Saving Money Socially Responsibly, The Easy Way - Expert Edition Episode 37 (Classic Episode)

In our throwback episode today with certified financial planner Marie Thomasson, we delve into the concept of socially responsible investing, specifically focusing on how to practically implement it. We discuss the intricacies of impact investing and explore the example of Aspiration Bank as an option for socially conscious savers. Marie Thomasson highlights both the benefits and limitations of using Aspiration Bank, emphasizing its ease of use, feel-good interface, and compatibility with an environmentally conscious mindset, with clarification on Aspiration's structure as a savings account versus an investment account, leading to a broader conversation about the trade-offs involved in sustainable investing. We also intend to discuss more challenging yet impactful options for socially responsible investing in future episodes.

About Our Guest:
Marie Thomasson, CFP® is a financial advisor for progressive women. Marie started her journey with a prestigious internship in asset management after studying Applied Mathematics at UCLA. It turned into 13 long years, overseeing over six billion dollars in bonds for pension funds, institutions, and banks. The experience left her with a deep skillset, and a deeper longing to be free of an industry saturated in privilege, misogyny, and self-interest.
https://modernassetsla.com/

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TRANSCRIPT:

[00:00:00] Naseema McElroy: All right, nurses on fire. We are back with another episode with our certified financial planner, Marie Thomasson. And last week we learned about the history of socially responsible investing, how that now is termed impact investing and so now we're gonna dig into the how. Okay, so now we know these things. We know that it's our moral imperative to invest in these socks, but like, how do we do that? What does that look like? In real life, like in practice, what does that look like?

[00:00:34] Marie Thomasson: Alright, so this is where we get into the meaty parts because just like Instagram, Graham, and Blogger, right?

Everything is new. So you have to keep this in mind. This is why it's hard and this is why it's so in actionable sometimes because there's a lot of there's a lot of financial advisors or banks and whatnot that don't even. Offer these things you have to go out and search for it. So I am doing the heavy lifting for you And I am so happy to be doing this so we appreciate you for doing.

Yes, you are gonna know and what I would say is Listen to all the episodes and listen to the pros and cons, listen to all the options and I'll be providing I'll be providing PDFs of all of this information for your listeners to make an informed decision so they can say, you know what, I'm going to do this now, but I'm going to put this on the list for next year.

And that is a okay, like nothing wrong with that. That's how we do everything in life. You got to start somewhere. So, we're going to go through three different buckets. Spend, save, and invest. And then we're going to go through, within each one, each category, we're going to do easy, medium, hard. So, we're going to start out with a save.

Everybody saves money. You gotta save it somewhere. Please don't put it under your mattress. It's a really bad idea. And so, so the example for today, and Asimu, we've already talked about this a little bit. It's Aspiration Bank, because you've got them listed on your website. So they are, they're going to be the safe and the easy.

So aspiration bank is the bank that is, it's like the feel good bank, right? You pay what you can. And they're. They have this thing called AIM, I think. Let me look it up. Aspiration Impact Measurement.

So, you can bank with them, you pay what you want, which is a great marketing tactic, I will add, because everybody goes to the middle. But what they do on the banking side that's unique is they will tell you of what you spend how good it is, like, where is your money going? And it's almost like the really easy way of doing impact investing.

In our lifetime, we're going to spend way more money than we save. Certainly when we're younger you spend a whole lot of money. When you're young, you invest just a little, and then when you're older, you flip that equation, right? Like you're investing less and less as you draw that money down.

So if one of the biggest tools we have is how we spend, then aspiration banks is a great job of helping you recognize. And maybe just like that little like reminder on your head, like okay, that wasn't so cool. Like, why are you buying shit at Walmart or Amazon? So there's some catches though. And this is what makes aspiration easy.

So aspiration Is easy because they've got like a slick tech interface. They don't have actual like locations. It's all done online But it's really easy to sign up for an account Aspiration is not actually a bank So aspiration partners with banks and I did a little bit of research for you They do not partner with any credit unions.

They're part. They're partnering with actual banks like for profit banks so the money that you're putting into aspiration, it's not necessarily going to anywhere to, to help the collective good necessarily, aside from like the bank, right? So, that's like a little bit of a negative, but it's still not B of A, it's not Wells Fargo, it's not Chase.

So, already. That's like a low, really low hurdle to jump just to you basically just have to shuffle, do the Trump shuffle and you can like, just not using one of those big three banks is good enough. And they have access to ESG investments. So again, this is like the baseline.

Aspiration is actually an RIA, a registered investment advisor. That's the hook is the banking. And what they really want is they want your investment money. And so they've got this do good, feel good philosophy. And what they're trying to do truly is because what's very sticky is investment assets.

And so they want you to come over to their investment arm and invest in their ESG funds, which by the way are managed by UBS. So yet another like it's not the same as the banks that are doing the actual, savings, banking the primary bank is called I've got it here coastal community bank.

It's not a credit union. It is a smaller bank So in that sense, it's good Like at least it's a small business in the united states is defined as a company with less than 500 individuals Which I believe coastal community bank is so you it's far better than the alternative. But.

The one big problem that I have with Aspiration Bank is, and it's all on Wikipedia, is if you look at their list of investors as far as I can see, there's only one, one, kind of impact minded investor. The rest of them are your basic private equity, bottom dollar.

So what does that say when you've got a bunch of investors who are profit over people investing in a bank? That's all about, supposedly people over profit. So this is where you get into the nuances, right? So how much of this were you aware of?

[00:06:33] Naseema McElroy: Zero. . Yeah. Zero. I mean, nothing. This is the whole thing.

So this like for my audience, like whenever you're learning, chances are I'm learning too. This is like something where we're constantly growing in our knowledge base and for me, like the whole time I'm thinking about this, The way I look at a bank, it's a safe place to keep my money, right?

And then I don't look too much further into it. I know that I would never open an IRA at a bank. And I know that there's high yield savings accounts where I can get better returns on my bank. But a lot of times we don't look at the back end of the bank and stuff. I know that Bank of America is horrible.

Citibank is horrible, but yeah, I know that these banks are horrible, but it's on the side of the fees that they charge and discriminatory lending practices and things like this, but how they use your money is something we rarely ever think about. And it's something that I Don't have the where I've never had the wherewithal to think about.

And so thank you again for opening my eyes to this stuff because this is where we need to put our heads. This is what we need to focus on because these are very important topics.

[00:07:44] Marie Thomasson: Yeah. So, I mean, it is a for profit, institution and there is nothing wrong with that. It's just, Go into it with your eyes open that they're doing a little bit less good than you realize.

So, it's slick. It's easy to set up. The tech is there. It's better than the, mass alternatives, but. But there's some issues with it where, you know, and we'll get into it next week. And the week after there's things that you can do that are way more impactful with your money.

So your money in this case is not going to to be lent out you. Low income housing or, whatever it is it's just not everything is done on the bottom dollar. That's what they care about. And so I think considering that you can get an ASG portfolio almost anywhere that, unless you really need it to be easy and for some people you do.

No shame there, right? If you need it easy, otherwise I'm not going to do it then by all means, do that. That's already a huge step in the right direction. Do you use Aspiration for their ESG funds? I don't use

[00:08:59] Naseema McElroy: them at all. I'm really, honestly, just learning more about them now.

I think that, I think my affiliate manager just added them on and didn't tell me anything about them. Cause I'm just like, I didn't even know I had this relationship with this bank. So I'm going to have to look more into it. Cause I'm like looking into it, I'm like.

[00:09:23] Marie Thomasson: I that is so funny. See, that's the thing though.

And I think that's really, that's a topic that's worth talking about because so many things we do, like you've got people helping you, like they're trying to do good. And then people go to your website, and they look at it, and they're like, yeah, great Nassim is doing it, must be great, supporting it, yeah and so, that's that, that can work, it goes both ways it can do a lot of good, it can do a lot of bad And so, in an age of fake news or supposed fake news actually reading the sources is a huge thing even I don't who's got time for that?

I go through Reddit, and I read the comments, and I read the, the headline, and then somebody somewhere will be like, did you even read it? They'll be like, ah, there's a paywall, there's no time. And so, we're in a society where there's so much information and that it's really hard.

It's not that hard. It just takes time to actually

[00:10:34] Naseema McElroy: take time. And yeah, it's like when you're on your phone, you're scrolling and you're like spinning 0. 5 seconds on something to think about. And a lot of times we make our decisions off of that.

[00:10:43] Marie Thomasson: So, yeah, exactly. So, not a bad not a bad place to start.

I will always support anybody, the one thing I will say about using something like aspiration is that because aspiration is not actually the bank, it's basically a third party bank. I did do a deeper dive into this a few years ago, so I don't know where they're at now, but a lot of people were complaining because what happens when you have a third party, things fall through the cracks and people weren't getting their cards. So there have been complaints primarily. There was a lot on Reddit, which is where I go for a lot of my information. But and even other places too. So, if you want a bank, get a bank. And even for myself, I hate to say it, but for my business, I use chase because I know, it's sometimes because it.

It syncs up with QuickBooks, and it's really easy. Everybody has Chase QuickPay to be able to pay vendors. I know that I can send a wire out if I need to. Transfers are easy. One time I tried setting up an account with U. S. Bank, and they only let me make withdrawals of 1, 000 at a time, and then it's like a 3 fee, and I'm like, I'll see.

No wonder. Like, why are you making this so hard?

All right. So, like I said, I use Chase for my business banking, it's reliable. I know it's going to work. I know they're not going to lose my money in transit somewhere. And so, if you got to do business you got to do business. And so that's where you have to take take a targeted approach to where are you going to put your effort?

So, When it comes to your savings, you don't want to mess that up, right? Or just even your checking you don't want to have to worry if it's a worry for you that, balancing your checking account or something's going to bounce, you've got to do what works for you. And so with that, I mean, I know I started out really rosy with Aspiration and then I went down the rabbit hole.

Aspiration really excels where some of these other options that we're going to talk about in later weeks fail because their tech, it just makes it easy and you can feel good about your banking, you're still doing something good, but you're not jumping through all the hoops to do it. And I think that's the biggest takeaway is that they've got the tech, they've got the interface that makes it easy and it is 100% better than the alternative that most of us go to.

So I'm not going to sit here and say move everything to aspiration but they have, they have a place and if that's where you're at by all means. Go for aspiration. It's FDIC insured. I believe up to 2, 000, 000. So they do this fancy thing because FDIC insurance is not 2, 000, 000.

It's 250, 000. Yeah. Yeah. So back in 08, 09, believe it or not. I worked in institutional asset management. And so, and I actually worked in mortgage backed securities. And so I worked with all of those, or for all of those millionaire portfolio managers, billionaire guys. And they're literally running out of the office to go to the bank to take 250 out, to put it in another bank account because they were worried about banks failing.

Because there was a hot minute there where it was a real mess. And so now what's been devised, this isn't it's an option for people who are much more high net worth because you got to have 250, 000 or more to even be worried about it. About FDIC insurance is there's companies that will go and like basically split up the 250, 000 for you or like your money.

Into 250, 000 chunks and place it at different banks to make sure you get your FDIC insurance. So totally off topic. That's for the really high net worth savers, if you're saving 2 million we need to talk because Yeah, exactly.

[00:14:45] Naseema McElroy: I'm like I was thinking about that. I'm just like, who has 200 million?

I mean, 2 million just sitting in a bank account.

[00:14:51] Marie Thomasson: I know. I know. So that should not be happening. Anyways, for 99. 5% of the American population. So if you're doing that, then there's already a big problem because you're everything's going to get eaten away. But,

[00:15:08] Naseema McElroy: Marie, I did have a question because this is along those lines.

So aspiration bank I'm still confused on. What they do because I'm looking at their website where you're talking. I'm just like, sorry Is it a savings account or is it an investment account? What exactly right? Is it like it's huh? And why am I paying these fees and what bank is it in?

Like even just looking at the looking at their website, even though the interface online looks really nice I'm still confused. So are you so were you talking about were you talking about it as a savings account that Yes. Okay. So as a savings account, like an alternative to putting your savings account in a bank.

Okay. Okay. That's what I thought. But then I got confused by the website. So I was just like, what? Yeah.

[00:15:54] Marie Thomasson: And this is because it's an investment firm who is, trying to look like a bank, but they're not. So

[00:16:02] Naseema McElroy: they're, so they're like. goal is to their role is to act like a high yield, a higher yield saving.

So an alternative to just putting your money into a standard bank account.

[00:16:12] Marie Thomasson: Their goal is to act like a feel good account. Gotcha. Gotcha. Gotcha. Okay. Their goal is to get the socially conscious investor and saver. And consumer that's so and that's also the goal, of all those people who've, made investments in the company.

So they're going for a very particular market, basically millennials, Gen Z, people with money who actually give a shit and and it's working and it's just fine as a, savings account when not you can totally invest with them. But it is confusing because they are confusing.

They have a confusing structure. Like it's not aspiration bank. It's coastal community bank. I have to keep looking at the page, right? And they've got all these banking partners and then they've got aspiration investments. It's all over the place. But if you just want to sign up for a bank account and save your money and get their aspiration impact measurement that tells you if nothing else.

That you get a report telling you, or just like a reminder. That you spend X number of dollars at the gas station, and that's not the greatest place to be spending your money maybe to make you think twice. No,

[00:17:28] Naseema McElroy: it was cute. I was looking at it. It was like they take how much money you spend on gas and then What they give to like carbon neutral places Wow, that's interesting Yeah, it is very interesting.

It is very feel good y like, it's talking about Redwoods sustainability and all this kind of stuff, which is cool and which are things people are looking to support but I'm still

[00:17:59] Marie Thomasson: still confused.

[00:18:00] Naseema McElroy: What did I do? Yes.

[00:18:06] Marie Thomasson: I probably haven't helped the confusion by shedding a light on really what it is. This is again, when we came, if we come back to the subject of sustainable investing, this is why it's tricky. This is 100% why it's hard. There's pros and cons to everything. There's no if you want to be like super sustainable social justice oriented, then I don't know where in the world.

You can live and what company there's no such thing as a socially responsible company. I think it was the head of Patagonia. Who said that there is no responsible company because that's like. Not the purpose of a company. So, and I think that you have to get comfortable with that idea that there is no perfect solution.

And everything's going to have a trade off. And that's what we're talking about now there's these are the trade offs and it's up for you to decide what's more important to you right now is the ease of use. Is it feeling good about it? Is it just making at least a shift away from, Wells Fargo, who's awful?

And if so then that's fantastic. Start right there.

Aww.

That was a good nap.

[00:19:25] Naseema McElroy: That was a good nap.

[00:19:31] Marie Thomasson: Okay,

[00:19:36] Naseema McElroy: so for people who are looking for a place to save money. So this is episode is about places to save money in a socially responsible, impactful way. Aspiration. Bank is a good place to start.

[00:19:52] Marie Thomasson: Easy option. Yeah,

[00:19:54] Naseema McElroy: easy button. That's the easy

[00:19:55] Marie Thomasson: button. That's the easy button right there. Yep.

[00:19:58] Naseema McElroy: And so for next week's episode, we're going to talk about something a little bit more challenging, but maybe something that's actually

[00:20:07] Marie Thomasson: exactly.

Yeah, exactly. Yes,

[00:20:11] Naseema McElroy: okay. Anything else for me about this one?

[00:20:15] Marie Thomasson: Oh man, I could keep going, but my kids, I'm not sure they want me to.

[00:20:21] Naseema McElroy: No, I think this is a good start. I think this is a good place to transition to the next one. Okay. Yeah. I'm learning so much. I'm so excited. You just don't understand.

This is all such good information.

[00:20:34] Marie Thomasson: Yeah I'm honestly super excited too because I have these conversations one on one all the time. Being able to share this information, to me that's my, that's why I'm in financial services, right? It's my job to learn about this stuff and it's my moral imperative to share this information.

Yes,

[00:20:53] Naseema McElroy: yes. Yes,

[00:20:54] Marie Thomasson: yes. Yeah.

Hey there I’m Naseema

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