This social-media star helps women get richer. Here are her top money tips.
LINK TO ARTICLE: MarketWatch Interview
Tori Dunlap founded “Her First $100K” to help women better understand their money and finances — and to guide them through the myriad obstacles they often face in building wealth. Dunlap followed this up with a financial advice book, “Financial Feminist: Overcome the Patriarchy’s Bullsh*t to Master Your Money and Build a Life You Love,” and currently offers money-management tips on her “Financial Feminist” podcast.
Dunlap’s popularity — she has millions of followers on social media — has helped her achieve financial independence. Dunlap wants other women to follow her example. “I’m passionate about women making sure they not only have their own money, but have control over those funds,” she says.
Building your wealth starts by learning everything you can about personal finance, Dunlap says. These five questions to ask yourself are a good place to start:
• Are you negotiating your salary effectively?
• Are you thinking about starting a business?
• Are you getting compensated for your actual worth?
• Are you spending money according to your values?
• Are you certain your money is well spent on the things that you actually love and need, as opposed to spending mindlessly?
In this recent interview, which has been edited for length and clarity, Dunlap explains how to build wealth, find investments that protect your portfolio from market volatility and improve your financial security.
MarketWatch: How did you make your first $100,000?
Dunlap: It was a combination of things. First, it was the ability to graduate with no student debt. I worked three jobs on campus and worked summers. My parents contributed to my college fund. Secondly, I prioritized spending according to things I wanted to do rather than feeling I had to spend money on everything. Third, I had a side hustle, which allowed me to save a portion of my income. I opened up a Roth IRA when I was 22 and maxed my contribution every year.
MarketWatch: What do you want women to learn about building wealth like you have?
Dunlap: I want women to know that it’s possible for them to build wealth in a sustainable way. Women are less likely to invest than men, and often start later in life, which causes them to miss out on millions of dollars in compound earnings — but there are resources out there designed specifically for them.
MarketWatch: What specific advice would you give anyone wanting to build wealth?
Dunlap: First, I would make sure your savings are automated. Building your emergency fund should be at the top of your list, regardless of how much debt you’re in. Another tip would be to make sure you are fairly compensated for your work. Negotiate for more, or move on. Third, make sure you’re investing as early and consistently as possible.
MarketWatch: Is it hard to follow this advice?
Dunlap: Yes, it’s easier said than done! There are many systematic barriers that keep women from building wealth. The trillion-dollar student-debt crisis impacts women more than men. The wage gap and pay gap — women are constantly up against these barriers in addition to just trying to manage their personal finances.
MarketWatch: What are some common mistakes that women make with their money?
Dunlap: This may shock a lot of people, but a vast majority of women don’t know that the Roth IRA or the 401(k) is not the investment itself. A lot of women think that they deposit their money into mutual funds, but don’t realize that their investments really go into a cash account. It is a two-step process; make sure you transfer money into your account, and then buy investments with that money. Otherwise, you’re keeping your money in what I jokingly call “financial purgatory!”
MarketWatch: What stock-market investment approach do you recommend?
Dunlap: Sustainable long-term investing, rather than trying to pick the next hot stock. Essentially, this means you’re not putting all of your eggs in one basket. You’re making a more diversified, low-risk choice. I personally like index funds for that reason, and own shares of Vanguard Total Stock Market ETF (VTI)
MarketWatch: What are effective ways for an investor to handle stock-market volatility?
Dunlap: Make sure you have at least a three-month emergency fund in a high-yield savings account. This is just like a normal savings account, but it’s going to earn you way more in interest. Be protected in case of an emergency before you start investing. Second, have a secondary source of income to insure against losing your job or facing a financial emergency. You don’t want to be solely reliant on one source of income.
MarketWatch: What is one of the most important lessons you have learned about money?
Dunlap: One of the biggest financial decisions concerns your choice of a partner. Whether it’s marriage or a long-term relationship, that partner is going to directly impact almost every financial choice you make.
MarketWatch: Why do your podcasts and books resonate with so many people, especially women?
Dunlap: I think that a lot of personal-finance education was shaming and judgmental. It was focused on how you didn’t make the right choices or that you are not working hard enough. It is refreshing to a lot of women who are outwardly feminist. Her First $100K is a feminist company that talks about money. That idea has connected with our community of 5 million women who feel safe and aren’t judged for their personal finances. We also take something that has felt intimidating — personal finance — and make it easy to understand.
MarketWatch: What else can women do to improve their financial lives?
Dunlap: I’m passionate about women making sure they not only have their own money, but have control over those funds. If they need to get out of unsafe situations that they don’t want to be in anymore, they should have access to their own money. And if a relationship should end, they need to learn everything they possibly can about personal finance so that they’re able to stand on their own two feet.
I always tell women that a financial education is the best form of protest. In a society and system that makes sure women are controllable by constantly franchising them, and keeps them playing small, having money means having options. I’ve seen it with literally millions of women who can leave abusive marriages, take care of their ailing family members, pay off their student loans, save that first thousand dollars and breathe easier because they have their own money.
Michael Sincere is the author of Help Your Child Build Wealth and Mr. Sincere Teaches You How to Sell Covered Calls.