carolina’s story

The seeds for my work on Wall Street were planted when I was a mere twelve years old. I did not, of course, know it at the time.

On the Thursday morning of November 6th in 1969, my dad walked out of our Pennsylvania house and boarded the corporate Lear jet that was to take him, four other executives and two pilots to a business meeting in Wisconsin. Heavy fog covered the area and, upon an attempted landing, the pilot mistook Lake Michigan for the runway. The jet exploded on impact, leaving seven women widowed and twenty-one children orphaned in a split second. My life changed on a dime.

My mom was the tender age of forty. My brother was thirteen and my sister nine. As a young girl watching my mom single-handedly run the household that she never imagined, I didn’t grow up just reading about how women should handle money or listening to someone preach to me about how women should run their homes. I lived it.

I witnessed before my very own eyes the difficulty of a suddenly-single mom, who, brilliant as she was as a musician, wife and mother, was completely out-of-touch with the very real issues of running the money for our family. For Daddy had done all of that. And when he died, she didn’t even know where the checkbook was…let alone how much money was in it or how to effectively handle it.

What Color is Your Purse? is my book project written explicitly for women and ‘creatives.’ For along the way, a path which held more than its fair share of unexpected twists and turns, I developed the desire to empower those people who want to possess a healthy respect for money, yet who unabashedly confess to having little knowledge of how to handle and manage it. Having helped hundreds of people run money as a professional advisor, I met a wide variety of clients who were completely and utterly immobilized over money. By fear. By lack of knowledge. Or conviction. Clients who were devoid of any confidence on how to move life forward, particularly during and immediately following the Great Recession. “How can I protect myself from further downside?” “I’ve lost my job, my house and my spouse. Now what do I do?” Or from recently divorced women who cried: “I’ve never worked a day in my life and need to find some income. Where do I even start?” It was ‘Honey, I Shrunk the Portfolio! Now What Do We Do?’

Our twenty-plus years of prosperity were fertilized by the bliss that only a long-term bull market could bring; upward-pointing S&P charts became proof of our generation’s ‘entitlement.’ Let’s face it: when we were all happily making (lots of) money, we falsely believed that we didn’t really need to understand the composition of our 401(k) plans; we just wanted to enjoy the fruits of our labors. We thought we could dance to music that would never stop. But people became quickly disheartened because they lacked knowledge about how the capital markets worked. The Great Recession didn’t make them suddenly stupid. They just never took the time—or believed that they had to worry—about money management in the way that they do now. Financial journalists couldn’t scold them into a better place; their Financial Advisor couldn’t snap them into a better place; Wall Street’s Journal couldn’t articulate them into a better place.

I have observed that women see money differently than men do. Our gender influences how we see money. And study after study bears this out. I never assume that a woman is ignorant because she doesn’t know the technical differences between a mutual fund and an exchange traded fund, because I know that she can probably spot a Manolo Blahnik on a woman across the street and differentiate it from Prada. Women instinctively know how to differentiate. I also understand that a woman has an inherent desire to gleefully embrace her femininity, and that our gender moves us to make money decisions that are very different than those of our male counterparts. We desire to be beautiful, and our cash flow will reflect that whether our husbands or lovers like it or not. We understand that our heartstrings will always be stronger than our purse strings; it’s in our DNA to protect those whom we birthed and nurtured, after all.

Secondly, I have observed that inherent personality differences, as observed by Hippocrates 400 B.C., account for differences in the ways that women see money. Some women buy $5,000 Chanel handbags; others carry nylon backpacks. There’s more to this than gender; personality differences are at work here, too.

Thirdly, I believe that the role of behavioral finance in money management cannot be underestimated or ignored. This relatively new niche of psychology attempts to understand the role that behavior—not statistics and charts, or logic and reason—plays in the way we handle money. Behavioral finance takes into account life events such as the tragic one I experienced at age twelve, for it understands that I will likely react to money with deeply-ingrained memories of how my forever-altered mother handled it, which will be completely different than the way another woman might had she never experienced loss at an early age.

In What Color is Your Purse? I take an innovative, creative approach to money management. I explore–and apply–the intersection of money and three integral determinants: gender, personality and psychology. My approach creatively communicates the language of Wall Street so that women and creatives understand money. I use my artistic sensibilities, combined with my business background, to creatively communicate lessons in money management so that every reader learns how to earn it, spend it, save it, invest it, and give it away.

 

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