Alexa von Tobel, CFP and Founder/CEO of LearnVest.com, talks to Ladders about job security, financial planning and career advice.
You took a leave of absence from Harvard Business School in 2008 to launch LearnVest. What led you to create this organization? What is their mission?
When I was graduating from college and headed to a job on Wall Street, I realized I didn’t have a solid grasp on my own personal finances. I had never learned exactly how to build my credit score or what the difference was between a Roth and Traditional IRA. I couldn’t find a resource that spoke directly to me, so I decided to build one. When the financial crisis hit in the fall of 2008, I knew that smart financial advice was more important than ever before—so, I took a leave of absence from business school and dedicated myself full-time to LearnVest.
Our mission is to empower people everywhere to take control of their personal finances and make real progress on their money. At LearnVest.com, we are making access to unbiased financial advice as easy as getting a gym membership.
It took a lot of courage to leave business school and become a full-time entrepreneur! What advice would you give to someone who wants to start their own business? What do you wish you had known before starting LearnVest?
One of my advisors said, if you knew what it really took to start a business, you’d never do it! It’s 100% true that it is full of challenges, long days, and many difficult decisions. My first piece of advice is to make sure that you’re absolutely passionate about what you’re building. I get out of bed every morning eager to go to work, because I believe so whole-heartedly in LearnVest’s mission.
I also think it’s critical to realize that it’s okay to fail sometimes. If you’re not failing, you’re not trying hard enough.
Finally, focus, focus, focus. There are a lot of distractions and curveballs that will come your way, so set clear goals and be razor-focused on achieving them.
You have a book, Financially Fearless (debuting on December 31st), to help people get their finances in order. What prompted you to write this book? What do you want people to take away from reading it?
I wrote this book because I believe people need access to clear financial guidance. Ever since I started LearnVest, I’ve heard from so many men and women who have the same questions about their money. I set out to answer them, but also, to build a workbook that allows people to be proactive with their money.
I hope Financially Fearless readers walk away fully educated on the tips and tricks of managing their money—feeling more confident and prepared than ever before. I’ve offered all readers the chance to speak directly with one of LearnVest Planning’s Experts, so I hope everyone feels that their personal money questions have been answered.
LearnVest often advises people to build up an emergency fund to help prepare for any curve balls life throws their way, from an unexpected and costly home repair to sudden job loss. What other financial advice would you offer to job seekers who are facing unemployment or underemployment?
Having an emergency fund, which I call the Freedom Fund, is an essential one. We recommend having at least 6 months of living expenses saved up, but up to a year may be advisable depending on your situation.
Beyond that, a few important tips:
- Be wary of borrowing from your retirement account. There are often tax penalties and fees for early withdrawals, so do everything you can to keep those funds intact.
- Don’t be afraid to work with creditors. Let them know you’re out of work, and see what they can offer in terms of renegotiating the terms of your loans and debts.
- Take the time to rethink your budget. With a limited (or paused) income, what can you truly cut back on? Can you save not only on variable costs (like eating out), but also on fixed costs (rent, cable, cell phone bill)?
- Make sure you’re on top of your health insurance options. Investigate COBRA, joining your spouse’s policy, or other alternatives.
In addition to financial guidance, LearnVest publishes job-search and career advice for its readers. What’s the best piece of career advice you’ve ever received?
I know it’s clichéd, but my mom always said, “If you find a job you love, you’ll never work a day in your life.” It’s so important to think long and hard about what you love doing. Once you’re clear on that, you can set out to find a fulfilling career.
Another piece of advice I think is critical as an entrepreneur (but applies to everyone!) is to surround yourself with the brightest advisors who have been there, done that. I always use the analogy:
if you’re planning to climb Kilimanjaro, the easiest way to start is to find people who have already done it and pick their brains. What did they bring with them? How did they prepare? What path did they take to get to the top? Identify the relationships that will help you grow, and cultivate them.
Any final thoughts for our readers?
Building your career is an essential part of your whole financial life. It’s what determines how much you earn. While it’s important to maximize that, it’s equally important to maximize what you do with those earnings. Everyone needs to have a financial plan. Not having a plan is a plan—just a terrible one. Take the time to get organized, figure out your long-term goals and exactly the steps you need to take to make them a reality. It can be a daunting process, which is why I built LearnVest.com to walk you through each and every step.