591 Tiffany Kent:
The numbers always tell the story of a business and yet all too often women entrepreneurs shy away… …from knowing their numbers and putting the right financial plans in place for their businesses and their personal wealth.
I’m Melinda Wittstock and today on Wings of Inspired Business we meet a former Goldman Sachs and Bernsteen wealth management advisor turned entrepreneur.
Tiffany Kent is the Founding Partner of Wealth Engagement LLC, a Certified Financial Planner™, Board Chair of the Harvard Business School Club of Atlanta and author of the recent book Investing for the Smarter Sex.
Today we dig deep into all things money and financial planning – for your business and your life. So I can’t wait to introduce you to Tiffany! First…
Tiffany Kent is a former Vice President and Financial Advisor at Bernstein [bernsteen] Private Wealth Management. Prior to Bernstein, Tiffany constructed client portfolios and managed a $200 million equity long short portfolio as an analyst, portfolio manager and partner at several investment management firms. Before that, she worked at Goldman Sachs as an Associate in investment banking.
What began as simply helping out her mother with managing her checkbook at the age of 14 years old, grew into a passion for not only growing clients’ wealth, but a mastery for teaching others the methods and science of financial analysis so they can make better financial decisions.
Today we talk about the common mistakes many women in business make when it comes to their own personal financial planning – as well as for their business. Why is it we often pay ourselves less than our true value, hire too late to put a multipler on our business growth, or simply fail to get the financial expertise we need to grow and scale our businesses most effectively? Today you’ll get practical tips you won’t want to miss, so let’s put on our wings with the inspiring Tiffany Kent.
Melinda Wittstock: Tiffany, welcome to Wings.
Tiffany Kent: Thank you, Melinda. How are you?
Melinda Wittstock: I’m doing great. Thank you. And I’m excited to talk to you because you recently took the leap into entrepreneurship with your own business after a long time at Bernstein and Goldman Sachs. What was the impetus?
Tiffany Kent: Well, actually, there’s always a long story and a journey that comes with any business, I think, but I’ll keep it short. Is that five years ago where I was… At this point in my life, I was early 40s. I had built up a pretty impressive resume, track record. Went to Harvard Business School, became a portfolio manager in New York, Wall Street picking stocks and bonds. And after I achieved all of this, I actually felt more confused and stressed than when I managed $200 million at the hedge fund. And I didn’t know it at the time that the reason why I felt this way was that I didn’t know where I was going in life. I didn’t know what was important to me. And I didn’t know how to invest in my future version of myself. And lastly, which is kind of crazy to kind of… I forget that I did this, is that I felt like I was really alone too, and that I couldn’t find anyone to speak to about this frustration that I was experiencing in my life.
Tiffany Kent: So what my dream was and what I figured out was that… It took a lot of soul searching and I then realized, “Wait, I want to start my own firm. I want to start my investment management and financial advisory firm.” But I didn’t know how to do that. And I was kind of scared but I wrote down my dream anyway. And so it took quite a few years for me to figure out, and obviously, taking baby steps on how to go about doing that.
Melinda Wittstock: And so you launched out onto your own in the middle of the pandemic. What was it about the pandemic that was the impetus that said, “Okay. Now’s the time.”
Tiffany Kent: Yeah. So what I realized working at a big investment management firm, or with any big company any of us have had that experience, is that big companies have their goals and their business that they need to manage. And sometimes that business is not really aligned with what you feel that you’re personally driven by. So when I sat on this journey five years ago, I realized that I had to take some certain steps to become a certified financial planner, I had to go back to school and get that credential. It takes a long time. And then I had to learn how to advise people. And so I went to a big investment management firm, learned how to advise folks with $5 million and up, it was mostly men. But then I also realized that I had a lot more, I felt really much better about myself and the advice I was giving to women who only had like $1 to $3 million.
And I felt really empowered and successful in that market area and with that audience, and yet my firm really wanted me to go for the bigger, expensive accounts because they need to support their expensive cost structure, of course, being a big firm. And so when COVID hit, and knowing that I had this dream five years ago of starting my own firm, I said to myself, “Why am I waiting? This is perfect. We can all work from home. I can continue to work with my women clients and I can grow a business to solely focused on this particular audience because I feel like I’m giving them great advice, and they feel really good about it.” Whereas the guys at the $5 to $10 million, they’re just looking for, “How can you improve my portfolio?” And looking more for investment returns. Whereas I felt like they don’t really need that from… I mean, there’s so many people that are trying to chase that particular market that I didn’t feel like I was impactful with those guys with the big bucks.
Melinda Wittstock: Yeah. It makes a lot of sense and it’s a growing market, particularly as more and more women go into business on their own and don’t necessarily know how to lay the groundwork or the foundation for their own wealth. And so I put my hat on as a serial entrepreneur and all the other women I know and I have mentored, collaborate with, or whatever, in many entrepreneurial communities. And almost everyone puts themselves last in the equation. We’re so focused on building the asset of our own business that we sometimes forget about ourselves.
Tiffany Kent: Right. Now, that’s exactly true. And so what happened over a year ago, I teamed up with a trusts and estates lawyer, a really good friend of mine, and we started creating this presentation completely separate from Bernstein having their big marketing materials that was solely focused on how to prepare women for prosperity. Whether you are a business owner, or a divorcee, women put their personal finances the last on their list, or they don’t even think about it. And so what we noticed, this woman who is the trusts and estates lawyer and myself, is that women, they’re not part of the conversation even if they have an advisor. It’s usually the guy that’s dealing with their family’s investments or financial plan, and the woman is often not there.
I also found that even successful women business owners still let their husbands manage their money for their business. And it was this odd thing where I guess in one situation that I’m very familiar with, the guy felt like that was the way that he could control his wife and it was her business. And like, “Wait, that’s not right. You need to have information to numbers so that you know your financial not only for your business, but also for your family and for yourself.” So yeah, women… And it’s not only that. Not only do women put themselves last when it comes to managing the business, their families, but they also just don’t know where to start. Investing and financial planning is pretty complex. And it kind of feels like a lot of times the guy’s world, right?
And I knew that I was kind of in a unique position because I’d grown up in this man’s world of being an investment manager and being a financial planner, and I realized that women need women to work with them to help them navigate and not speak this very intimidating investment language that makes them feel like they don’t know what they’re doing, which we shouldn’t be using words and talking about investing in a way that intimidates women. No one is winning in that game.
Melinda Wittstock: Well, there’s a couple things that are happening with women, though, too. Like we tend to be perfectionists. So make the mistake of, “Okay. I’m not going to reach out and ask for help until I’ve perfected it myself, right?” Which means that a lot of women aren’t getting the financial, or tax planning, or any of this sort of advice early enough in their businesses. And so at the startup stage where you’re laying all these foundations, it’s very, very easy to be focused on just that startup scramble of like, who your first customers? What’s your product market fit? What’s your marketing? All those things are so all consuming that it’s very easy to forget to lay those foundations, and you may not have enough cash to go hire someone. So it just kind of deprioritizes, I think, in a lot of women’s minds in the entrepreneurial community, combined with the fact that they don’t actually want anyone to look at their finances because they’re not perfect.
Tiffany Kent: Yeah. It’s almost like not that they’re not perfect, they are like, “Oh my gosh, I have to get on the scale to see how much I weigh.” Don’t want to do that, right? Like you don’t want to open up some dark hole of not knowing what’s going on. And then you feel really intimidated by showing your financials maybe to some guy, and the guy is like, “Oh my gosh, what are you doing?” And that’s not a great way to empower somebody to get involved with their own money and finances.
Melinda Wittstock: Yeah. So there’s so many decisions, say that a founder can make in terms of the way they structured their deal with their own company, are they taking a draw from their business? Or are they on payroll? What’s their equity position in their own business? How do they cash flow it? There’s so many aspects. Let’s break this down. Let’s start first, I’d love to be able to go through the different phases of business growth from that startup phase in terms of what kind of foundation you need to lay right the way through to, say you find yourself, you got a million dollar business, a $3 million business, a $10 million business and what you should be doing. So let’s start at that startup phase where so many women have launched businesses this year, just like yourself. What is the first and most important thing you have to do to make sure you’re not left behind in that equation as you grow your company?
Tiffany Kent: Yeah. It could be really very, very simple. And essentially, you don’t go into business unless you have a strong mission statement. Obviously, your whole point of your business is that you’ve always led your life with a strong mission. So that obviously still holds true for when you start a business. But I’ll just take a step back for a second. A lot of guys that I work with on the investment side or on the business side, they don’t really start with the mission. They start with a financial model. They think about constantly what’s their return on investment. So it’s a very different approach. That’s what I love about women and women business owners, and they start with a mission that they want to have impact on people, help people, serve people. So that is obviously still the case. That’s already been probably figured out if you’re going to go out and risk starting a business.
The second thing, obviously, is just develop a financial plan. That sounds really pretty simple. And some people don’t know really how to start it, but it’s basically starting creating an income statement and a balance sheet. And there’s a lot of business advisors that can help you with that. But there’s also a lot of tools you can find online, or you can easily go to my website and pull one off. Obviously, a financial plan helps you see what kind of money you’re going to invest in the business, that’s your capital you’re putting into the business itself. And then how are you thinking about all the different components of investing that capital into the business, of course, for revenue?
Melinda Wittstock: Yeah. It’s important to know your number. I think a lot of people, you forget this one simple thing is how much money do you want to make as a result of your business, right? And what’s that intention? And so to be able to net that out over time, then you have to go backwards and just, “Okay. So how many clients do I have at what price to be able to allow me to hit that goal? And then of the money that I’m making in it or the capital the business is generating or the revenue, how much of that’s going to be reinvested to grow the business?” I mean, some of these really basic business things get missed at this early stage.
Tiffany Kent: Right. And so there’s the difference between the mission, but there’s also the financial goals that you want to hit, which are obviously interlinked. But then, to what extent once you start developing, once you have the cash flow and the profitability, how do you want to then think about the next stage of how to grow your business and not pay yourself? One of the best ways to really think about little baby steps too in laying the foundation of any business that once you do get that cash flow. And it depends on whether you’re married and you have some, let’s say, financial support in terms of maybe your partner taking care of more of your lifestyle expenses, or whether you have to fund those lifestyle expenses from your business, that’s a whole other discussion in terms of understanding that financial model. But at the end of the day, the most simple thing you can do to really strongly lay a great foundation once you get that cash flow is to figure out a retirement plan.
Because not only are you investing for your future version of yourself, and such that you have money that you can invest for your future, but also that there’s a huge tax savings benefit from that. It’s one of the best, I want to say return on investments you can make once you start generating cash flow.
Melinda Wittstock: So there’s a lot of ways to go about this but say for instance, you start a business and you just put yourself on payroll. You’re maybe paying higher taxes than you need to, when a lot of your expenses can be tax write offs right from the get go. When you kind of look at your life and you think, “Okay. What’s actually a business expense? What can expensed to reduce that tax burden?”
Tiffany Kent: Exactly. Just going through QuickBooks, myself recently, I realized, “Oh my gosh, I get to write off the expense of my home office, and I get to run my health care expenses through the business.” There’s little things like that that can help you-
Melinda Wittstock: And personal training and development. I mean, one of the things that women really do need to do to succeed in business is invest in themselves. I mean, you talked about going back and getting trained, all those things become assets for the business. And these are all tax write offs. And obviously, if you’re hiring people, that’s an expense. There’s a whole series of things that you can do, but without that knowledge from the get go, you can make some pretty expensive mistakes right out of the gate.
Tiffany Kent: Exactly. And sometimes it’s like you’re trying to do too much all at once that you’re kind of forgetting to extend some of those items through your income statement. And there can be a huge… To what you said, lowering your taxable income by running these really important expenses through the business.
Melinda Wittstock: Yeah. One of the mistakes that women make very early on in a business is not hiring fast enough. And in fact, there’s some statistics on this, that women tend to look at hiring as an expense rather than an investment. So if you hire people and they’re tied to specific objectives, and tied to your revenue, the results that you’re bringing in, if you hire someone and they’re going to increase your revenue, my goodness, that’s tremendous leverage. It’s going to help you grow your business faster. It’s an investment, not an expense. And I think one of the real psychological differences between men and women is a look. Men tend to see the leverage points more clearly or more easily than women, whereas women tend to… And this isn’t the case obviously for everybody, but overall, there is a pattern on this. Where it’s kind of like, “Oh, my goodness. I can’t afford to hire that person because of the expense.” Whereas an actual fact, that person is an investment that’s going to help you grow your business faster. How does that conversation go for you and your clients where you’re basically teaching them about leverage?
Tiffany Kent: Yeah. So that is a great topic because it really comes down to math really, right? So does hiring somebody at certain amount of dollars per hour free up your time that you can be a greater impact? Let’s say the value of your time is $100 an hour, whether it’s bringing a new client, whether it’s creating a marketing strategy versus paying someone, let’s say, $40 an hour to help execute on social media plans. Well, that difference is tremendous, that instead of you spending your expensive, valuable time doing a job that can be done for $40 an hour, you’re able to create much more leverage in your business by doing higher value added activities with your time. And it’s a theoretical exercise, but it’s one that makes the most sense to figure out how you can grow and get more… If you’re the main person who can generate the most revenue in your business, then you should outsource everything else that doesn’t directly tie to generating revenue for your business.
Melinda Wittstock: Yeah. Very, very important. So say, for instance, a woman has gotten to the point now in her business where she’s got consistent six figure revenue, say at the $500,000 mark, getting to that point and is looking for ways to scale, get beyond that. At around that 500,000 to a million dollars in revenue, what should she be doing? What kind of systems and processes, financial instruments? What should that business look like to make sure that she is generating wealth for herself in that business?
Tiffany Kent: So I have a good friend here who has a pretty sizable business, and she knows every single number but she doesn’t know what her cash flow is. It’s so funny. She knows all the numbers that comes to expenses, but she doesn’t have a financial model to help her understand what’s her net income on a quarterly basis, on a monthly basis. And so on one hand, a financial model can help you see the opportunities of where either to invest more in the business or to see how you can sometimes maybe cut costs, for example. So this is somebody who doesn’t have the financial model that I think that she should at this business. It’s kind of a hard example. I mean, it’s an example with someone who has $8 million in revenue, but it’s a baking company. And she’s got 12 stores and one of the stores, it’s cash flow positive but it’s the lowest performing store, let’s say, of the enterprise.
So does it make sense for her to continue that? Well, no, because it’s draining resort management, and her resources, and time, and energy. Even though it’s cash flow positive, it’s just diluting her ability to grow and stay, and maybe think about a different location that’ll be much more profitable on a per unit basis.
Melinda Wittstock: Yeah, the numbers always know the story. If you don’t know your numbers, you’re kind of lost, right? Because you don’t know where the opportunities are, you don’t know what to say no to, what to double down on. I mean, this is the biggest kind of consistent thing. When you’re getting to the point, though, where you have a choice as an entrepreneur, I mean, you can double down on creating this assets, say for instance, you’re creating a business like I am that will ultimately be sold, you’re right, it’ll be a big acquisition, right? So at that point, you’re really focused on really growing the valuation of the business. And you have this thing where you’re thinking about your own wealth building, but also you’re creating an asset. Everything you’re doing is that you’re going to make a pretty big nest egg at that acquisition. So what are the steps you take? I’m talking about the context of a high growth technology company, highly scalable company, or anything really that can be sold? And you’re really focused on that valuation growth number, right?
What are some of the things you should be doing there? Because sometimes it can be kind of a trade off or a tussle, right? Because it’s so easy to say, “Okay. Well, I’m going to shortchange myself because I’m growing this big asset. And so how do you balance risk in that-
Tiffany Kent: Yeah. So I get a little bit of sense of where you’re going with this question. So if you’re talking about if your dream is to exit the business and to sell it for a certain valuation. And how Wall Street thinks about that or how the venture community thinks about the values in businesses is that it’s no longer the traditional metrics that we used to focus on, it’s no longer about cash flow. And high growth technology oriented businesses is all about how fast is your top line growing. So to that point then, unfortunately, you have to basically forego profit and continually to invest your cash flow to keep that top line growing as rapidly as possible for as long as you can. And then forego any kind of salary that will be nice to have at that point in your business and to invest more and more in the business as much as you can.
Melinda Wittstock: Yeah, so I’ve seen so many women go that path, though, but then end up getting diluted down so much that comes to exit and they don’t really get the nest egg that they thought. So how to protect yourself in that case so that not only-
Tiffany Kent: This is I think one of the biggest issues and problems that we have. We were talking before a little bit about the podcast that women have a hard time getting access to capital in venture community. And so there is a very successful entrepreneur here in Atlanta where I live who started a business and sold it to Salesforce. David Cummings. I’m sorry. PS, David Cummings. I hadn’t thought about his name for so long because I haven’t seen him for over a year. He is a strong proponent of not accepting any venture capital funding because the venture capitalists are taking big risks in investing in your business and they’re going to try and extract every last dollar for themselves. So his mantra is all about focus on a business that generates most cash flow as much as possible.
So the point is what I’m trying to say is that your business and businesses like yours generate a lot of cash and can support your own reinvestment without having to, let’s say, raise capital from venture capitalists, which is great because then you’re not deluding yourself with the capital raise.
Melinda Wittstock: No. Venture capital is trying to take money out at the exit
Tiffany Kent: Although there is really some really bad businesses out there that were never able to exit and so VC are selling to themselves other businesses. But anyway, that’s beside the point. So depends on whether you’re starting with the fact that you have venture capital, or you’re starting with the fact that you don’t have venture capital. So there’s two different paths. And it sounds like… I mean, from what I understand, you’d mentioned that only 2% of women in business are getting venture capital, which I think is unfortunate but it’s not necessary. The goal is to have venture funding when you start. If anything, it’s better to go with friends and family and angels who really believe in you, who know your story, who know your background. Venture capital would be incredible amount of work.
Melinda Wittstock: That’s way to start, but the time to take venture capital is if your business is already growing very, very fast and you want to go seize a market, you want to put gas on existing success, right? Because then you avoid that dilution. So honestly, it’s a timing issue about where you take that money and why you need it. But assuming that you do have investment, even from friends, family, and the angels, they also want that exit. And so how do you protect yourself, right? What are the systems and things you put in place so you’re building your own kind of nest egg in the business irrespective of exit? Assuming success, you’ll get a bump and a check at exit, but you still have to sustain yourself through that process. And so that’s kind of where I’m going with this. I mean, how do you lay the groundwork to make that possible?
Tiffany Kent: Yeah. This is going into a kind of a different discussion altogether. But I want to go down this route because what I’ve seen in my investment world is that when guys work with other guys when it comes to venture capital, they’re much more aggressive in their valuation of their business. Whereas women are way too conservative. So if you’re going in there with a very conservative financial model, the venture capital is going to cut that thing in half anyway so you might just start big and let them just cut it. And so you’re already kind of doomed at the beginning because we’re so focused everywhere, we’re so risk averse, we don’t want anyone to lose money, whatever. But the thing is is that that’s not how things work. You have to go big, or you’re going to get screwed by not getting enough valuation that you can protect yourself, if that makes sense.
Melinda Wittstock: Mm-hmm (affirmative). Right.
Tiffany Kent: Here’s a great example. So when I was a portfolio manager, here I am in New York, Wall Street, the firm I worked for, we managed $3 billion. And there are seven other analysts guys and myself. And I had done really well there. I’d been there for two or three years. But one of the best and biggest lessons I ever learned was that, I went on maternity leave for just seven weeks, came back to the office and out of the $3 billion fund… I might have had maybe $50 to $100 million of investments that I managed and I controlled but I had to pitch my boss to buy certain stocks. Otherwise he would never take my advice.
So I come back from maternity leave and this analyst that I shared an office with, he was the most arrogant, cocky person I’ve ever met my entire life. Rich privileged from Beverly Hills, went to the best private school in LA, which is Harvard Westlake, went to Wharton, and he was arrogant. And so when I came back from maternity, out of the $3 billion hedge fund, he had $1 billion that my portfolio manager had invested in his names, meaning if we owned 100 stocks, he had about 30 stocks that my boss invested in and that amount equate to a billion dollars. So I come back and I’m kind of pissed. I’m like, “Oh my gosh, what am I doing wrong? Why aren’t my positions bigger? Or why isn’t he buying more Freeport-McMoRan? Why is he not buying more stocks, my positions?” You know what I did? I sat there and I copied his aggressive approach and style with my boss that he did. And I copied it pretty well. And my boss made really big positions in my stock recommendations as a result of me mimicking almost his aggressive style.
And at the end of the day, I had the best year and I made a lot of money that year. And I have to think that this guy that I sat next to really kind of showed me how to do it indirectly. And by the way, he was so arrogant and aggressive that he actually got fired a year later, but I was just so thankful that I got to experience his style, right? So I think that what is unfortunate is that women don’t have enough examples of other women being really aggressive and getting big valuations or seeing that experience of how she pitches to VCs as a way to get the guy to really invest big in her business. Or maybe it takes coaching, but-
Melinda Wittstock: Well, sometimes we just simply don’t value ourselves deep down enough, right? Because there’s a psychological dimension to this as well. And also, just like you say, they’re not enough role models of women just having the confidence to swing for the fences in these sorts of things. And so I see this where women ask for less money than they actually need. And say, if you ask for a million dollars from an angel or a VC, that’s not a big enough opportunity for them. I mean, because the million dollars isn’t going to grow the business to the place where it makes it worth their while. Whereas if you’re raising five million, or 10 million, or something like that, right? And you’re right too, about that they do just cut your projections back. So men tend to be a lot more confident about that than women. So it’s partly a psychological thing, it’s partly a training thing, it’s partly a mentoring thing to really position yourself and believe in yourself that you can play those sorts of numbers.
But I think sometimes we go into it with an attitude that we’re creating a small business rather than we’re creating a really fast growing big business, right? And honestly, the effort is the same. No matter what size business you’re creating, you’re doing the same things, right? So you might as well-
Tiffany Kent: Right. Exactly. Go big.
Melinda Wittstock: … depending on what your model actually is, right? And what you actually want in your life and the kind of lifestyle you want. All those things obviously factor into it as well. What I’m curious about though, is you work with a lot of women who have high net worth. So we are talking about a million three million more, what holds them back from investing, and in particular investing in, say other women-owned startups? Is there an issue there where women aren’t investing enough in other women?
Tiffany Kent: Yeah. So let me back up and address one other thing and then I can get to your question. The other thing that I find really fascinating when it comes to women and pitching their businesses with venture capital is that… And I relate this experience because I deal with women and I deal with men. And I have a completely different conversation with women than I do with men when it comes to investing. And so I think there’s some millions there.
Melinda Wittstock: Yeah, break that down. Break that down. I’m fascinated in that, what the differences are in the conversation.
Tiffany Kent: So when I deal with women clients, at the end of the day they just want to make sure they don’t run out of money, and they’re going to be okay in the future. One of our biggest fears is that we’re going to end up poor, broke, and alone one day, right? And on the other hand, guys don’t worry about that. They want to hear about the investment thesis, they want to hear about the risk reward, they want to hear the story. So when I deal with men, I’m constantly focused on more of my investment thesis on how the portfolio should perform, and what are the themes that they’re investing in. With women, they don’t really care about the portfolio, they just want to make sure they’re okay. And so to get them to feel like they’re going to be okay, we have to focus on getting into the financial model and making sure they understand, they are familiar with the numbers, going back to our earlier point. And so they’re more sensitive to how they’re spending, how their income and what they’re saving. And then I project that out in a modeling exercise that helps them get more comfortable with seeing their financial future.
So at the end of the day, guys kind of feel like they aren’t so worried about running out of money, they want to swing for the fences even though that might mean… I mean, obviously they understand the relationship, I think better between risk and reward, the probability of being successful, whereas women… Well, I wrote this in my book, we have this loss aversion, this psychological theory as loss aversion. What this means is that emotionally, we are more impacted by experiencing losses two times greater than financial gain or reward. So that means you rather not lose money to make money. And that’s not how a lot of guys think. So there’s this conundrum, right? How do you get women more comfortable with taking risk? Investing, right? So if they themselves feel that way, how are they ever going to get comfortable with investing another woman’s business?
So how guys look at business is they start with the numbers, they get the story, they understand the risk reward, they understand the financial gain, the probability of loss, and they can decide whether they want to move on with that investment. That is a decision. It’s a big decision, right? It’s requires research, it requires analysis. That decision then if you apply that to a woman, she is just more worried about losing capital than she is about making capital. So she doesn’t want to embark on that whole decision-making process unless she’s already been through it herself. She’s already create a business and sold it. And then she’s, “Okay. I’m familiar. I know what this is about, I understand the risk reward because I’ve experienced it. Now I can get more comfortable with investing.” So I feel that women can only invest in other women’s businesses that they’ve experienced all those emotional experiences of big wins and big losses and how to assess the risk associated with both of those aspects.
Melinda Wittstock: Right. Right. Right. So I mean, this is an interesting thing because psychologically going back to that earlier question of women investing in, say other women, I’ve noticed a lot of really high net worth women, say in New York, who have no problem writing a massive check to a charity, but ask them to invest in a startup or even a company that has product market fit, has growing revenue, has like decent margins, whatever but is early stage, and is maybe even addressing the exact same social need that the charity is, and that’s too risky. I’ve seen this over and over and over again in my entrepreneurial career, it’s a conundrum to me because on one hand, writing the check to the charity, okay, so you get the nice tax write off, but writing a check to a business, you have the upside potential of that investment five X, 10 X in that investment. And if it goes wrong, you still have the tax write off, right?
Tiffany Kent: Sure.
Melinda Wittstock: Right?
Tiffany Kent: Yeah. You do.
Melinda Wittstock: But there’s this real psychological block, and I don’t really understand it. What’s at the root of that?
Tiffany Kent: Yeah. Like with anything, why we buy is because there’s an emotional feeling to it, right? So the charity is giving a very specific example of a need that’s out there, and everyone’s heart goes out to that particular situation that the charity’s mission is trying to solve. And charities, by the way, are fantastic at raising money. They’ve got that down to it’s science. Most business owners are not that great at raising money. They are and they aren’t. That’s not their main focus. The really good ones are able to lead with the emotional appeal of how this business is socially going to impact and improve society for whatever reason. I think that that is what may be missing when it comes to women raising money for their businesses. They’ve got to think that they’re almost like a charity, and really appealing to that emotional side of their investor so that they can align themselves, the investor, with the business itself so they can feel more comfortable investing.
Melinda Wittstock: Right. As we start to wrap up, I want to make sure everybody knows about your book. You have a book out. Tell us about that.
Tiffany Kent: Yeah. So I wrote a book called Investing for the Smarter Sex: Wealth Building Tips and Secrets Sophisticated Women Know (But Wall Street Won’t Tell You). My business is that, as I said, women need to make sure that they’re going to be financially okay. So my book walks you through all the steps you need to do to do that. To create your own financial plan, to invest your own portfolio, you don’t need Wall Street. And I share some secrets in there of what Wall Street does that cost you a lot of money that you can do so yourself. But as we all know, we have very limited time to do all this ourselves. But the book is there really to educate. If you’re interested in really learning the ins and outs on how to be your own personal portfolio manager, financial planner, the book is there for you.
But I also know that this stuff is very boring. I mean, it’s not boring but I’m just saying if you don’t know where to start, and you’ve never done this, how do you get someone engaged in their own personal finances and investing? So I made the book a lot more conversational. It start with personal stories and other women’s stories to make it more interesting. And so that the stories help, I hope, motivate the reader to get through the 150 page that there is in the book. But it’s called, as I said, Investing for the Smarter Sex. And my firm is called Wealth Engagement. My name is Tiffany Kent and that’s the best way to really reach me.
Melinda Wittstock: That’s great, Tiffany. I will make sure that all that is in the show notes and everything so people can find you and work with you. I want to thank you so much for putting on your wings and flying with us today.
Tiffany Kent: Melinda, thank you so much for having me. This has been just great conversation and experience. This conversation’s a lot more interesting to me because the other ones I’ve had are of a more big picture. This one was really granular. And so I really appreciate the opportunity to get into the details in the weeds.
Melinda Wittstock: Awesome. Well, it’s a big, big topic for women, and one where there’s a lot more education needed and just confidence building and mentoring. And I think the more that we get all this stuff out in the open, the better. So thank you again.
Tiffany Kent: Exactly. Great. Thank you.
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