How I Invest My Money + The Importance of Human Capital With Lazetta Braxton
30:55 Share

So within the four years of us marrying, I had student loan debt. He had student loan debt. We had consumer debt. We knocked it out in four years and started to build our go-to-hell fund or get-out-of-hell fund because oftentimes when you're a part of an oppressed population, that's exactly what you're dealing with. Welcome to the Stay Wealthy Podcast. I'm your host, Taylor Schulte, and today I'm joined by special guest, Lizetta Braxton.

Lizetta has appeared on NBC Nightly News and Closing Bell. She's a member of the CNBC Digital Financial Advisor Council, a Wall Street Journal blog contributor, and she co-wrote a new book titled How I Invest My Money, which was illustrated by friend of the show, Carl Richards.

In our conversation, we talk about investing in human capital, Lizetta's go-to-hell fund, and how she's working to provide broader access to financial advice. For the links and resources mentioned today, head over to youstaywealthy.com forward slash 106.

Okay, so you're the co-founder of 2050 Wealth Partners and your bio, which really I enjoy to read, your bio states that you're on a mission to provide access to financial planning for the rest of us. So I thought just to kick us off today, I'd love for you to just tell us a little bit more about that mission that you're on and the why behind it.

Yes. So the financial planner for the rest of us is really allowing people to know that you don't have to be in the 1% to be able to have a financial planner, a financial advisor. And what we often find in terms of our conversations is that people are like, do I deserve a financial planner?

And I even often hear, well, what is a financial planner? And that's another whole conversation because people still confuse being a financial advisor with just investments with a holistic approach that we take with financial planning. So it's really to allow people to identify if they feel like the rest of us, meaning that they haven't been serviced by Wall Street.

And recognizing that they too deserve to have access to competent, ethical, and very engaged financial planners. A common question that I get, and I'm sure you get it too, is how do I know when I need a financial planner? I'm curious, how do you answer that question?

Two fold. There are some people who seek a financial planner because they're in a crisis and they say, OK, I make all this money. I inherit all this money. What do I do? And then you have the people who have said, I've done all of the rule of thumb's.

I have my cushion account, my emergency savings. I'm maxing out my 401k. What do I do next? How do I ensure that I am making the most of every dollar that I have and living the life that I want to live and be able to transfer that wealth to generations to come? So if you find yourself in either bucket saying, I'm at my wit's end, or I want to enhance

what I'm doing with my finances better with an expert. Those are two very good reasons to seek out a financial planner. Did you start on day one with this mission to provide access to financial planning to the rest of everyone? Or did you work in a different environment, which then kind of catapulted you into this mission saying, you know what, like I've seen what it looks like on the other side. I want to do something different.

It started with the experience I had just with my parents. They are high school sweethearts. They had me right after graduating from high school and struggled financially as a young couple in a rural Virginia town.

And so I began to wonder if their financial challenges were related to their choices and or systematic issues. The town that I lived in didn't have a lot of black professionals, including no black bankers. I remember admiring...

a female. She became a CPA. She was a graduate, 12th grade. I was in middle school. And I'm like, I want to be like her to be engaged in finances, math, business in some way to figure out how to help my parents. So that was a

quest for me to figure out personal finance in a way that my family could live comfortably and make their dollars stretch and work for them. My journey ended up taking me to understanding Wall Street, noting that I had no desire to stay on Wall Street per se.

So as soon as I got my degrees in finance, my experience, I knew it was time for me to take the leap and really focus on, at the time, the mass affluent.

Well, you've had a really impressive career and you recently co-wrote, I hope that's the right term here, co-wrote a book last year that really made waves in the finance world. It's called How I Invest My Money. And there were about 24, 25 other contributors. Many have actually been on this show. And it was also illustrated, which is really fun by my good friend, Carl Richards, who a lot of our audience knows. He

he's famous for his Sharpie drawings and his New York Times column and has written a couple of my favorite books. But How I Invest My Money is a really unique book, and I'll be sure to link to it in the show notes for everybody. Your chapter really stood out to me because more often than not, when we talk about investing or making an investment or

our brains kind of immediately turned towards stocks and bonds and real estate and making money. But the very first sentence of your chapter just grabbed my attention when you wrote, my very first investment was in me.

So I know you're just sharing a little bit about money growing up, but I'd love for you to expand just a little bit more before we dig into that first investment and this concept of human capital. I'd love to just hear a little bit more about like what money was like for you growing up and how your experiences with money in your youth maybe have helped shaped who you are today and this mission that you're on.

Absolutely. My father continues to be a construction worker. My mom worked in a factory and later became a licensed practical nurse, LPN. And so what I realized in terms of our wealth was so tied to them working and to their gifts is

and what they were passionate about. So although they didn't make a lot of money, they were really proud of the work that they did and how they helped other people as well too. That's how I understood the value of human capital, about your contributions and then realizing that you deserve comparable wages and salaries for what you bring to the table.

And as a Black female, with all of the wage gaps, the income gaps as well, that's why I focus so much on the human capital because there are these gaps that you may work as hard and get as many degrees as a counterpart and still be paid less. And with the income gap and the wage gap, it ultimately can result in the wealth gap. And wealth is...

When you have options to go where you want to go, live how you want to live, leave jobs if you don't want to work there anymore. And so for me, I always want to make sure with our clients that at bare minimum that they're doing what they love.

and that they get paid equitably for what they do and what they bring to the table. And then from there, that asset, that you generating that income stream, which is income, we always talk about multiple streams of income, being able to redeploy that so it's not all active, meaning that it's not all you working so hard to continually to generate that income, whether you can diversify from the asset of you,

to other assets that will work harder on your behalf.

I've said on this show a number of times that our behaviors and attitudes towards money start at a really young age, like seven or eight, even they say. And I can remember way back when I was six, seven, eight years old and little things that my parents did that have stuck with me today and have really grounded some really important money habits and behaviors. I'm curious, is there anything way back then, age seven or eight that your parents did that have really had an impact on you? Yes. My

My parents, particularly my dad, was very clear about what we had and what we didn't have. So when there were conversations, and even at seven or eight, I remember in elementary school about fashion and design and Jordache and different things. And I'm like, I want that label. I want that brand. And my parents were like, no, it's not worth the money. And no, you're not getting it. And so there was a part of me that appreciated them being very clear about

on the budget and what we can do. And then there was another part of me to say, this feels very restrictive as well too. And so I did, I had to balance that notion of it. Was it really scarcity mindset for my parents or abundance with wisdom? And actually it was a combination of the two I realized and had to develop my own relationship with money because of those two competing factors.

the positive aspect and also the negative aspect of that too. Do I feel as though we were comfortable, relatively speaking? Yes. My dad, as a construction worker, also decided to build our house himself. And the construction process took a long time. So it always feels so comfortable to constantly live in a construction kind of environment.

house, but that's how he made the dollar stretch because we didn't have the full money to just have someone build around at the time we lived in was a mobile home. And as the family grew, we needed more space and that took time. That was challenging, but I was definitely very loved as well too. So one of my notions for me was, okay,

Once again, making wise decisions with what was available to me and also believing that I deserve to be able to have nice things because I want them within reason as well, too. What's really fascinating to me is money.

like you said, wasn't growing on trees growing up. And when you graduated high school, you had a full ride basketball scholarship to a division two school. And although your dad encouraged you to

to accept it in order to kind of help with the family's financial situation. You declined that scholarship and you took this giant risk and instead decided to attend UVA, the University of Virginia, which is a D1 school. So talk to me about how that all shook out and that conversation with your father and how you decided to take this risk and take this leap and go to UVA.

So as a part of being the oldest child, taking on a lot of responsibility and didn't want to be, in my mind, a burden to my parents. I worked two jobs in high school. So I already felt a sense of independency because I had my own money. Was it enough to pay rent and other things? No. But it was enough to take care of what I wanted and also save for college as well in terms of having spending money during college.

So when it came to that decision about playing basketball, I'm like, Dad, basketball is not going to help me for the long term. I understand the short term aspect of it, that I wouldn't have to incur any school debt, student loans. But I'm like in the long term and I'm thinking of myself as an investment. And then I can tell you then I didn't know a whole lot about stocks or bonds as I was an accounting major.

Well, accounting, not a major in high school, but that was my focus was accounting. I'm just like, I see no future in basketball. And then the other aspect was just very challenging. Once again, as a black person and female as well, too, that I declined it from a historically black college offer. And so there were family members that said you should support and be around our community. And like, I appreciate being black, but.

And I also know there's a whole bunch of wealth at UVA. And that was on my mind. It's like, how in the world did these people have so much wealth? I want to know and I want to be around it. Even though I did not in any way have any of the, I want to say, social etiquette, if you will, understand that culture, the wealthy culture, none of that, because I just wasn't exposed to it, wasn't raised a part of it. So I knew it was going to be a stretch for me.

And I saw it as a business decision to attend UVA just for that very reason. In-state tuition was nice as well, too. But I still had stony loans and I knew I was on my own. At that time, parents did not co-sign for loans. And so it's like, I'm going to do this. This is an investment. I'm going to be around the wealthy. I'm going to take this plunge and I'm going to make it work. And he said, OK, we'll make it work. My parents were married at 19 and 18.

When I graduated, I was 17. And so in my mind, like I'm already an adult and this is the adult decision that I made. Correct me if I'm wrong, but to me, it feels like a risky decision at 17 years old. Is that accurate? Risky, probably from the standpoint of one from the town that I attended.

My educational background wasn't as robust as a lot of the students there. So even though I graduated in the top five of my class, in high school, there was definitely an educational gap. Two, the risk is I knew I was an outsider.

I wasn't a senator's kid. I wasn't a doctor's kid at all. But I didn't really meet the profile of a lot of students that I knew would attend. Emotionally, that was very draining at times and very isolated as well, too. What really helped me, which I found out later,

Once I was there and actually kind of the summer before was I got involved with a program that was geared towards black students. So I found community right away and became a part of the peer advisor program. That was a lifesaver for me.

And so the risk for me was probably real more so the academic and socially, but I was already determined. I mean, in high school, I excelled in academics. I excelled in sports. I was in the band. I was a cheerleader. I led the beta club. So I already had a high capacity for pushing through. And so I'm like, here we go. Let's do it. I love it.

And then you met your husband shortly after graduating. I'd love for you to talk a little bit more about that, which is another investment in yourself. But first, I just have to ask, talk to us about this GoToHealth fund and where this came from and who came up with this clever name. So my husband and I met in 96. I graduated in 95, so I'm a Gen Xer.

And the way that we met was through a mutual friend slash cousin. So my cousin who also went to UVA, Brad went to UVA. Brad graduated the year I matriculated to UVA. So we missed one another. And so I was living in College Park, Maryland. Brad was living in Baltimore. He was finishing up his PhD through Emory and also pastoring a church. And so the way that we met was actually attending his church services.

for which my cousin was a member of the congregation. And so we met, that was July of 96. We got engaged December of 96 and married in September of 97. So very quick courtship. What we immediately found in common was that two things. One,

Our view on social justice activism really based once again in the person and humanity. For me, it looked and does still look like the human capital aspect, getting what you deserve economically. For him, more of obviously the more spiritual side of it, that we're all God's children. And so our alignment on believing in core humanity,

And also noting that the way that we courageously lift our voice and that a lot of places would not agree as Black vocal people about things that matter. And so because we shared that, we wanted to have that flexibility to have cash reserves and leverage our human capital that we would be marketable.

even knowing that some firms may see us risky as a risky investment as well.

So within the four years of us marrying, I had student loan debt. He had student loan debt. We had consumer debt. We knocked it out in four years and started to build our go to hell fund or get out of hell fund. Because oftentimes when you are part of an oppressed population, that's exactly what you're dealing with. Racism. And then for me, sexism. And these are the isms that we had been fighting against when we were in undergrad.

And immediately realized that pretty quickly upon meeting. And so do you still manage and replenish your go to health fund today? Oh, goodness. Yes. It's a constant. And there's no different from people who say their cushion account. Sure. And you have to realize how much you really need. So that's why I'm able to be an entrepreneur.

Well, it's so much more fun to fund your go-to-hell fund than it is an emergency fund. Some people may feel like it's an emergency to be able to leave their job because so many people stay in their jobs because they need the income. No! Never wanted to be held hostage by institution.

ever. And that's how I'm wired. For him, he likes the, in terms of risk. So let's think about this as you think about people. Are you a bond or are you a stock? I'm a stock. A lot of risk. You use the term risk. I have a high stomach for it.

And if I have to scale down the way that I live to be able to be independent and free and happy, I'm going to do that. My husband has a degree of risk, but thank goodness he's more of a bond because he does like the stability of institutional income. And I appreciate that too, because we both can't be stocks and we both have been stocks at certain aspects of our marriage together.

So with him, in terms of his voice, he has to manage that a little closely. Whereas for me, as you know, and what you see in the financial services industry, I have liberty to speak on behalf of a lot of people because I don't have the fear of someone trying to attack my economic opportunities at all.

That's very liberating, extremely liberating. We kicked off this interview talking about the mission that you're on and getting people access to advice. Talk to us a little bit about what your firm looks like today and who you guys specialize in working with and what you do for your clients. And maybe most importantly,

How do you guys help your clients invest in human capital? How do you implement that inside the practice? 2050 Wealth Partners, Riyanka and I, Doris and Bill and I merged a little over a year ago. So I had founded my practice in 2008.

And I believe Riyanka had founded her practice in, I kind of missed the years, 2014, 2015. We had been masterminding together, meaning sharing best practices as fee-only financial planners, as women of color leading our own firms. And we were like, well, since we are aligned in so many ways, why not join forces?

The 2050 for us is very significant because the Census Bureau says by the year 2050, the U.S. will be a racial mosaic. And we want wealth to be able to transfer along with that. And so by coming together, we're both fee-only. We both are bona fide certified financial planners, which means we anchor everything that we do in goal setting and also looking at cash flow, tax planning, investments, retirement planning, college planning.

insurance planning, estate planning, very holistic, helping people navigate buying a home or dealing with intergenerational wealth transfer and even care as caregivers as well, financially and physically as well too. And so we are very structured in our first year where we're in the first four months have established a financial plan to include lots of conversation and data analysis. And then we take the deeper dive

And the areas that I mentioned and within the first year, that's the foundation. And then we do ongoing maintenance, looking at each of the areas divided over certain quarters to be very intentional about that. So even with that structure, if there are needs that the clients have,

They can always do a check-in as well, too, which happened a lot last year with the pandemic and making sure that their financial plan was at work and any adjustments that we need to make. In terms of our segments, we serve thriving professionals, entrepreneurs, entrepreneurs

first-generational wealth builders and sandwich generation wealth protectors. I lean more toward the sandwich generation wealth protectors because there are two generations ahead of me. That would be the baby boomers and the silent generation. Three generations behind me, which is so interesting with the millennials, Gen Z, and now the Gen Alphas. Bianca has done a lot with the first-gen wealth, which

That is a lot of millennials as well too. And so there is some cross-section between those four categories. And what we find just in the commonality is they're all just trying to make the most of what they have and appreciate the intentionality about underserved and overlooked populations. The wealth spans from the

Mass affluent to the high net worth up to about 5 million as well too. So it's just great being partners on the journey together with

How do you guys handle situations knowing that you want to provide access to financial planning? And I think one of the maybe misconceptions, if we want to call it that, is that I don't either have enough money to work with a financial planner or I don't make enough money to pay a financial planner. So have you guys structured a fee schedule in a way that allows more access or do you guys have programs that allow more access?

pro bono opportunities or what are you doing inside of 2050 to cater to more people? So let me kind of anchor it in two different segments. One, the sweet spot that has been for financial services has been clients with a million dollars in assets under management because that generates a fee of $10,000 at the 1%. So that's kind of the entry point.

And then you have on the other end of the spectrum where there is this pro bono or and then elevates to coaching with the coaching and the pro bono really focusing more on savings and debt because they can't really provide financial advice.

For us, we're kind of in the middle where for our baseline single household is $5,500 and then $6,500 for couples. And all of this is on our website, full disclosure.

And what we see with our clients, many of them have not worked with a financial planner before. They've been kind of do-it-yourselfers and certainly having disposable income. Some we have to help them turn their income into assets as well, too. And what we find is a lot of people will spend what they spend on us, and we're with them all year, constantly, every year, on vacations, memberships they don't use, whatever.

dotted out, which was a case before COVID and the like. And so usually we may find ourselves maybe 2% of income, 3%, which is

not a whole lot for what we're able to do in the time that we are invested. We leverage technology a lot. We are very efficient with our workflows, expectations of sharing this partnership as we provide education, guidance, and assistance with implementation as well too. So we are serving the mass affluent, the upper, well, the high net worth on kind of the lower end, the entry point for the financial services and workforce.

Worked out well for us. We're a team of four.

So Rianca and I as partners, and then we have two full-time associates. One is a certified financial planner and the other person is kind of just wonderful. She's done a rotation in every area and also helping with pair planning as well too. So we are in the growth mode and we'll continue to expand our team. And with our business clients, we start at 10,000 for them because it's more

involved with them having kind of the same number of team members and needs of businesses, which as we know, quite engaged to work as well too. And mirrors very similarly, the personal financial planning process in areas. Absolutely. Well, you and Riyanka are absolute rock stars. It's been really fun to watch you guys from the outside. This is the first time you and I have actually gotten to connect and chat, but I love what you guys are doing. I'll continue to follow along and

Before we kind of wrap up here, I just want to kind of ask an open-ended question. There's a lot going on in the world. There's a lot going on inside of our profession. And I was just going to ask, is there anything that's on your mind right now, this week, this month, that you want to use this platform to voice or talk about? Yes, we...

Talk so much about human capital, and I appreciate you, Taylor, for anchoring our conversation on something that's so dear and so important to me. I've alluded to how I have approached human capital from the aspect of financial planning. You asked, what do we do? There is an example of a client who...

He shared with me his title. We did a Google search and looked at salary.com and realized he was grossly underpaid and he would never thought about kind of the range that he should be making based on that title and the size of the company. And so these are the things we do tactically as well too, to make sure that people are getting their value and worth and have support and data behind it. I extend that work with financial planning to also consulting to help people

registered investment advisory firms as well to help to unleash human capital. My mantra is transforming human capital into equitable social and financial capital. And that's what UVA did for me was to give me a space where I brought my raw human capital. I expanded my social network that helped me find jobs.

placements when I moved, my family moved to different areas. And then with the financial capital, being able to, because of my experience, my education, my network to command higher salaries as well too. And so what I want RIA firms that are predominantly currently still white males is to have different perspectives on

just what they've experienced with their own communities and

and stretch. I had to stretch and it's benefited me. And I think we all have a responsibility to kind of rethink about what is risky for that return. And particularly with changing demographics, we can't afford anymore to remain in our comfort zone. So it's been extremely rewarding for me to work with

with these firms under my separate brand, Lizette and Associates, and team there. And then also volunteerism. I also have dedicated a lot of time, time is our currency, to many organizations in helping them understand how to engage diversity, equity, and inclusion. Most recent that I'm still very much involved with is the Association of African American Financial Advisors, also known as Quad A.

as well as Quad A Foundation, where we're focusing on HBCUs and the next generation of Black advisors to also include those who are at PWIs, predominantly white institutions. And I've worked diligently with the CFP board and FPA and NAPFA as well too over the decades. So the theme for me

a lot of people see it anchored in race. And I even had someone on social media saying, is all you talk about is race? And I'm like, well, no, that's not all I talk about, but I have to talk about it because it's a barrier to economic capability and strength. And until that changes, then we're going to still have to work on that because that's what I do as a

my client's best interest first. And I want to help firms unleash all this wonderful capital that's underutilized and also not valued as well too. I love it. Lizetta, thank you very much for joining us today and sharing your story and talking to us about human capital. I'll link to everything in the show notes, including the book, How I Invest My Money, your website, everything. So thank you very much for taking the time today. And

I would absolutely love to have you back on again in the near future. I would love to as well too, Taylor. And thank you for leveraging your platform for diverse voices and being very inclusive with your questions as well too. I appreciate you. You're very welcome. This podcast is for informational and entertainment purposes only and should not be relied upon as a basis for investment decisions. This podcast is not engaged in rendering legal, financial, or other professional services. ♪