple, at least in the history that we have.

And right now I'm more inclined to recommend Wealth, quest Wealth and we're not affiliated with any of them. I don't get any money for saying it, and I like it. That's a promise to our users and our clients. We will never make money off your information.

We don't sell your data and we don't get any money from any of the recommendations we make because I wanna be able to change my mind. Just like I used to say, probably. Simple is your better option because it's just easy. It's easier to get started and we know getting started is more important than the fee.

So overall, getting invested trumps everything else. Next comes fees and performance. But now I do think Quest Wealth has put more effort into onboarding. I think it's easy enough that I think people can get there and they're pretty good with the, you can call and get help.

And so now I was able to change my mind 'cause I'm not partnered with Quest or Wealthsimple and I can say, I really recommend you do this with quest Wealth again. It's most important that you're investing your money. You can optimize and perfect where you do it, how you do it, what you do it with later. The most important part is to be invested in nons speculative things.

So there is nothing wrong with Bitcoin or cryptocurrencies or even NFTs, even though I think they're out of fashion. There's nothing inherently wrong with them, just like there's nothing inherently wrong with spending money on a piece of art that you want to sell later, but they're speculative because we don't have the same amount of information about them and we don't understand necessarily the drivers. So we can't say, this company is more efficient in the way they do it, and therefore a better value and you should invest with them.

Or these are the fundamentals of the industry and and the inputs costs are going down and therefore we expect them to be able to make better profit. Or here's the history of the s and p 500 going back a hundred years, and we have ex, we have a probabilistic idea of what, what expected outcomes we think there are. When you don't have that information, that's what makes it a speculation. So we want you to invest your money, preferably not in speculative things, more than 5% of your money, and we don't care who you do it with.

We prefer Quest Wealth because it is the biggest bang for your buck and that will get you further faster. Monica: I like that further faster. Yeah. And I think as we approach towards the end of the episode, yeah.

There's a kind of scary fact out there as well. Okay. But it's hey, if we leave, if we make it to 65 years old then there's a high likelihood that we'll still be alive at 90. Yes.

Yeah. So then it's retirement age is at 65 or maybe a little bit higher in some countries, but then it's like that means that you will have to live for 25 years without working. Yeah. And that is scary because then you're like, if you look at worldwide, the great majority of people, when they lose their main income, they don't have one month worth of savings.

Yeah. To live without working. Therefore, if I need to live 25 years without working Wow. Kristine : What's your Monica?

I'm gonna make it even worse. Best practice is 95. You want to, you want your financial planner to kill you at 95, not 90. And so let's break it down.

They tell you our LA average life expectancy is 87 in Canada, I believe. And so a lot of banks use 90. Please tell them to kill you at 95. And I'll explain why not all of us make it to 65.

And that's unfortunate. However, if we find ourselves alive at 65, the Globe and Mail published that more than half of us are still gonna be alive at 90. And if your bank killed you at 90 in your financial plan, that means more than half of us that are still alive at 90 will have run out of money. And that's terrible.

FP Canada, so the, again the. The agency that oversees financial planning. They've used 95 for decades. And it's been seen as you, it's been, told as that's what we should use unless you have any reason otherwise.

I once did someone's plan up to 108. She has four grandparents that are still alive in their hundreds. And I was like, great. So 95.

So that's, you are working 40 years of your life to pay for 30 years of your life. That's crazy when you think about that, right? And so that's why retirement planning is so important, right? We see a lot.

So how do you manage this? A lot of countries are extending the retirement age. I think England was either 67 or and you'll keep seeing that, which is, it's sad 'cause I don't think. I think 40 years of working is a long time.

And I do think I'm gonna work past 65, but that's because I get a lot of joy and mental stimulation from work. It doesn't feel like work the same way I think other work feels. And maybe I'll change, I, I wanna have the capacity to change my mind, so I do plan for 65. But when we look at longevity, if we are, if we make it to 65, more than half the women are alive at 90.

And about a quarter of us are still alive at 95. I think it's a great thing. I just think, I think you wanna spend a little bit of time. Thinking about what you want your future to be.

And I think people spend more time on what cell phone they want for the next few years, which I get 'cause you're gonna use it every day and it's important. But I think we spend more time on that decision than thinking about what we want our retirement to look like and what kind of agency we want over it and what kind of flexibility we want there. And again, I look back to that woman who told me she hated what we came up with and I thank her because you there, there are people that.

That want to live more today and they're willing to keep working to so that can happen. And then there are other people who want to, we have a family member who retired at 50, right? Amazing. But that sort of fire mentality that they're retiring even younger, but they're really restricting it.

And that, that aligns with what they want to do and the lifestyle they want. Both are great and one isn't wrong, but whatever your plan is. If there's no medical or historical reason, why not to think that you're gonna make it to 95, please ask your financial planner to use 95 if it's the bank plan, if it's your financial planner you're working with, if it's your your advisor, 95 minimum. It's just, it's great that we live so long.

How are we gonna pay for ourselves? That's 30 years and it's in, and the last five years are so expensive. That's 25 years into your retirement, and that's 25 years of inflation, roughly. Roughly at a 2% inflation point.

Everything doubles every 35 years. Wow. So things will be almost twice as expensive for those five years. And that's why the banks don't do it.

They want you to, they wanna sell you a good news story, and 90 is a much better news. Monica: We covered a lot of, a lot of the problem statement and a lot of the solution on how you're adding value to people's lives. What is your key takeaway for any woman or man? Listening?

Kristine : Every rich person I worked with had a financial plan. It's built into their DNA and one of the things I didn't realize when I got into this is that people in the middle income are not as primed or educated or trained to have a financial plan. We know as humans that if we wanna run a marathon, a training plan is gonna improve our chances of getting there. The difference between money and a marathon is that not all of us are gonna run a marathon, but we are all going to have to manage our money.

And even a rudimentary financial plan makes you twice as likely to reach your goals. That's powerful. Please look at your financial planning options. You should do it once a year, and please have set your expectations.

It doesn't matter where you get it. We charge about $250 for ours 'cause we wanted to make it more affordable. At least check it out and see if it's for you. But get a plan.

Know I wanna end with a bit of a sharp question. It's two-parter. Do you know how much money you need at 65 so that you can retire? And if you don't know, how are you gonna get there?

How do you even know if what you're doing today is enough and if it scares you because you suspect it isn't enough, that's okay. That's why we have trade-offs, and that's why we can consciously look at a plan. We know that once you start, we do a better job of getting there, right? Because we align, we stop spending on that 10, 20, 30 swap, and then we put our money towards the things that matter to us.

So it's a gift. Monica: Yeah, I think it, it's a great question. It's a great question to end, and it's a great question to continue to ask ourselves. Yeah.

Kristine, it was an amazing pleasure speaking with you today. Thank you. Likewise, Monica. Thank you.

Thank you. Okay. Thank you everyone. See you next week.

Chow. Woo.