How I Invest My Money + The Importance of Human Capital With Lazetta Braxton

Lazetta Braxton: So within the four years of us marrying, I had student loan debt, he had student loan debt, we had consumer debt. We knocked it out in four years and started to bill our go to hell fund or get out of hell fund because oftentimes, when you are part of an oppressed population, that's exactly what you're dealing with.

Taylor Schulte: Welcome to the Stay Wealthy Podcast. I'm your host Taylor Schulte and today I'm joined by special guest Lazetta Braxton. Lazetta has appeared on NBC Nightly News and Closing Bell. She's a member of the CNBC Digital Financial Advisor Council, a Wall Street Journal blog contributor and she co-wrote a new book titled How I Invest My Money, which was illustrated by friend of the show Carl Richards.

In our conversation we talk about investing in human capital, Lazetta's go to hell fund and how she's working to provide broader access to financial advice.

For the links and resources mentioned today, head over to youstaywealthy.com/106.

Okay, so you're the co-founder of 2050 Wealth Partners and you're bio, which really I enjoy to read and bio states that you're on a mission to provide access to financial planning for the rest of us.

So I thought just to kick us off today, I'd love for you to just tell us a little bit more about that mission that you're on and the why behind it.

Lazetta Braxton: Yes, so the financial planner for the rest of us is really allowing people to know that you don't have to be in the 1% to be able to have a financial planner, a financial advisor.

And what we often find in terms of our conversations is that people are like, do I deserve a financial planner? And I even often hear, well what is a financial planner? And that's another whole conversation because people still confuse being a financial advisor with just investments with a holistic approach that we take with financial planning.

So it's really to allow people to identify if they feel like the rest of us, meaning that they haven't been serviced by Wall Street and recognizing that they too deserve to have access to competent, ethical, and very engaged financial planners.

Taylor Schulte: A common question that I get and I'm sure you get it too, is how do I know when I need a financial planner? I'm curious, how do you answer that question?

Lazetta Braxton: Twofold. There are some people who seek a financial planner cuz they're in a crisis and they say, okay, I make all this money, I inherit all this money, what do I do?

And then you have the people who have said, I've done all of the rules of thumbs, I have my cushion account, my emergency of savings, I'm maxing out my 401k, what do I do next? How do I ensure that I am making the most of every dollar that I have and living the life that I wanna live and be able to transfer that wealth to generations to come?

So if you find yourself in either bucket saying, I'm at my wit's, end or I wanna enhance what I'm doing with my finances, better with an expert, those are two very good reasons to seek out a financial planner.

Taylor Schulte: Did you start on day one with this mission to provide access to financial planning to the rest of everyone or did you work in a different environment which then kind of catapulted you into this mission saying, you know what? Like I've seen what it looks like on the other side, I wanna do something different.

Lazetta Braxton: It started with the experience I had just with my parents. They are high school sweethearts. They had me right after graduating from high school and struggled financially as a young couple in a rural Virginia town. And so I began to wonder if their financial challenges were related to their choices and or systematic issues.

The town that I lived in didn't have a lot of black professionals including no black bankers. I remember admiring a female as she became a CPA. She was a graduate 12th grade I was in middle school and I'm like, I wanna be like her to be engaged in finances, math, business in some way to figure out how to help my parents.

So that was a quest for me to figure out personal finance in a way that my family could live comfortably and make their dollars stretch and work for them. My journey ended up taking me to understanding Wall Street, noting that I had no desire to stay on Wall Street per se.

So as soon as I got my degrees in finance, my experience, I knew it was time for me to take the leap and really focus on at the time the mass affluent.

Taylor Schulte: Well you've had a really impressive career and you recently co-wrote, I hope that's the right term here. Co-wrote a book last year that really made waves in the finance world. It's called How I Invest My Money and there were about 24, 25 other contributors, many of them have actually been on this show and it was also illustrated, which is really fun by my good friend Carl Richards who a lot of our audience knows.

He's famous for his sharpie drawings and his New York Times column and has written a couple of my favorite books. But How I Invest My Money is a really unique book and I'll be sure to link to it in the show notes for everybody. Your chapter really stood out to me because more often than not when we talk about investing or making an investment, our brain's gonna immediately turned towards stocks and bonds and real estate and making money.

But the very first sentence of your chapter, just grab my attention when you wrote my very first investment was in me. So I know you were just sharing a little bit about money growing up, but I'd love for you to expand just a little bit more before we dig into that first investment and this concept of human capital.

I'd love to just hear a little bit more about like what money was like for you growing up and how your experiences with money in your youth maybe have helped shaped who you are today and this mission that you're on.

Lazetta Braxton: Absolutely. My father continues to be a construction worker. My mom worked in a factory and later became a licensed practical nurse, LPN. And so what I realized in terms of our wealth was so tied to them working and to their gifts and what they were passionate about.

So although they didn't make a lot of money, they were really proud of the work that they did and how they helped other people as well too. That's how I understood the value of human capital about your contributions and then realizing that you deserve comparable wages and salaries for what you bring to the table.

And as a black female with all of the wage gaps, the income gaps as well. That's why I focus so much on the human capital because there are these gaps that you may work as hard and get as many degrees as a counterpart and still be paid less.

And with the income gap and the wage gap, it ultimately can result in the wealth gap. And wealth is when you have options to go where you wanna go live, why you wanna live leave jobs if you don't want to work there anymore. And so for me, I always wanted to make sure with our clients that at bare minimum that they're doing what they love and that they get paid equitably for what they do and what they bring to the table.

And then from there, that asset that you generate that income stream which is income, we always talk about multiple streams of income, being able to redeploy that so it's not all active, meaning that is not all you working so hard to continue to generate that income. Whether you can diversify from the asset of you to other assets that will work harder on your behalf.

Taylor Schulte: I've said on this show a number of times that our behaviors and attitudes towards money start at a really young age, like seven or eight even they say. And I can remember way back when I was 6, 7, 8 years old and little things that my parents did that have stuck with me today and have really grounded some really important money habits and behaviors.

I'm curious, is there anything way back then age seven or eight that your parents did that have really had an impact on you?

Lazetta Braxton: Yes, my parents, particularly my dad, was very clear about what we had and what we didn't have. So when there was conversations and even at 7 or 8, remember in elementary school about fashion and design and jordash and different things and I'm like, I want that label, I want that brand. And my parents were like, no, it's not worth the money and no you're not getting it.

And so there was a part of me that appreciated them being very clear on the budget and what we can do. And then there was another part of me to say this feels very restrictive as well too. And so I did, I had to balance that notion of it wasn't really a scarcity mindset for my parents or abundance with wisdom.

And actually it was a combination of the two I realized and had to develop my own relationship with money because of those two competing factors, the positive aspect and also the negative aspect of that.

Two, do I feel as though we were comfortable relatively speaking? Yes. My dad as a construction worker also decided to build our house himself in the construction process. Took a long time so it always feels so comfortable to constantly live on a construction kind of house.

But that's how he made the dollar stretch because we didn't have the full money to just have someone build around. At the time we lived in was a mobile home and as a family grew we needed more space and that took time that was challenging but I was definitely very loved as well too.

So one of my notions for me was once again making wise decisions with what was available to me and also believing that I deserve to be able to have nice things because I want them within reason as well too.

Taylor Schulte: Well it's really fascinating to me is money, like you said, wasn't growing on trees growing up and when you graduated high school you had a full-ride basketball scholarship to a division two school and although your dad encouraged you to accept it in order to kind of help with the family's financial situation, you declined that scholarship and you took this giant risk and instead decided to attend UVA, the University of Virginia, which is a D1 school.

So talk to me about how that all shook out and that conversation with your father and how you decided to take this risk and take this leap and go to UVA.

Lazetta Braxton: So as a part of being the oldest child, taking on a lot of responsibility and didn't want to be a, in my mind, a burden to my parents, I worked two jobs in high school so I already felt a sense of independence because I had my own money. Was it enough to pay rent and other things? No, but it was enough to take care of what I wanted and also save for college as well in terms of having spending money during college.

So when it came to that decision about playing basketball and I'm like, dad, basketball is not going to help me for the long term, I understand the short term aspect of it that I wouldn't have to incur any school debt student loans, but I'm like in the long term and I'm thinking of myself as an investment and then I can tell you then I didn't know a whole lot about stocks or bonds as I was an accounting major.

Well accounting, not a major in high school but that was my focus was accounting. I'm just like, I seen her future in basketball. And then the other aspect was just very challenging once again as a black person and female as well too that I declined from a historically black college offer.

And so there were family members that said you should support and be around our community. And I'm like I appreciate being black and I also know there's a whole bunch of wealth at UVA and that was on my mind. It's like how in the world that these people have so much wealth I want to know and I wanna be around it even though I did not in any way have any of the, I wanna say social etiquette if you will understand that culture, the wealthy culture, none of that because I just wasn't exposed to it, wasn't raised a part of it.

So I knew it was gonna be a stretch for me and I saw it as a business decision to attend U V A just for that very reason in-state tuition was nice as well too. But I still had stony loans and I knew I was on my own at that time. Parents did not co-sign for loans And so it's like I'm going to do this, this is an investment, I'm gonna be around the wealthy, I'm gonna take this plunge and I'm gonna make it work.

And he said Okay, we'll make it work. My parents were married at 19 and 18 when I graduated I was 17. And so in my mind and like I'm already an adult and this is the adult decision that I made.

Taylor Schulte: Correct me if I'm wrong, but to me it feels like a risky decision at 17 years old. Is that accurate?

Lazetta Braxton: Risky? Probably from the standpoint of one from the town that I attended, my educational background wasn't as robust as a lot of the students there. So even though I graduated in the top five of my class in high school, there was definitely an educational gap.

Two, the risk is I knew I was an outsider. I wasn't a senator's kid, I wasn't a doctor's kid at all. But I didn't really meet the profile of a lot of students that I knew would attend emotionally. That was very draining at times and very isolated as well too.

What really helped me, which I found out later once I was there and actually kind of the summer before was I got involved with a program that was geared toward black students. So I found community right away and became a part of the peer advisor program. That was a for me. And so the risk for me was probably real more so the academic and socially, but I was already determined.

I mean in high school I excelled in academics, I excelled in sports, I was in the band, I was a cheerleader, I led the beta club so I already had a high capacity for pushing through. And so I'm like here we go, let's do it.

Taylor Schulte: I love it. And then you met your husband shortly after graduating. I'd love for you to talk a little bit more about that which is another investment in yourself. But first I just have to ask you, talk to us about this go to hell fund and where this came from and who came up with this clever name.

Lazetta Braxton: So my husband and I met in 96, I graduated in 95, so I'm a Gen Xer and the way that we met was through a mutual friend slash cousin. So my cousin who also went to UVA, Brad went to UVA, and Brad graduated the year I matriculated to UVA so we missed one another.

And so I was living in College Park Maryland. Brad was living in Baltimore, he was finishing up his PhD through Emory and also pastoring a church. And so the way that we met was actually attending his church service, for which my cousin was a member of the congregation.

And so we met, that was July 96. We got engaged December of 96 in married in September of 97. So very quick courtship. What we immediately found in common was that two things. One our view on social justice activism really based once again in the person and humanity. For me it looked and does still look like the human capital aspect, getting what you deserve economically for him, more of obviously the more spiritual side of it that we're all God's children.

And so our alignment on believing in core humanity and also noting that the way that we courageously lift our voice and that a lot of places would not agree as black vocal people about things that matter. And so because we shared that we wanted to have that flexibility to have cash reserves and leverage our human capital that we would be marketable even knowing that some firms may see us risky as a risky investment as well.

So within the four years of us marrying, I had student loan debt, he had student loan debt, we had consumer debt, we knocked it out in four years and started to bill our go to hell fund or get outta hell fund because get outta hell.

Oftentimes, when you're a part of an oppressed population, that's exactly what you're dealing with. Racism. And then for me, sexism and these are the isms that we have been fighting against when we were in undergrad and immediately realized that pretty quickly upon meeting.

Taylor Schulte: And so do you still manage and replenish your go to hell fund?

Lazetta Braxton: Oh goodness, yes. It's a constant and it's no different from people who say they're cushion account. Sure. And you have to realize how much you really need. So that's why I'm able to be an entrepreneur.

Taylor Schulte: Well it's so much more fun to fund your go to health fund than it is an emergency fund.

Lazetta Braxton: Some people may feel like it's an emergency to be able to leave their job because so many people stay in their jobs because they need the income. No never wanted to be held hostage by institution ever. And that's how I'm wired for him. He likes the in terms of risk.

So let's think about this as you think about people, are you a bond or are you a stock? I'm a stock. Lot of risks. You use the term risk. I have a high stomach for it and if I have to scale down the way that I live to be able to be independent and free and happy, I'm gonna do that. My husband has a degree of risks but thank goodness he's more of a bond because he does like the stability of institutional income and I appreciate that too.

Because we both can't be stocks and we both have been stocks at certain aspects of our marriage together. So with him in terms of his voice, he has to manage that a little closely. Whereas for me, as you know and what you see in the financial services industry, I have the liberty to speak on behalf of a lot of people because I don't have the fear of someone trying to attack my economic opportunities at all. That's very liberating, extremely liberating.

Taylor Schulte: We kicked off this interview talking about the mission that you're on and getting people access to advice. Talk to us a little bit about what your firm looks like today and who you guys specialize in working with and what you do for your clients and maybe most importantly, how do you guys help your clients invest in human capital? How do you implement that inside the practice?

Lazetta Braxton: 2050 Wealth Partners, Rianka Dorsainvil and I merged a little over a year ago. So I had found in my practice in 2008 and I believe Rianka had founded her practice in, I kind of missed the years 2014, 2015 we had been masterminding together meaning sharing best practices as fee only financial planners, as women of color leading our own firms.

And we're like, well since we are aligned in so many ways, why not join forces? The 2050 for us is very significant because the Census Bureau says by the year 2050 the US will be a racial mosaic and we want wealth to be able to transfer along with that.

And so by coming together, we both fee only, we both are bonafide certified financial planners, which means we anchor everything that we do in goal setting and also looking at cash flow, tax planning, investments, retirement planning, college planning, insurance planning, estate planning, very holistic, helping people navigate buying a home or dealing with intergenerational wealth transfer and even care as caregivers as well financially and physically as well too.

And so we are very structured in our first year where we're in the first four months have established a financial plan to include lots of conversation and data analysis and then we take the deeper dive in the areas that I mentioned and within the first year that's the foundation. And then we do ongoing maintenance looking at each of the areas divided over certain quarters to be very intentional about that.

So even with that structure, if there are needs that the clients have, they can always do a check-in as well too, which happened a lot last year with the pandemic and making sure that their financial plan was at work and any adjustments that we need to make in terms of our segments.

We serve thriving professionals, entrepreneurs, first-generational wealth builders and sandwich-generation wealth protectors. I lean more toward the sandwich generation wealth protectors because there are two generations ahead of me that would be the baby boomers in the silent generation, three generations behind me, which is so interesting with the millennials, gen Z and Gen alphas.

Bianca has done a lot with the first Genin wealth, which that is a lot of millennials as well too. And so there is some cross section between those four categories and what we find just in the commonality is they're all just trying to make the most of what they have and appreciate the intentionality about underserved and and overlooked populations. The wealth spans from the mass affluent to the high net worth up to about 5 million as well too.

So it's just great being partners on the journey together with our clients.

Taylor Schulte: How do you guys handle situations knowing that you want to provide access to financial planning and I think one of the maybe misconceptions if we wanna call it that is that I don't either have enough money to work with a financial planner or I don't make enough money to pay a financial planner.

So have you guys structured a fee schedule in a way that allows more access or do you guys have pro bono opportunities or what are you guys doing instead of 2050 to to cater to more people?

Lazetta Braxton: So let me kind of anchor it in two different segments. One the sweet spot that has been for financial services has been clients with a million dollars in assets from the management because that generates a fee of $10,000 at the 1%. So that's kind of the entry point.

And then you have on the other end of the spectrum where there is this pro bono or and then elevates to coaching. With the coaching and the pro bono really focusing more on savings and debt because they can't really provide financial advice for us. We're kind of in the middle where for our baseline single household is 5,500 and then 6,500 for couples.

And all of this is on our website, full disclosure. And what we see with our clients, many of them have not worked with a financial planner before. They've been kind of do-it-yourselfers and certainly having disposable income, some we have to help them turn their income into assets as well too.

And what we find is a lot of people will spend what they spend on us and we are with them all year constantly every year on vacations, gym memberships, they don't use Dotted Out, which was a case before covid and the like. And so usually we may find ourselves maybe 2% of income, 3%, which is not a whole lot for what we're able to do and the time that we are invested, we leverage technology a lot.

We are very efficient with our workflows, expectations of sharing this partnership as we provide education guidance and assistance with implementation as well too. So we are serving the mass affluent, the upper well, the high net worth on kind of the lower end, the entry point for the financial services and it's worked out well for us. We are a team of four, so Rianka’s and I's partners and then we have two full-time associates.

One is a certified financial planner and the other person is kind of just wonderful. She's done a rotation in every area, and also helping with paraplanning as well too. So we are in the growth mode and we'll continue to expand our team and with our business clients we start at 10,000 for them because it's more involved with them having kind of the same number of team members and needs of businesses, which as we know quite engaged to work as well too. And mirrors very similarly the personal financial planning process in areas.
Taylor Schulte: Absolutely. Well you and Rianka are absolute rock stars. It's been really fun to watch you guys from the outside. This is the first time you and I have actually gotten to connect and chat, but I love what you guys are doing. I'll continuing to follow along.

Before we kinda wrap up here, I just wanted to kind of ask an open-ended question. There's a lot going on in the world, there's a lot going on inside of our profession and I was just gonna ask, is there anything that's on your mind right now, this week, this month that you wanna use this platform to voice or talk about?

Lazetta Braxton: Yes, we talk so much about human capital and I appreciate you Taylor for anchoring our on something that's so dear and so important to me. I've alluded to how I have approached human capital from the aspect of financial planning. You asked what do we do? There is an example of a client who, he shared with me his title.

We did a Google search and looked at salary.com and realized he was grossly underpaid and he would've never thought about kind of the range that he should be making based on that title and the size of the company.

And so these are the things we do tactically as well too, to make sure that people are getting their value and work and have support and data behind it. I extend that work with financial planning to also consulting to help registered investment advisory firms as well to help to unleash human capital.

My mantra is transforming human capital into equitable social and financial capital. And that's what UVA did for me was to give me a space where I brought my raw human capital, I expanded my social network that helped me find jobs placements when I moved my family, moved to different areas and then with the financial capital being able to because of my experience, my education, my network to command higher salaries as well too.

And so what I want RIAs that are predominantly currently still white males, is to have different perspectives beyond just what they've experienced with their own communities and stretch. I had to stretch and it's benefited me. And I think we all have a responsibility to kind of rethink about what is risky for that return. And particularly with changing demographics, we can't afford anymore to remain in our comfort zone.

So it's been extremely rewarding for me to work with these firms under my separate brand, Lizette and Associates and team there. And then also volunteerism. I also have dedicated a lot of time. Time is our currency to many organizations in helping them understand how to engage diversity, equity, and inclusion.

Most recent that I'm still very much involved with was the Association of African American Financial Advisors, also known as Quad Quade, as well as Quada Foundation where we're focusing on HBCUs and the next generation of black advisors who also include those who are at PWIs, predominantly white institutions. And I've worked diligently with the CFP board and FPA and NAFA as well too over the decade.

So the theme for me, a lot of people see it anchored in race and I even had someone on social media saying, is all you talk about is race? And I'm like, well no, that's not all I talk about, but I have to talk about it because it's a barrier to economic capability and strength.

And until that changes then we're gonna still have to work on that because that's what I do as a financial planner. Keep my clients' best interest first and I wanna help firms unleash all this wonderful capital that's underutilized and also not valued as well too.

Taylor Schulte: I love it. Lazetta, thank you very much for joining us today and sharing your story and talking to us about human capital. I'll link to everything in the show notes, including the book, How I Invest My Money, your website, everything. So thank you very much for taking the time today and I would absolutely love to have you back on again in the near future.

Lazetta Braxton: I would love to as well too, Taylor, and thank you for leveraging your platform for diverse voices and being very inclusive with your questions as well too. I appreciate you.

Taylor Schulte: You're very welcome.

Episode Disclaimer: This podcast is for informational and entertainment purposes only and should not be relied upon as a basis for investment decisions. This podcast is not engaged in rendering legal, financial, or other professional services.