Season 02 Episode 16
Erin Lowry, personal finance expert, author and entrepreneur

Becoming the voice of a generation

Chris Allen: Erin Lowry, welcome to The Entrepreneur’s Studio.

Erin Lowry: It is wonderful to be here.

Chris: Yeah, so glad you made the trek.

Erin: Yeah, I love it.

Chris: Well, we’ve been chatting along here, and I think that when you have the Broke Millennial on the podcast, you know it’s going to be a fun and informational conversation.

Erin: Yeah, that’s what I try to bring. We’ll see what happens.

Chris: Well, you’ve been a prominent voice in personal finance, and in addressing the financial struggles of Millennials for a long time, as well as for solo entrepreneurs or solopreneurs. I’d love to hear you talk about some of the core motivations that led you to bring this financial health to young entrepreneurs starting out in business.

Erin: Well, I will also say, it’s for all of the people. I say that just because I started talking about personal finance because I found it interesting, and it seemed everybody else was super uncomfortable talking about money. I tend to be the kind of person who’s like, “Oh, this is awkward for people, so let’s kick this hornets’ nest a little bit and see what happens.” Not in a way that I ever want to make somebody else feel uncomfortable, but in a way where money is so enmeshed within our lives, there’s almost nothing we can do that isn’t somehow related to money, down to, “Oh, hey, you want to go hang out with your friends? What are you going to do? Where are you going to go? How much is it going to cost? Oh, you want to take a vacation? Where are you going to go? How much is it going to cost? You want to buy somebody a gift? How much is it going to cost?” Money just tends to touch our lives at every point.

Chris: Yeah, everywhere.

Erin: It was so interesting to me, the number of people I knew in my early 20s who just didn’t want to talk about it, or how I started to realize very quickly how many people maybe were having their lives financially subsidized by their parents, and maybe you didn’t know that, and all of a sudden that gave you a little bit more clarity about why that person didn’t seem to be struggling quite the same way you were. It is just an important conversation. So for me, I love to write, and this all started really with me wanting to create a blog. I swear, it was still relevant back when I started it. I feel like when I say blog now people are like, “Dinosaur.” Which, you’re not wrong. I’ve been doing it for 11 years, which—

Chris: Yeah, long-form social media.

Erin: To Gen Z, I’m ancient. I knew that if I was going to start writing somewhere for fun, even as just a hobby, I had to have a topic, and a topic that was just going to be consistent. I picked personal finance. Unbeknownst to me, personal finance blogs were a thing. I had never read one before. I didn’t know they were out there. What was really fun is, I started writing and those folks started to find me, and that’s actually how I fell backwards into a community that did actually already exist. But I was a very different voice in that community.

A lot of people were a little bit older, and I started when I was about 23. A lot of people were married, most did not live in a major city. So the advice I was giving was very much colored by the fact that I was a single woman, not making very much money, living in one of the most expensive cities in the entire country, and just trying to figure it out. I figured that if I told stories about this, and also talked about how my parents taught me about money, maybe people would find it to be interesting.

Chris: Well, I love it. To have you be that young and be interested in personal finance, I think the whole community of personal finance was probably shocked by that. This is one of the things that I think... What was this — 10, 12 years ago?

Erin: Yep.

Learning lessons in financial literacy

Chris: Now you have a book, and more — we’ll talk about that in a second. But I think the really, really cool part about what you did is that you were one of the people who documented their journey rather than sharing their expertise. It was this along-the-way thing, and that’s the thing I got really excited about, about having you come and talk about it as it is. Tell us about that, because we do have vloggers now. Now we see people literally document their journey, like “I’m discovering this and talking about it along the way,” but that wasn’t going on nearly as much as it is now 10, 12 years ago.

Erin: Yeah, you’re right. It was a completely different way to talk about money especially. My very first blog post ever actually really mirrors the opening of my first book, “Broke Millennial”. It’s in the summer of 1997, a Krispy Kreme donut changed my life. It really is also how the very first blog post happened. It’s telling a story. It’s a long story, but when I was a kid, I wanted to have some money. Who remembers Nerf gun Super Soakers?

Chris: 100%.

Erin: Right? I was a big pool kid. I was on the swim team, my parents would just drop us off at the pool, and I really wanted a Nerf gun Super Soaker. Toys “R” Us, RIP. I guess they’re back. I’m a little confused on the Toys “R” Us journey, to be honest.

Chris: eCommerce, yeah.

Erin: But you had to go buy one at Toys “R” Us, and it cost like $16. My parents were very big on, if you wanted to buy something, you had to figure out how to get the money. I’m seven, so pretty limited earning potential at that point. My mom was having a yard sale, as all suburbanites do, and I had the idea that if people are going to come and buy this used Buns of Steel workout video from my parents, maybe they will buy Krispy Kreme donuts from two cute little kids, because I was going to recruit my four-year-old sister. Well, I went to my dad, Shark Tank style before Shark Tank was a thing, “Hey dad, I really want to sell Krispy Kreme donuts. Could you go buy them for me?” So he agrees to be my backer. He goes and buys the Krispy Kreme donuts. I sell out fast. Every time I tell the story, the amount of money I made changes a little bit.

Chris: That’s OK.

Erin: Let’s say I made $30. I have all these quarters. I’m so excited. My dad comes over and he looks at the pile and he’s like, “All right, well it costs me $10 to buy the donuts, so I’m going to take $10. Kaylin,” my sister, “Worked for you for a while, so let’s give her $5. So actually, your net profit is $15.” Then he took the money. That was my first great life lesson. But it was also my first experience of maybe things are not as they seem when it comes to money.

Chris: You went back to him later and you’re like, “Hey dad, that was a shark thing to do. You, at the end of the day, needed to do this. Help me do this ahead of time. It was my first go around.”

Erin: I thought I was going to get two Nerf gun Super Soakers. I only could get the one Nerf gun Super Soaker. I should have also known because my parents were big on candy tax at Halloween. When we went out trick-or-treating, we’d come back, dump it all out, and they got to pick some pieces because they went out with us. So we had to pay them a tax. I really should have seen it coming. But the point is, my parents, all along the way, were very good about these hands-on lessons to truly contextualize money in a way that was very relatable and understandable, and age appropriate.

My dad always likes to say he’s the villain of all of my stories. Not true. A little bit in that one. But the best gift that my parents ever gave me was the understanding of money, financial literacy, and being able to make very rational financial decisions at a very young age to graduate college, ultimately debt-free. Because, I gave up going to my dream school to live my dream life. I went to the school where I got scholarship money because I was a journalism theater major.

I knew, “Hey, when I graduate college, I’m not looking at a lucrative gig, most likely. So if I have student loan debt, that’s going to mean I’m going to have to make all of these choices and go after a career that isn’t what I want necessarily to make these payments.” I could only make those decisions because of what my parents taught me. Again, journalism and theater. I’m not a math-brained person.

Chris: Neither are marketing people, apparently.

Erin: But that was my big thing for folks when I was starting out. I would hear all of this pushback like, “Oh, well, I’m not good at math, so I’m not good at money.” I’m like, “It’s psychology. It’s not math. This is all psychology.” Adding, subtracting, a little bit of multiplication and division is helpful, but this is not about math. This is about knowing yourself, and knowing how it works.

Chris: Love that. Well, when you say Broke Millennial, how broke was broke?

Erin: Huge advantage, obviously, to be debt-free. Can’t knock that one. I did marry into $50,000 of student loan debt later on, so don’t worry—

Chris: Geez.

Erin: I still got hit with the curse. But I was making about $23,000 working three different jobs my first year in New York City. So, pretty broke.

Identifying the unique challenges and obstacles Millennials can face

Chris: That’s pretty broke in New York City. Wow. Well, you’ve done well for yourself, I think. What is something you see with people your age, what was the struggle you saw early on, and what do you see that is maybe different now, 10 years later? What struggles are different?

Erin: That’s a great question. I think Gen Z is wising up a little bit about some of the things that Millennials were like, “Hey, they told me to do this. I’m going to go do this. They said that good things will happen on the other side.” Gen Z’s like, ”Ha ha ha. Nope." With Millennials specifically, the hard feels the same, to be honest. It feels like every time we get a little bit of a foothold, something just comes back to punch us in the teeth again. It’s like, "OK, hey, we told you to go to college. Go to college, get that degree. Oh no, ’08 is happening. Major recession, workforce is collapsing. You can’t get a job even though you have student loans and all of this other stuff. Sorry."

OK. A little while later, we finally got our footing. We’re finally starting to make some money. Hey, maybe we want to go out and buy a house. “Oh, sorry, the housing market’s going absolutely insane. And oh, here’s a pandemic that’s going to shut the world down for two years. How’s it going guys?” Again, it just feels like we keep getting mocked for delaying life milestones, but it also feels like we are not living in the same environment at all. No generation is, I get it.

Chris: Yeah. Everybody’s got struggles.

Erin: Every generation does have their struggles. However, financially, this is not the same as what other generations had. It is much harder to get your footing, even to live a basic, stable, middle-class life is significantly more difficult for our generation than for previous generations. Even the fact that jobs that did not require a bachelor’s degree 30 years ago, that could give you a middle class life, now require a bachelor’s degree, and that it is so much harder to buy a house now.

OK, Boomers, I hear you with your double-digit mortgage rates. But if we adjust for median cost of living, for median cost of homes, and for median salaries, your gen to our gen, our homes are six times more expensive when adjusting for inflation. It is not the same, even with your higher interest rates, because that’s the first thing they always want to bring up. Sorry, guys.

Chris: They were crazy. But, yeah.

Erin: They were crazy.

Chris: The principal amount was different as well.

Erin: That’s the big thing. Ours are so much more expensive. This is census data, I’m not pulling this out of nowhere. So it is just frustrating that it feels as if we cannot catch a break. Every time people get close, it just feels like we get pushed back down the mountain to square one. So that is where I see the struggle changes a little bit, in the sense that, OK, maybe when you were first starting out a decade ago it was like, “Oh, my salary is terrible, and also I’m having to pay these loans, and I’m just trying to build base-level stability, create an emergency fund, start putting money into retirement, etc.

A decade later, OK, maybe we’ve got a little bit more stability, we’re making some more money. We’ve got the right insurance coverage. We have a little bit saved for the future, but it still feels like we keep getting walloped trying to get to the next step, and to that next step, and it’s taking a lot longer than it did previously. That’s really frustrating. There’s no scrimping or saving your way out of this, to be honest. That’s the other part I think, within the personal finance narrative, gets a little bit lost. It still skews very bootstrap and, “Well, if I did it, you can do it, and everybody can do this.” OK. It’s sometimes motivational to hear that, and sometimes just really frustrating because you can do everything and then things outside of your control can happen.

Chris: So true.

Erin: You could have had a perfectly funded emergency savings fund, everything was lined up, but you worked in hospitality, and then the pandemic happened, and that went on way longer than three months or six months for the recommended emergency savings fund. So you might’ve done everything right, and you still didn’t get the break you needed to make the next step happen.

Uncovering money myths and misconceptions

Chris: Emergency funds are typically for one difficult episode, and some people get two or three in a row, and surviving those things can get really, really hard. Now, I love how you just compared money math to psychology. What are some of the most misunderstood things about money that you’ve discovered?

Erin: First, that you have to be good at math. That is a very common narrative that people have in their heads. So much so, that they just don’t try, in the sense of investing especially. People feel like, “Well, I’m not a business person, and I don’t understand how investing works, and I’m not good at math, so this just isn’t for me.” That is one thing. Let’s just talk about investing for a second. It’s just learning the base level of a different language. There are a lot of weird words and jargon that get used in investing that get thrown around, I think partially to intimidate dumb money, AKA retail investors like you and me. But one thing I love to bring up to people is, “Do you have a retirement account? Do you have a 401(k) or an IRA?” You can answer.

Chris: I do.

Erin: OK, great. Is that money sitting in cash, or is it in the stock market at all?

Chris: It’s diversified across the stock market, and it’s in mutual funds.

Erin: So, you’re an investor. That is what I like to say to folks, that people never think about retirement specifically as investing, probably because we use the wrong language. We say, “You’re saving for retirement.” No, you’re not. You’re investing for retirement. Well, if you are saving for retirement, we need to have a conversation because your money shouldn’t be sitting in cash.

Chris: It’s under my mattress.

Erin: That happens. You’d be surprised. It does happen. Or it happens that people have set up a 401(k) and IRA, but didn’t know how to pick investments. So it has truly been sitting in cash, sometimes for years. So even just having these conversations. If you’re listening now, please go check your 401(k) or IRA, and make sure the money is actually invested and not sitting in cash. How do you know? If it’s all in one thing, and it says something like cash settlement account, cash fund, money market fund, that’s cash. If it hasn’t changed much in the last three years, that’s cash. Call your brokerage, make sure it’s invested. That’s my PSA.

So that’s one really big misconception. The other thing, thinking about psychology and money, tying back to this bootstrap narrative, so many people think it’s about willpower when it comes to finance, “Oh, just toughen up and do it. Toughen up and save. Toughen up and put a little bit more away. Pick up that extra job, do what you got to do.” In some ways, that rhetoric isn’t wrong. But the other thing that is really important to understand is what are your money triggers? We all have them. We all relate to money emotionally, and a lot of people don’t want to talk about that side of things, that money really is emotional. If you have a bad day, do you want to go buy something to make yourself feel better?

Chris: Sneakers.

Erin: Could be sneakers, could be a tangible thing. Could be that you want to go buy a pint of ice cream because you want to emotionally eat, which is tied into a whole other thing, and that’s me. I love ice cream. It could be that you want to go book a vacation. There are so many different ways people react to different stimuli and triggers, but we’re all emotional when it comes to our money. Here’s a fun one for everyone — you can blame your parents or the people who raised you.

I say that because we were all getting messages about money, whether because our parents talked to us about it directly, or we just observed them, or we heard money fights, or whatever it was. But between the ages, about 8 and 12, kids are coding their relationship to money. So the people who raised you are the people who taught you, directly or not, about how you relate to finances. For some folks, the way that can play out is maybe they grew up in financially chaotic households. Maybe it was a situation where one year your family was doing great, and the next year lights were getting turned off and you had to move.

And as an adult, that could either mean you are in lockdown mode with your money, you know where every dollar is going, you are super frugal, you’re an over-saver. Honestly, you find it hard to even spend, to have a little fun and live a little, because you are reacting the exact opposite way you were brought up. Or it could be that chaos is your normal, it’s frankly where you feel comfortable. So every time you get a little stable, you blow it all up subconsciously. But to return back to that point of normalcy in your own brain about what feels good — I know it sounds crazy, but the number of people I know who engage in behaviors like that... I tend to be a bit overly frugal because, to a degree, that was modeled for me as a kid.

So sometimes it’s hard for me to spend money, even on things that seem rational. “Hey, it’s pouring rain. Maybe we will take a taxi home.” “Heck no, I’m not spending $30 on a cab. I’m getting on the bus for $2.” Well, now $2.90. Thanks, MTA. “We’re a mile and a half from home, why am I going to spend $30 on a taxi?” My husband’s like, “Because it’s pouring, and the bus won’t be here for 15 minutes.” Sometimes even my time value of money is skewed because there are certain areas where you’re like, “Nope, nope. I’m returning to my Broke Millennial time,” even though technically I’ve moved on from that.

Turning a side gig into a full-time business

Chris: That’s really good. I love the parallels with psychology, psychological triggers, and how you show up with money, all that stuff. I think something that would be really interesting to hear you talk about is your personal journey of how this became a business for you. There’s the knowledge and the programming, but how did this become a business? How did it go from a side gig to a business? Three jobs, plus a Broke Millennial set of content?

Erin: I really fell backwards into this. That’s why I always think it’s funny when someone asks, “How did you strategically figure out how to go from A to B?” I’m in the entrepreneurial camp where it’s like, “It just happened,” which is not the most helpful information and advice. But for me, some background to know, I studied theater and journalism as a double major in college, and I had every intention of moving to New York City and becoming an actress. That was going to be my journey. I was going to be in theater, and I fully chickened out.

Chris: Wow.

Erin: Yeah. So I got to New York. I got my first job working for “The Late Show with David Letterman”, so it was entertainment adjacent. And I kind of thought, “Well, maybe I’ll meet some people and kind of get the guts to really go for it.” And seeing what people were going through firsthand, in terms of having friends who are doing my job, but also whether it was standup comedians or actors or what have you, and they’re like, “Wow, this is really hard.” And I just would like a stable paycheck and some health insurance, because after scraping together money, I went from $23,000 to $37,500 and I felt rich. I was working in PR as my next job. And during that time is when I was thought, “OK, this is really boring for me.”

It was tech-related PR, so it wasn’t even like sexy, fun things to be working on. That’s when I was like, “I need a creative outlet. What is cheap? Oh, writing on the internet, that’s free.” That’s really where the original idea came from, I wanted a hobby. I wanted it to be cheap and free. That’s how Broke Millennial originally started.

Chris: So was this a WordPress thing for you?

Erin: It started as WordPress. Yes, it did. Then I finally bought the domain. I was like, “Hey, really this is a good name. You really need to go buy this domain.”

And eventually I migrated to the proper dot com instead of BrokeMillennial.WordPress. And during all of that, I was still working in public relations. I also was babysitting on the side, keeping those side hustles up and starting to write. I think it’s just the term Broke Millennial that was pretty eye-catching. The SEO was decent, so I started getting media requests to talk about the state of Millennials and blah, blah, blah, blah. And that is partly how it started taking off. Then I also started getting press, whether it would be journalists who would reach out or editors and just mostly on Twitter, but connections back in the day really could be made on Twitter.

So people would reach out like, “Oh, I read this thing that you wrote. This is great.” So I started to, as my mom taught me, ask for the order. The editor of AOL’s Daily Finance reached out to me to say, “Hey, I read this piece on your blog. It was really interesting.” And I responded, “Oh, thank you so much. I would love to write for you if there’s any opportunity.”

That is how I started to get some of my first freelance writing jobs, just somebody would compliment my work. I would say thank you and ask if there was a chance. That kind of is really what started the ball going. OK, now there’s this blog, which didn’t make me any money. I wasn’t doing anything. I wasn’t doing sponsored content at the time. I didn’t get into the affiliate link game, which was a missed opportunity, because that made so much money back in the day if you were early enough.

And I started to write on a freelance basis, so now it’s PR, babysitting, writing on the blog for free, and paid freelance writing. Then I started getting speaking engagements and I was still doing media stuff. So all of these things were happening. So to tie back now to the, “OK, I wanted to be an actress and it didn’t happen for me.” I was by then 25, 26, and already had one big career regret that was sitting in my stomach. This idea of you just should have tried, why didn’t you at least give it a go?

Especially because that’s advice I gave other people. That advice to someone else was part of the impetus for even creating Broke Millennial. A friend of mine wanted to make it work as an actress and was complaining about it like, “Well, all I do is hope I have enough money at the end of the month.” And I’m thinking, “Your parents subsidize your life. You have no student loan debt. Go try it.” And her being that uncomfortable and coming from that much privilege like, “Oh, I need to write about this.” So I’m now at a point where Broke Millennial is starting to take off a little bit. I had interviewed at a different PR agency for a better-paying job, and it was to ultimately work with one of the big banks. They called me and said, “Hey, we love your writing.” That was part of why they had brought me in. They said, “But if you take this job, we do feel like it’s a conflict of interest, we’re going to need you to shut it down.” And that would’ve been an increase of maybe $8,000 on my salary.

I thought, “I think I can make that side hustling.” So I turned it down, and about four months after that I got a call from a fintech startup about going to work for them. I was like, "As long as I can keep Broke Millennial, I’d be happy to do that. And that is how I started to pivot into working with more finance-adjacent clients, I could still build Broke Millennial, I was making more money working for this fintech startup and I was learning so much. The co-founders had 30 years of banking experience between them, and they were really interested in educating me and nurturing me with insights on how banking works, the backend tricks and traps of the trade. I was just able to then amass so much more information and take that and apply that now to Broke Millennial and get more information out to people like, "Hey, let’s talk about balance transfers. Let’s talk about who they’re good for. Let’s talk about all of the predatory traps that exist and what you need to look out for." So it really informed my work.

Chris: What role were you doing at the fintech startup?

Erin: I was a content director.

Chris: OK.

Erin: So then I got burned out, because I was doing my side hustle job as my day job.

Chris: Content and content.

Erin: I don’t recommend that. But long term — this is all a very long-winded story to get to the point where all of this kind of came together, I got a really big media opportunity. A literary agent saw me, reached out to me and said, “Hey, have you ever thought about writing a book?” I said, “Yes, I have.” And I ended up getting a book deal. Well, I made a proposal, shopped it around, and got a book deal. And that’s when I thought, “OK, I’m going to do what they tell you not to do, and I’m going to quit my day job.” Do not quit your day job if you get a book deal unless you have been building up this whole other business on the side. I did the math, and it could sustain me. And if it didn’t, I had at least a year’s worth of income set aside so that I could float myself while I tried to figure it out and get back in the traditional job force. And the thing about not pursuing an acting career made me think like, “If I don’t do this, I’m going to regret this so much.”

Chris: I’m not taking another lap.

Erin: Yeah. I have to do the thing and take the risk and make the bet on myself. And if it all goes up in flames, I’ll just go back into the traditional job force.

Chris: That’s an amazing story. And then the book deal happens and you become a multimillionaire.

Erin: I wish, but I could make a living, a comfortable living at that.

Maximizing employee benefits before going solo

Chris: I think that story of betting on yourself with some intelligence, or just, I don’t know, maybe it is intelligence. I was going to say common sense. No, I mean it really does take a self-aware moment to go bet on yourself like that. And you had at least some cushion and then you had the thought of, “Hey, I also have a career. I have been a director of content before, so I can go do that again.” So you never looked back?

Erin: Not at the traditional job market. Listen, I’d be lying if there weren’t moments, especially when I’m having to, I don’t know, deal with taxes or a technical issue that happens and I have to be IT. Or just a scenario where if you work for a company, you can just call someone to help figure it out. There are moments where I’m like, “Man, it’d be really nice to just have someone else figure this out.”

Chris: We’ve got people for that. Yeah.

Erin: Yeah. But more or less, I kind of describe myself as a cowboy at this point, where I’m like, “I don’t know if I can go back.” I feel like I would go back in and it would be fun and exciting for about, I don’t know, four weeks to do a new job, but in the kind of structure where it would be like, “We have to have what kind of meeting now? Why are there 17 different meetings on my schedule today? Are all of these totally necessary? I think this could have been an email.” I think it would be hard for me to be like, “Hey guys, I think we could optimize this better.” I think I would be that guy. Then they’d be like, “We don’t need you here anymore. Thank you. You can go. Go be a cowboy again.”

Chris: Back to the Old West. Well, the thing I think would be great to hear from you about is that you’ve got this side hustle and you’re getting taxed on this money, so did you anticipate this when you had a really good year and thought, “Oh, man, yeah, I’ve held money back and I know I’m going to pay my self-employment tax and all that kind of stuff?” Did you have a tax surprise or were you super prepared?

Erin: So I write about personal finance, so luckily I was pretty prepared.

Chris: Good.

Erin: I did a lot of reading and a lot of research before I jumped into this. Also at the time, because I was doing a day job, and again, I live in New York City, so I get triple taxed. We’ve got federal, state, and the city of New York. So I was already paying so much in taxes and then also putting a lot into my 401(k) at my job, that kind of helped subsidize what I was going to owe on the freelance income and the speaking engagements and everything else I was making.

And then even though I had a 401(k) and a day job, I could still open up a SEP-IRA to put some of that freelance money into it. But the big thing that was a practice for me then and all the way until I became an S-Corporation and my business structure changed a little bit, one of the things I would always do every time I got paid, so to also go back to something I said earlier about like, “I had a year’s worth of living expenses,” and how the heck? I lived off of my day job. Everything I earned from my side hustle went into savings or investments. None of it got spent, because I kind of was thinking about creating a buffer so I had runway to go do my own thing.

And every time I got one of those freelance paychecks from then, frankly until about eight months ago, 40% automatically got put into an account nicknamed Uncle Sam’s money. By the way, did you know you can nickname your bank accounts and credit union accounts too? So I don’t have a bank account named something like 567038 or anything like that. Create a nickname on it so you know what it’s for.

Chris: Yeah.

Erin: So I put that money into a high-yield savings account so I can make some interest on it while it was just sitting there doing nothing. But that meant every time I had to write a very painful check, well, let’s be honest, I wasn’t doing checks, I was doing digital payments. But anyway, I had the money there. And then I also, the reason I did 40%, which sounds very high, normally people say 30% is what you should set aside for freelance income. I did 40, because, A, again, city, state, federal. But also SEP-IRA. It was kind of a forced setting aside of retirement contributions as well. So anything that remained after I made quarterly estimated tax payments, I would dump into my SEP. Be careful, though, if that’s your strategy, because you don’t technically know how much you can put into your SEP-IRA until the end of the year. So sometimes maybe you over-contribute and then have to do this fun backpedal dance with the IRS. So just be mindful when you’re putting money into your SEP-IRA.

Chris: Yeah, it’s not like the SEP-IRA custodian is like, “Yeah, you contributed too much too often.”

Erin: No. If anything, they’re like, “This is the max that literally everyone can put in, and if you don’t recognize that…,” I was not maxing it out, that’s a big number, “But if you don’t recognize necessarily that it’s like, “Hey, the guidelines are for everybody, but it’s really the lesser of this amount of money or 25% of what you’re making,” and it’s probably going to be the 25% unless you’re having a really good year.”

Chris: Yeah. Yeah. So did you do it self-directed or did you let somebody else invest it?

Erin: I did self-directed, yeah.

Chris: OK. What vendor did you use?

Erin: I used Vanguard.

Chris: OK.

Erin: Yep.

Chris: Awesome. I used the Equity Trust company back in the day.

Erin: Oh, nice.

Chris: So I had a very interesting story as well. I had started this company, and was basically investing in and selling real estate and helping others invest prior to the 2007 to 2009 wildness of real estate, and I got a massive surprise tax bill and was like, “I am underprepared.”

Erin: That’s usually the story.

Chris: That launched me into, “OK, I need to figure out how to sort of set up a, not only a legal, but a tax structure as well to help shield from this.” And even to this day, it’s like man, writing checks to the IRS, I’m like, “Man, what other writeoff could I have done to actually either have given somebody something great or gotten something for it and not have to just burn it at the altar of the IRS?”

Erin: Yeah. The number of people who have said something along the lines of, “Hey, the more you have to pay, the better year you’re having. Let’s reframe it that way.” And I’m like, “I tried, but no gratitude practice is going to make this feel better. It’s a lot of money.”

Navigating business structure and taxes as an entrepreneur

Chris: It really is. It’s no fun. Well, let’s talk shop for just a second. In terms of tax structure, how’d you get started — as a sole proprietor or as an LLC?

Erin: Started as an LLC.

Chris: From day one when you started making your first dollar?

Erin: No, when I was going to leap into self-employment.

Chris: OK, got it.

Erin: So when I was just side hustling and doing my freelance stuff, my social security number was all over the place, because I kept having to fill out every form. And by the way, password protect those PDFs, and then just have the person on the other end of payroll give you a call or send you a text and you can tell them the password, and then it’s in their inbox as password protected. Just a thought as somebody whose social security number might’ve gotten compromised at some point.

Chris: Cheers.

Erin: Yeah, it’s a delightful side effect of being a freelancer. I would say I was not as prepared for the legal structure as I was for the tax side of things. One, because it feels overwhelming and it also feels like there aren’t very many, even books, articles, websites that provide clear, jargon-free information, because also, just like with personal finance, the answer is usually, it depends. It depends on where you live. It depends on how much you’re making, the kind of business you run. So I felt like everything I read was like, “Yeah, but at the end of the day, it just depends.” I’m like, “OK, but what do I do? I don’t know how to set this up.” So I ended up hiring an accountant immediately into self-employment, even though I still had my day job, just because things were getting a little too complicated.

And then once I started doing speaking engagements in other states, if I made enough money, I had to pay tax to that individual state, not just the state of New York where I lived, which was really fun in the pandemic when things were on Zoom and certain states tried to be like, “We’re coming for you.” I said, “No, you’re not. I did not step foot into your state. This is not like a basketball player who is playing in your state. I wasn’t there.”

Chris: Exactly.

Erin: So that was a big part of the beginning, just starting to hire the right people who knew this better than I did and who could give me information. My accountant, bless him, did try to get me to become an S-Corporation probably two years before I did, and that was me just being like, “This feels like a lot of work,” and the way I’m doing things now, I don’t know. It’s fine. It’s working. But I don’t know, the S-Corporation thing, just feels like—

Chris: It’s a lot of overhead.

Erin: A lot of overhead, a lot of legal stuff I’m going to have to deal with.

Chris: All the minutes.

Erin: I don’t know that this is the right thing to do. And then last year he was like, “It would’ve saved you like $25,000 to be an S-Corporation.” I’m like, “OK, let’s be an S-Corporation.”

Chris: See, that’s strange to me. Didn’t he just say, “File your S-selection on your LLC?”

Erin: No, I don’t remember, to be honest. This is also where I’m just like, “Taxes are a part of finance where my brain just starts to be like whomp whomp. That, and health insurance.” I don’t remember what the reason was, but there was a reason.

Chris: OK. Yeah.

Erin: I cannot tell you what it was, though, which feels bad to me as a personal finance writer, but we can’t be experts in everything, guys.

Chris: Not in everything. Yeah. And the whole payroll thing you had to do with S-corp, all the withholdings, and having to run payroll and all that kind of stuff, especially if you’re a solopreneur, it’s like, ugh.

Erin: But the fact that there are companies designed to help you figure that out and do that and then make all of those payments for you. It’s not like every time I have to go in and be like, “This amount of tax is going to the government, this amount of tax is going to the city and state.” So it ended up being a bit easier than I expected. A bit.

It’s a bit of a headache as well. But on the flip side, I think it’s also important to look out long-term in your personal life about what you want. Because I will say there are moments of being a freelancer or a solopreneur, because that’s what I should call myself instead of a freelancer, is a huge pain. And those are those moments when you are trying to rent an apartment or buy a place, because you don’t have the pay stubs to show, and most landlords, or depending on the mortgage companies or what have you, one year of tax returns is certainly not going to be enough, because every year can be volatile. So you usually need to provide several. You want that credit score to be nice and healthy. There are just so many other factors I feel like we have to think about and sort of play defense against. Have an accountant, because then they can write a letter on your behalf, which is always nice, but becoming an S-Corporation and then having those pay stubs, even if it’s like, “Hey, I’m Erin Lowry employed by Lowry Media, LLC.”

Chris: It’s my dad’s company, I swear.

Erin: Yeah, it’s so funny because, hey, it’s all me. It’s all my money. But having that structure just makes people feel better to give you a loan or be your landlord or what have you. So that is something to consider if you’re in a place in your life where you’re like, “Yeah, I might be a year or so away from wanting to buy a house.” It could make your life easier if it makes sense financially to restructure your business in a way where you are now an employee of your own company.

Chris: Yeah, the two years of tax returns and being self-employed and all that kind of stuff, it’s really not an easy thing to do. I remember when I was running a business and that’s how I was making money. It was my own company. I felt like the system was against me. The system is really designed for being an employee. If you think about it, there are people who can go buy a house. They have a little bit of money saved. Back in the day, you didn’t need any money. You got 100% of the principle paid for. You could borrow 100%. Stated income, stated assets, loan, and they didn’t have any money. They just got a job, and it’s like they’ve got two pay stubs and they can buy a house. But you have somebody who’s literally been proving like, “I know how to make money and I’ve only been doing it for 18 months. You’re saying, I’ve got to wait another six months and get a tax return done beforehand?” Those are things where the system really definitely is designed to be an employee.

Erin: Yes. And two things about that. One, I think being an entrepreneur in this country is incredibly difficult because of the fact that it feels like we’re a country that was built on this premise of, “You can build your own dream.”

Every step along the way is truly designed to just be like, “Oh, you work for yourself? Here’s a bureaucratic website you have to go to figure out how to do this thing that we want you to do. But by the way, this thing was designed in 1992 and hasn’t been updated, and like, oh, it’s just going to keep breaking down.” Could someone just create a centralized place for all of these bureaucratic entities to input their information, then you can go to the one place? The fact that I moved and could not go to a central place to update my address all over the place. And I’m like, “OK, but does the IRS know to send any notices to my new address since I updated Erin Lowry?” But now I have to update the sole member of Lowry Media, LLC? How do I do that?

I will say IRS.gov is a pretty great website, very much in layman’s terms. I will put that out there for people who are stressed about tax stuff, just go directly to the source. They actually do a pretty good job. So all of that I think is incredibly frustrating. The other part, too, is I think self-employed people are not given enough credit for the amount of hustle, because we usually don’t have one stream of income. We usually have a lot of streams of income and know how to go find another one if necessary. A traditionally employed person loses their job, and it can take months and months to get a new job in their field, especially the higher up the ladder you go.

So it’s always been really frustrating for me when people are like, “Well, we don’t trust the money you’re making because it can be volatile.” I was like, “You know what else is volatile? Working in tech with huge layoffs that are happening right now, but you’re going to trust that person’s job who just has the one salary against mine with these six different streams of income that are coming in and likely aren’t all to get turned off at the same time. Also, I know how to go out and find work. It’s been my job for the last 10 years.”

Chris: It’s totally accurate. And everybody’s like, “Dude, you guys are literally venting.” There are scars. There are things that have happened. Right. And I will say that any entrepreneur or solopreneur listening is like, “Exactly, exactly.”

The thing I have found is that if you are in discovery mode and you don’t have a coach or a mentor or some person who’s willing to help you along the way, or a CPA because they’re really busy, and if you don’t have that, you really do pay the toll of discovery. You pay this extra amount of money to finally figure it out over time. And that’s the thing I think is really, really, I’m going to say challenging about the small business environment is that there’s not an easy button. Figuring out how to make the money is one thing. Figuring out how to provide security and a financial future to keep as much money in your pocket as possible and not going to other entities and stuff like that, there should be an easy button for that.

Erin: And also, I will say in defense of the solopreneur, the thing that’s also nice about that is that you’re caring for yourself. I completely understand why people want to build a whole business that can scale and have a bunch of employees and maybe eventually get acquired. That is one obviously successful model that can work for folks. But being a party of one or maybe you and a virtual assistant or something, which again, figure out when you’re structuring your company, if you hire people, what’s that going to look like, if you set up SEP-IRAs and then you hire people full time and then need to provide them with one and have a match, just know what you’re doing along the way. But being a party of one can make some of the headache a little better because you are just figuring out what that means for you, as opposed to, “How does this one decision I make ripple out and impact absolutely everybody in this company?”

And that is not me giving advice to hold yourself back or not to scale, but that sometimes if you’re just building a lifestyle you want and the work you’re doing is funding that lifestyle, it’s also OK to stay where you are. I think sometimes, again, we get this messaging where it’s like, “We’re not doing it right if you aren’t scaling and growing and making this huge business.” Again, different headaches. New level, new devil, to keep using cliches. Something you have to think about is what type of work-life balance do you want within entrepreneurship, because you are never off. Vacations, true vacations don’t really exist because you can’t totally have an out of office depending on how you structure your company. You might be able to grow to a point where, yeah, you can because there are enough people behind you who can really hold it all down. But it takes a really long time to get to that level.

So just kind of thinking about what is the lifestyle that you want within your job and outside of your job, and I don’t think there’s any shame in being a party of one or even just a very small, tight-knit company that isn’t interested in a huge amount of scale and growth. And the last plug I will also make on this, since we were just venting a little bit about all the different structures, is if you find it’s too much, that this is just sucking the joy out of the other parts, there is no shame in going back to traditional employment. I think sometimes people are like, “You failed. You failed as an entrepreneur.”

Chris: I’ve said that many times on the show that I’ve done that.

Erin: But who cares? Go do what is right for you. All right, let’s use people having kids as an example. I’m a Millennial. It’s happening left, right, and center. Let’s say you’re realizing, “Oh wow, I’m a woman. I’m self-employed. I would fund my own maternity leave. That sounds really expensive. Well, how about if I just go back into the traditional workforce for a year or two and they can fund my maternity leave and give me better healthcare than maybe I could have afforded myself being self-employed, start this new phase of my life with a little bit of more structure, a little bit better benefits, and then maybe eventually I return to my entrepreneurship life.” There’s absolutely no shame in that.

Finding the right resources and learning from your peers

Chris: Yeah, I mean, everybody’s got to have a plan, and one that works for them. I think one of the things I’d love to hear from you is your distilled checklist of starting a business. What is the Broke Millennial “How to Start a Business” checklist?

Erin: Following my playbook, it would have to be a day job and moonlight if you legally can, preferably in something that’s not totally related to your day job, so you’re not getting yourself in trouble. But have a paycheck that’s covering your needs and then start playing around with your business idea on the side and let it prove itself. Actually start making some real money off of that thing before you quit your day job and go full on with the job you would like to do. Also, disabuse yourself of the notion that if you love what you do, you never work a day in your life. Who came up with that? I’m sorry. It is still work.

I love my job, but there are days that because I’m an entrepreneur, I have to do tedious tasks that otherwise maybe some HR department or IT department would be handling, or a whole day is taken up by really annoying nonsense or meetings or errands or what have you. I still love my job, but I do work. It is still work. So that would be the other thing — I don’t go into a rose-colored glasses view about what the experience is going to be like. Create a team early, and I don’t mean necessarily hiring a bunch of employees, but finding the right kinds of lawyers, finding the right CPA for your business, figuring out what kind of structure you want to create for your benefits. Are you going to use a third-party company that can create payroll for you and benefits plans for you, how are you going to have health insurance? How are you going to have a retirement plan? Everything your employer provides, how are you going to replicate that by yourself?

Look into all of that before you take the leap, because again, it’s a bit of a headache and a bit tedious when you’re first starting out, so it’s really nice to have some of the information and some of the team lined up. Also, protect your assets, trademark the right things, copyright things. If you need a patent, get patents. Get all of that done very early and have some sort of a mastermind group, whether that’s finding a mentor or finding people who are a little bit further along than you or maybe at the same level where you can get together with them and talk, which is wildly important. And finally, ask people how much they make. Also, if you’re traditionally employed, please ask people how much they make. But if you are self-employed, be talking to people about what they’re charging for certain things, how much they’re earning on certain types of business. For me personally, it’s something along the lines of, “Oh, I have this speaking engagement. I’m going to ask a friend of mine who did something similar how much she charged so I know whether or not the rate I’m about to quote is what the market will bear. Am I going to massively over or undercharge for this thing?”

I had a wonderful learning experience about eight years ago. It was like the universe was trying to teach me a lesson. A dear friend of mine and I were going to speak on a panel for a financial institution. We were both flying from New York City across the country. We were on the same flight. She is two years older than I am. We had pretty much the same amount of experience in the space, but she had an agent and I didn’t, and I was still working a day job and she was never traditionally employed because she was actually an actress before everything started. So we get to our destination, and we’re out to dinner. I had some liquid courage so I was like, “Hey…” “How much did you charge for this?” And she goes, “Oh, I’m making $10,000 all in.” So $10,000 for this gig that we’re doing. You want to guess how much I was making?

Chris: $1,500.

Erin: A little more, $3,500.

Chris: Good for you.

Erin: Thank you. But that was a really painful gap. One, I appreciated so much that she felt very comfortable sharing the information, but two, it really proved to me what the market would actually bear and how these talents were actually valued. Part of it was colored by the fact that I was still traditionally employed. So somebody asked me, “Hey, will you fly across the country, we’ll pay for it, to come and talk about a thing you love talking about on this panel?”

Chris: And apologetically, you’re like, “I’ll charge.”

Erin: Yeah. I was like, “I don’t know. Does $3,500 sound OK?” And they’re like, “Yep, sounds great.” And I am still a work in progress, honestly, with things about rates. It’s so helpful to talk to other people. If a person feels really uncomfortable if you ask them directly, say, “OK, well, I’m going up for this job,” or “I’m sending out this RFP on this, could you tell me, would it be over or under $1,500 that you would charge? Over or under $20,000 you would charge?” Whatever it is.

Let them ballpark it. And some people might just turn around and directly say, “I would charge this much.” And some people might say, “Oh, I would charge more.” Raise it, make it be under $25,000, over or under $30,000, etc. to get them to the actual ballpark number so that you have that information. But especially for self-employed people and freelancers, financial knowledge is power, and I really believe a rising tide lifts all boats in the sense that knowing what other people are charging is only going to help you continue to get paid what you’re worth. Because if other people are out there undercutting left, right and center, it’s going to be harder for you to get what you believe you should be paid to be paid fairly.

Chris: Yeah. Well, that’s a huge lesson. I mean, think about a restaurant. Let’s say they’re a counter service restaurant. They’re charging average tickets of $15 or $20, and then they decide to do catering. It’s like, “Well, how much do I charge? Do I use my prices and just do the multiples?” I love that you said you need a mastermind group. You really do need your own micro community of people who get your thing or have something adjacent or who have been through something similar who can say, “No, wait, think about it more like this.” And reframing all of that, or what you’re saying is asking people what they charge for their products. I think that is huge. I love asking people, "What’s your loss leader? How do you do cross-sell? How do you upsell people? Do you have a freemium model?” I love talking about models, and I think everyone should have a group of people so you can socialize and have a sounding board for some level of proof or evidence that what you’re doing isn’t crazy.

Erin: I would also say if everyone in your mastermind group looks like you, you’re doing it wrong. I say that because diversity of information is wildly important and it’s really informative to have people with different life experiences than you do, particularly people of different ages than you are. If you’re an older person, have some younger folks in there who can give you some ideas. And if you’re younger, have that wisdom in the room. It is so important to try to create a diverse group. And you can be a part of multiple masterminds, for example, let’s say you want to have one that’s more like buddies of your age who are all going through a similar life experience, and maybe you’re getting together two times a month just more to vent and share stories.

Totally fine. But also make sure you’re creating a group that really can be a mastermind that is providing all sorts of different insights and information and that you can also be of service to other people in that group. And don’t think just because, “Oh, I don’t have as much experience as other people,” that you aren’t of value to them as well. The fact that you have a totally different perspective from them can be incredibly valuable and ultimately lucrative.

Chris: Yeah. So do you recommend people pay? What boxes would you need to be checked and how much would you pay to be a part of the mastermind?

Erin: I’ve actually never paid to be part of a mastermind, interestingly. Every one I’ve been in has kind of come about organically from people who have certain pain points or people I’ve just reached out to to say, “Hey, I think it would be really beneficial for us all to get together either in person if we live near each other or virtually.” But again, geographic diversity is a very helpful thing to add to these things. So usually on Zoom or Google Meet. And I think if you’re doing it in a way that is conducive to people’s schedules, so maybe not weekly, maybe it’s monthly or every other week, that can be really helpful. But I think there is merit certainly to paying for certain ones to get access to certain people.

Chris: Yeah, 100%.

Erin: And think critically though about the true ROI of what you’re investing in. I did do a workshop once where it was for authors. Technically the workshop was more about getting the book deal, but they also talked a lot about branding. I had just gotten my first book deal when I did this workshop and I want to say it cost me $5,000. I saw who I was going to be in the room with. I knew the person who was leading the workshop was a big name in the personal finance space. If I even just got her to blurb my book, I was going to see a return on my investment. But more importantly, the other people she was bringing in to speak, if I was able to make an in-person connection with them and then be able to follow up and talk to them in the future, that was going to be valuable.

So that is a relationship that I still have... I had lunch with her just a couple months ago. It is a relationship I have cultivated and I have so much respect for this woman, and she knew who I was before, but me being in the workshop and actually getting to know her one-on-one completely changed the game.

Building an influential network

Chris: Yeah. I mean, paying for that kind of proximity can really, really help. But the thing I like is that you’ve got to have the gusto that I see that you have, which is the willingness to make the ask. You have to introduce yourself. You have to ask the question. You have to put yourself out there, and I think that’s a pretty wonderful lesson where you’re like, “I didn’t do it. I chickened out on one thing and I’m not going to let that happen again.” But being able to be in close proximity to some remarkable people, especially people in the trajectory of where you’re trying to go, it’s important to be around those people and other people like you who are trying to be around those people because those people are likely to be huge influences in the future as well.

Erin: I would say networking is one of the best skills you could be honing — networking, and then also if you are uncomfortable speaking in front of people, do either an improv class or Toastmasters. Do one of them, because feeling comfortable speaking in front of large groups, even if it’s in a room where you’re doing a workshop or you’re going to a mastermind, if you’re not comfortable speaking in front of other folks, it’s going to lessen the experience you’re going to have and therefore probably lessen the networking opportunities you’re going to have. So put yourself in a situation where you might feel a little uncomfortable, but that’s going to have a long-term gain. Improv classes, I’m telling you, try it, especially if the idea of it just makes you shudder because it is such a good, contained experience of putting yourself in an uncomfortable space for growth. The only way we’re going to grow is to be uncomfortable at certain points.

And it also makes you learn how to fire faster in your brain. You’re going to have to be able to respond to somebody quickly. You’d be surprised where that ends up paying dividends. It makes you think creatively, especially if you feel like, “I’m not a creative person, I’m more of a technical person or a numbers person. Creativity, that’s not my thing.” Give it a go. Give it a try. But networking in a way that feels genuine, feels authentic, which I know is just buzzwords to say around networking, but more importantly, how can you be of service and of help to the person you’re trying to network with? I swear if you send an email that says, “I would love to pick your brain, you’re doing it wrong.” Even if it’s like, “I’d love to buy you coffee and pick your brain,” I’m sorry, my brain and my time is worth more than that $6 latte you’re going to buy me. Do not go that route.

But if you come up with some sort of act of service like, “Hey, I was looking at your website and I really admire that you’ve done this, this, and this, but I was also thinking, I actually have really good expertise in this kind of logo design. I would love to mock up a logo example for you, and I would also love to chat with you for a little bit if you have some time.” How can you be of service to someone? How can you help someone? You might worry like, “Oh no, they’re going to be offended if I say something like that.” All right, then find a different thing, but find a way that doesn’t just feel like you want from them, but like you’re also providing benefit to them as well.

Chris: Yeah, I mean, the give and take really matters. If you’re only a taker, you’re only going to get so far, and you’re going to burn a lot of people out. That’s a really important aspect to business, I’d say. If you only have a community, you can only benefit from it if you’re giving to it as well. And you know those networking events you go to and maybe some of them you’ll pay to be there and everybody’s just... It’s so artificial. So if you can make it have the authenticity of who you are and what you’re looking to contribute and knowing that over time, not in an instant, it will get a benefit for that relationship, I think that reframes networking for a lot of people.

Erin: Oh, absolutely. I would say in most cases, it’s going to take quite a few touchpoints to get what you perceive to be a tangible benefit even though you’ll be very surprised, whatever seeds you’re sowing early on, how they can come back in the future to be really beneficial, especially if you’re on the more, “I’ve progressed further in my career” end of the spectrum. Are you putting a hand back to help other people? Because you do not know where those people are going. And let me tell you, mentoring people who are younger than you, whether it is age-wise or professionally in their careers, in your space, is wildly beneficial and helpful too.

Getting comfortable with asking for what you want

Chris: Well, what’s the best piece of advice you’ve ever gotten from maybe a mentor in a relationship like that?

Erin: It’s not a mentor relationship, and I technically already mentioned it earlier, but it was my mom telling me to ask for the order. That was something she told me in my high school life. Technically, it was about a sports team thing with a coach, but it was so life-changing, and not to make this a huge, gendered conversation, but I think sometimes women don’t tend to advocate for themselves as much or in the same kind of way, and I work in what is very much a male dominated space too. So feeling comfortable enough to put my hand in the air and ask for what I want matters and has made huge differences in my career. It doesn’t have to come off as any sort of flex or brag or anything like that.

Again, going back to the Twitter experience, somebody complimented my work, I said thank you and asked if there were opportunities where they worked to write. Anything like that, asking for what you want, can make a huge difference, and it’s not like manifesting it, writing it down, asking the universe. It is asking the person who can give you the thing for what you want. And also putting in the work to get yourself into a situation where you should be getting the thing you want.

Chris: I think that makes a really big impression on doing the work. Even just when people are trying to get a job, the people we interview, making someone ask you the questions or give a pitch is one thing, and there’s a dance in rehearsal of all of that. But when somebody’s put in the work and they’re like, “I looked at your thing and this is the job you’re asking me to do, and here’s something I did to show you what I’m capable of and it adds value to you,” that’s doing the work. You are asking, “Hey, where can I write?” You’re like, “Hey, where can I go get some more work? Where can I do some more work?” And then you’re not saying, “Where can I make money writing?” You’re like, “Hey, where’s an opportunity for me to go be a contributor to get experience or to do whatever?” Doing the work I think is an unsung hero or a big secret, if you will, that a lot of people don’t really get and they aren’t willing to do. And if you are going to be an entrepreneur, you’re going to have to do some sort of free work, if you will. Not necessarily that it needs to be free. I’m not saying do what you’re great at for free, but what I am saying is at the beginning, there are going to be some things you’re going to need to do, gratis, to get someone’s attention or get the next thing. I don’t know if a lot of people are resourceful enough or thoughtful enough to think about some of those things.

Erin: And to kind of combine that with the networking aspect, the other thing too is as you progress in your career, let’s say there’s an opportunity that comes your way, and either because of timing or whatever it is not the right fit for you. A two-pronged way to network is that a person reaches out to you and says, “Hey, we’d love for you to do this gig.” And you say, “Oh, unfortunately that doesn’t really work well for my schedule right now, but here are three other people who I think would actually be an excellent fit for this.” So you are providing a service to the person who reached out to you in the first place, and they all appreciate that, and they might come back to you in the future because of it. The other part is you are passing along some names of people who actually could benefit from the work or turning around and saying to a friend, “Hey, somebody just approached me about this opportunity. It’s not right for me. I passed your name along, but I definitely recommend you go reach out to them as well or make sure that you’re known.”

Doing that is also just an interesting, subtle way to network. And most of the time, the person you told something like, “Hey Julie, sorry, I can’t do this opportunity right now, but here’s Sally, Jack and Grace. Those are their names,” when Julie reaches out to them, they’ll probably be like, “Hey, Erin referred you for this gig.” So you don’t even have to tell them that you referred them. They’ll find out.

Chris: They will.

Erin: And that’s great networking.

Succeeding in negotiations

Chris: It really is. And I think one of the things that’s really awesome is these success stories and these other people you’re passing the benefit to. You’ve written a book and there’s obviously all of the blogging you’ve done and all the microblogging on social media. There’s got to be a story you could share with us of somebody who sort of followed your advice and went from point A to point B. Can you tell us a story of somebody who followed your advice?

Erin: I’ve got a few, so here’s one of my favorites. My first book and my third book both have negotiating advice in them. The first book is more of me sharing a story about how I negotiated at my fintech job and basically went in with such a low anchor point on what my salary was because I had not been getting paid well before. I’d been making $23,000 to $37,500. So when I went in, they’re like, “How much do you want?” And I was like, “$50,000.” Like, OK. Darn it.

Chris: You left money on the table.

Erin: And about a year later I had really proven myself and done a lot of work. I went in and asked for what ended up being a $20,000 increase and demonstrated why I felt I deserved it, etc. So I would share this story a lot and give examples about ways to negotiate where it can also feel collaborative, but you’re demonstrating what your worth is and how to ask for the order and advocate for yourself. So that is in the first book where there is far more nuanced information about that and about asking other people how much they get paid in “Broke Millennial Talks Money”, which is my third book. But one of my bosses who was in the negotiation of that fintech company told me a story once — this was maybe a year after “Broke Millennial”, the first book came out. He’s like, “You know my girlfriend read your book and then went and negotiated her job.” And this guy is very non-emotional with how he talks anyway, so I was like, “He’s either winding me up or this is just him giving his tone.”

“Yeah, so she used your advice to negotiate.” I’m like, “And?” And he goes, “Yeah, she got a $10,000 increase in her salary.” I was like, “OK, why were we winding me up that this was like, ’And then she got fired.’”

So that one was great and I have had a lot of people reach out over the years, especially on how to ask a co-worker how much they make, particularly for traditionally employed people about how that made a huge difference and how much they were looking for in a next job or going to negotiate on their current job, and also for freelancers as well. But one of my other favorite stories, and this is a cautionary tale of horror to tie back to my PSA of is your money invested in your 401(k)? I wrote about that a lot in "Broke Millennial Takes on Investing’’, which is book two.

And I wrote that book mostly in response to people saying, “Hey, you recommended all these investing books in your first book. And I checked them out of the library and they’re super complicated and I still don’t understand how investing works. Got anything simpler?” I’m like, “No, I’m going to write it.” So I’m going to take you all the way back to the level of “I assume you don’t even know what an index fund is”.

And that’s really where the second book starts from this place of, “Here’s the jargon, we’re going to assume we’re all actually not speaking this language yet. Let’s progress to speaking it and then learn how to use it.” So in that book, I do this whole soapbox speech about, “Hey, it’s investing for retirement, not saving for retirement. This is so important. You need to understand this.” Then I started posting about it on Instagram and I had a woman DM me minutes after I had posted about it, saying, “I just checked my 401(k) that I’ve had for three years at this company. And you’re right, it is sitting in cash, so I’m now going to go make sure that it’s invested.” I still hear from her every once in a while. Anytime I do a little PSA, she’ll be like, “Yeah, go tell ’em.” Also, that was 2019, so I feel like it did well for a while, and then she was probably like, “Why did I listen to her?” And now she’s like, “All right, I’m glad I listened to her.”

Figuring out what comes next

Chris: That’s so funny. Well, you are three books in. What’s the next big thing you’re going to tackle?

Erin: Figuring out what’s next.

Chris: OK.

Erin: That’s sort of a very big answer for you, but I think I’m also in a space in terms of growing in my career. One thing is that I feel it’s really hard for entrepreneurs because there’s no ladder or career map for us, it can be really hard to know when and how to pivot. Especially if you’ve been having success. It might feel strange to think, “Well, this entity I’ve created is very successful. I’m just going to leave it.” What a strange thing to do. But when you’re in a traditional job, there can be more of a linear path where it makes sense. Like these are the promotions and this is where I’m trying to ascend. Almost 11 years ago, I created what became a brand and a company called Broke Millennial, and it really described where I was in my life at the time.

I’m not there anymore. I am not a Broke Millennial anymore. And I always said that the brand, the reason it wasn’t “The Broke Millennial”, it was just “Broke Millennial”, is because it’s not about me, it’s about the generation. There will always be people who feel like they’re Broke Millennials, even if you’re making money. It still can feel that way, which I stand behind. But I’m also at a phase where I would like to try something else. I want a new challenge. I talked about how growth really happens when you go outside of your comfort zone. This is my comfort zone. I’ve been here for over a decade now. I want to try something else. I don’t know what that something else is yet. And also, it’s really scary to walk away from something you’ve created because I don’t want to shut it down and I don’t want to kill it. I want it to still exist. It is a product that is very much of service to people still and is very helpful for people.

Chris: Yeah. It’s got a whole community.

Erin: Yeah. And so I don’t want it to go away, but I want space to be able to also do something else. So that is an interesting growing pain I’m experiencing right now where I’m wondering how can I leave my comfort zone without damaging or killing what has gotten me to this point?

Chris: Man, that’s interesting. I could see you becoming a travel blogger.

Erin: Listen, don’t tempt me.

Identifying your psychological triggers about money

Chris: That’s really good. We’ve talked about a lot of things. I kind of want to put a wrapper on the conversation for a couple of different reasons. One, I think it’d be super helpful. You’ve referred to these seasons, these sort of financial seasons. What’s the one thing somebody can do to not just weather the storm of one macroeconomic crisis? Because you talked about a couple of them. What’s one thing somebody can do or a mindset they need to weather multiple storms for long-term success?

Erin: It’s such a good question with no simple answer. I’m going to tie back to the psychology of money though, and say there is no one-size-fits-all answer to a question like that. Because what makes me sleep at night is going to be different than what makes you sleep at night and what makes a person listening to this who’s like, “Oh, that was a gut punch of a question because it stresses me out to think about it,” sleep at night. I would recommend you start to identify what amount of money makes you feel comfortable to live a baseline life, which is a weird way to word that. I call it bare essential living expenses. That’s how you find your emergency savings fund. It’s not like living your life at its best. It’s keeping the lights on, paying rent or mortgage, daycare, transportation, healthcare, etc.

All of those things you need to live. What’s that number now? Multiply it by the amount of months that makes you sleep at night. For some people it might be three. For some people it might be six. For some people it may be 24. I would say it also depends on the volatility of the job you do. Find that number. I would say first that’s the number you want to work towards in terms of just like cash in the bank that makes you psychologically comfortable. Then start to get pretty aggressive about investing beyond that, I would say. Please invest, please. The other thing that I don’t feel like we talk enough about, especially in personal finance, is what is your social safety net? We talk a lot about how you can save and invest your way to financial independence and create security for yourself, which is obviously super important.

But what does your safety net look like outside of your finances? If everything went sideways tomorrow for you, who can you call to stay in their home? Who can network you into a job? Whose car can you borrow? Who could watch your kids when you need to go out looking for a job or handle something else that’s happening in your family? Who can provide care for you if something happens to you personally? Also, do you have the right insurance coverage for different things that could happen? I think people get so overwhelmed by all the different areas of our financial life that we need to pay attention to the fact that they kind of just shut down and don’t take care of any of it. But if you identify what your big pain point triggers are, psychologically speaking when it comes to money, I want you to attack those.

Those are the really important things to take care of because when seasons of life happen, and they will, there will be some times where everything is just going great and is perfect. And then sometimes where it’s like not just one thing happens but 25 things happen after that which makes you feel like “I just cannot catch a break.” So socially, who else can be there for you when those things happen? Who is your community? And if it’s not friends and family members, literally in your community, what are the services that are available to you?

Just having that written down somewhere might be the mental safety net you need. And then what is the amount of money that makes you sleep at night? And spoiler, because of the hedonic treadmill, every time we start to earn more, that number tends to go up and up and up. So just be mindful of lifestyle creep, be mindful of all of that. Frankly, you can get yourself into a mindset where truly you never have enough money. I’m just saying, what is the baseline amount you need to put your head on the pillow at night and feel some level of security? Figure out that number for yourself.

Chris: That’s great advice. Super great advice. What’s the best way for people to get in contact with you?

Erin: Instagram: @brokemillennialblog. Somebody was sitting on the handle Broke Millennial all those years ago, so “blog” got tacked on. My website is BrokeMillennial.com or you can email me at [email protected]. That is my direct email address and if you get a bounce back, double check the spelling of Millennial.

Rapid-fire questions

Chris: That’s so good. So good. Well, I’ve asked you a lot of questions about your topic and who you are and whatnot, but I think it would be really helpful to get to know a different side of you with something we call rapid-fire questions.

Erin: Let’s go.

Chris: This is awesome. All right, describe a student loan in three words.

Erin: Legal entrapment, I guess I would say.

Chris: I love that answer. What’s the guiltiest pleasure you actually spend money on?

Erin: Ooh. Really high-quality dairy products would be an interesting answer to this one, which would be one. I love milk. Did I spend $32 the other day on two pints of ice cream? Yes, I did. And not to throw a previous guest potentially under the bus, but you had Danny Meyer on, his daughter’s Caffè Panna. Oh, it’s so good, guys. I am an ice cream savant. It is so good, but it’s not very close to my house and the place that sells it near my house adds like three extra dollars per pint on and it doesn’t matter. I’ll still pay for it.

Chris: Wow. OK. That’s good to know. I was not expecting dairy.

Erin: Yeah, there are also certain things with travel, I like to go high-low on my travel experiences. My husband’s pretty tall, so do we pay an arm and a leg sometimes for at least bulkhead seats in Economy Comfort? Yes, we do, if we’re flying a long distance. I like to stay in a nicer hotel, but then I’ll do a lot of cheaper things and be boots on the ground there. So I like a high-low mix.

Chris: All right, well what charitable cause are you passionate about?

Erin: I would say a few, definitely. My husband’s a teacher. Things related to education, particularly about making sure kids who maybe don’t have access to certain clubs, particularly arts programs and writing programs can get access. Dogs are very close to my heart, so all sorts of different animal rescue organizations. And then also, for anybody who lives in a city with a high amount of unhoused populations, obviously there can be great resources in your city to donate money to. But the other thing too, kindness and dignity, looking somebody in the eye and just saying “Hello.” That’s huge. But particularly, at different times of the year, there’s also just creating your own at-home kits to hand out to folks and just making sure people in your area are getting resources. It’s incredibly important. So some of what I do has less to do with working with organizations or donating and it’s more about time and creating things myself and getting into my community as well.

Chris: OK. Well other than personal finance, if you had to do a TED Talk, what would it be on?

Erin: How to have uncomfortable conversations—

Chris: Oh, I like that. This one’s random, it’s on the list and we’re all trying to figure out where it came from — but Christmas trees, real or fake?

Erin: Oh, fake, hardcore. Fake. I actually feel so strongly about this. Yeah, oddly enough I feel so strongly about this. I don’t understand why anyone gets a real Christmas tree. Partly, listen, I live in New York City. Trying to get a real Christmas tree to my house is a major pain in the butt. I have a dog. She loves sticks. I think that is just taunting her in such a cruel way. I also don’t use it. My parents might have actually been living right here in Oklahoma City when this happened, but famously, my family had fake trees because my parents one time did a real tree and their boy dog kept peeing on it. So from then on, we were fake trees all the way in my house growing up. So that’s just how I grew up. But also, it is just like, what is the payoff for having to go... OK, it smells nice. You can get the smell in a diffuser and just put it behind your tree. Problem solved.

Chris: Problem solved. Yeah, I don’t like signing up for extra work.

Erin: Yeah. Where’s it going afterwards?

Chris: Yeah, that’s my thing too. If you could only do one type of investment, stocks or real estate, and you can only pick one, which one would you do?

Erin: Stocks. Hands down.

Chris: OK.

Erin: Real estate is way more work.

Chris: OK. That’s good to know. Well, personally or professionally, what’s next for you?

Erin: Well, personally, I’ll get on a plane and go home. So that’s what’s happening right after.

Chris: So the very next thing.

Erin: The very next thing, well, actually, I’m going to take some nice walks around Oklahoma City. I would say professionally and if anyone is listening to this and has an answer, please email me about what I should do next. But it really is trying to play around. I gave the advice earlier of keeping your day job, but start playing around with things to figure it out to see what hits, what feels fun. And one thing I’ve been playing around with, if you follow me on Substack, is that I have a newsletter. It was a personal finance advice newsletter for a year. Recently, it has changed to unsolicited advice from Erin Lowry because I love giving unsolicited advice and I figured why not write it down and see what people think. So just an area I’m playing with right now.

Chris: That is amazing. Well, it’s been awesome to sit down and have a conversation with you, Erin Lowry. We wish you nothing but the best and hope to hear the amazing story continue.

Erin: Thank you. It’s been really fun to be here.

Chris: Awesome. Thanks for coming.