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NAWRB: Tell us a little about yourself and describe what you do.
I’m Cheryl Travis-Johnson, and I’m the Chief Operating Officer for VRM Mortgage Services. I’m also a part of the Council for Inclusion in Financial Services. At my first job as a COO of VRM, I handle end-to-end servicing solutions for clients from originations all the way through REO sales. For the Council for Inclusion in Financial Services, it’s kind of two-fold. We’re focusing on financial literacy in emerging markets, increasing the numbers of millennials, women and minorities in middle management to get them into C-suite opportunities—because 60 percent of the financial decisions are being made by a household that’s either being headed by a woman, a millennial or a minority— to make sure they have a seat at the decision table.
Then, the third pillar of all that work is to bring more awareness to our industry and help people build their personal wealth. A lot of people don’t understand financial services involves after-life planning, planning for having a child, college education, planning for weddings. What happens is, organizations like GoFundMe and payday loan vendors get wealthy because people don’t have a personal wealth management plan. So, we spend a lot of time on that as well.
NAWRB: Do people who are lower-middle or middle class still need financial services even if they were previously or still are paycheck-to-paycheck?
Yes. That’s the important thing. This is teaching you how to pay yourself first. That’s part of getting the financial literacy classes. You want to get them earlier on, but the Baby Boomer generation didn’t do an effective job passing on that knowledge. [We’re] trying to fill that gap, where that knowledge transfer doesn’t happen generationally, and we need to do a better job because a lot of wealth is passed on by the Baby Boomers to the next generations, and they won’t know what to do with that money because we are not teaching financial literacy.
They don’t learn how to manage it. But the key thing is this: if you understand you don’t have to be wealthy to build wealth, you just have to know how to do it. Everybody, no matter your income level, has to have a personal wealth-building plan because after-life happens for all of us and it takes finances to do it all. From the lowest-level position to the highest level position, there has to be a level of planning your financial future.
NAWRB: In counseling individuals on their financial position, have you experienced a lot of emotion where they haven’t looked at [their situation]?
What happens is, most people go all the way through college without any financial literacy classes. And so we’re trying to start there. We’re trying to get people earlier, that’s one thing. But those people we’re finding later in life, particularly single people, they kind of live more of a carefree lifestyle because they don’t understand that when you pass on, if you don’t have after-life planning, somebody’s going to have to bury you and that’s going to be a burden on them.
It’s an emotional decision both ways. You’ve got to understand the impact you have on your loved ones, friends, family members, spouses, children. If you don’t plan for that, that’s the critical thing. Get them to understand what happens when you don’t, really focusing on what happens when you don’t have a plan. What does not having a plan mean? It means, when you go to buy a house, you’ve got to pay more for credit or you have to settle for an FHA-style loan product and minimize what you can afford to get because you didn’t plan to buy more. That’s the type of thing you’ve got to get them to understand: What happens when you don’t plan? Then, that will make you think of a plan.
NAWRB: So, what happens if you did that and made mistakes? You did not plan and you find yourself older. Is it too late?
Never. So, now you know what happens when you don’t plan. You could talk to almost 70 percent of the people in this room and they’ll tell you about a student loan nightmare, right? So, we all have some kind of nightmare that we have related to finance that taught us a lesson that we can share. The key thing is, now that you’ve had that occurence happen, you’ve got to get a plan for getting out, setting a timeframe to get out of that situation and what getting out of it looks like and sticking to that plan because nothing is forever. Even for those people who filed bankruptcy, it’s only on your credit for seven to ten years. It’s not forever. So, you don’t have to live like it’s forever. You can start over. It’s never too late.
NAWRB: Where can people who don’t need financial wealth management planning go for advice?
Every major financial institution has an advisor. Bank of America has Merrill Lynch; Wells Fargo has Wells Fargo Advisors. You walk in and what happens is they don’t necessarily seek you out when you’re not at the top 5 percent wage earner, but that doesn’t mean they won’t take you.
There’s so many organizations that are available that have financial advisors that do that type of work. So you just have to seek it out. Go into any financial institution and say “I’m interested in investing in my future.” Call any financial institution. Go to financial services in the yellow pages. There’s so many of them, but you have to ask. Once you reach out and you take that first initial step, they will walk you through it.
But I do caution [that] you want to make sure you are dealing with a reputable financial advisor as you’re learning. As you understand what that looks like, then you can take some risks in terms of marketing, investments you know. But there’s organizations like Fidelity, and just millions of them out there. You will get a personal financial advisor that will walk you through that process starting with the basic things: getting a life insurance policy that’s not tied to your savings, coming up with a savings plan that takes an elevator oil approach instead of putting all your eggs in one basket, understanding dollar/cost averaging, and the basic things about investing money.
You will sit with someone who will walk you through that process. Then, based on your age, it determines the types of things you should invest in. As you get older you want less risk. You take less risks when you’re older because you have less chance to recover. Understand that investing and planning for later in life is a long-term investment; it’s a slow-moving vehicle. Don’t watch it all day; don’t monitor it all day. Don’t expect it to give you an immediate return. It doesn’t work that way.
Getting those lessons learned, that’s the important part.
NAWRB: One last question. The theme of this conference is Year of Women. What makes 2018 a year of women?
You’ve got a lot going on with the current administration that is not necessarily favorable to women and some of the thought processes like Roe vs. Wade and other things that are going to meet some challenges from women in the country that want the right to choose to bring life forth or not.
It affects the woman. Period. Not dual impact; it’s the woman’s body. That’s one issue that’s out there that affects women. No matter what side you’re on, it affects you. The other thing is like what’s going on with the #MeToo. It’s the year women are coming out and saying, “I’m not a sexual object. I’m a contributor to society.”