Thursday, June 16, 2022

STC Consulting was invited to participate as an exhibitor at the JP Morgan Chase Wealth summit "Nuestro Futuro".

Thank you, Amanda Dietz, Melissa Vela, and all the team at Chase for inviting me and organizing an impressive event that was designed to promote conversations and resources about financial health and inclusion and provide resources to build generational wealth within the Hispanic & Latino communities in Houston.

It was an intentional and impactful event, with amazing speakers, networking, and workshop breakout sessions.

Wednesday, June 15, 2022

2021 ESG Report Accelerating Sustainable and Inclusive Growth

Author Talks: How to build a damn good business


Written by: Author Talks

Business guidance can hinge on an assumption of existing financial access, making the advice irrelevant to budding entrepreneurs with less privilege. Kathryn Finney seeks to level the playing field.

In this edition of Author Talks, McKinsey Global Publishing’s Kathleen O’Leary chats with Kathryn Finney, founder and managing partner of Genius Guild—a venture capital firm investing in Black-owned start-ups—about her new book, Build the Damn Thing: How to Start a Successful Business If You’re Not a Rich White Guy (Portfolio, June 2022). Finney has done just that: in a business world historically geared toward upper-class, Caucasian men, she worked to become one of the first Black women to have a seven-figure start-up exit. After founding several successful companies, Finney is now sharing her entrepreneurial wisdom. An edited version of the conversation follows.

Why did you write this book?

I wrote Build the Damn Thing because I have read many, many, many business books, and they all made certain assumptions in terms of the type of resources a person has. They assume that we all have access to the same networks and that we can all go into a bank and get a loan. I had never read a book that was written for someone like me who comes from a diverse background, who is a Black woman, who historically couldn’t go into a bank and get a loan, and who had to figure out other ways in which to build businesses.

I wrote this book for the 99.9 percent of the world that aren’t rich White guys, but, ironically enough, I’ve had a number of very, very successful, rich White guys read the book. They love it, too, because they’re like, “We didn’t know that it was this hard. It’s opened our eyes to some things that we didn’t even know about, so when we work with our entrepreneurs, or friends, or our team members, we’re able to have a different perspective that we didn’t have before.”

Was there anything that surprised you in the process of researching and writing the book?

One of the things that surprised me in writing a book was the self-discovery that comes when you’re writing. When you’re putting together all the lessons you’ve learned when you’re doing really deep research on something, it changes you as well.

The importance of family was one of the things that I knew, but it came out even more so in writing the book—how, when you are a woman entrepreneur, a person-of-color entrepreneur, or an entrepreneur who comes from a disadvantaged background economically, you have to rely on your family, your friends, and your community to support you and help you do what you want to do.

Entrepreneurship is hard. It’s not easy. It is tough. It is exhausting. But knowing that you have people behind you who are there to support you, who can do things as little as cooking dinner on a night that you’re just so exhausted—little things like that are really crucial to our success and has been crucial to my own success.

How does your background in epidemiology inform your work as an entrepreneur?

Having the background as an epidemiologist has been really interesting and helpful. How it’s helped me as an entrepreneur is that I understand data—I understand it and I’m not afraid of it because I was trained to understand it, not be afraid of it, and translate it. That’s been really, really helpful for me. I like numbers, and I like spreadsheets, so it’s been really helpful in understanding data, understanding trends, and then translating it.

It has also been really helpful in dealing with people, because as an epidemiologist I’m looking at things at the population level. For example, how does this particular event—in the case of epidemiology it’s a disease, but in business it could be your company or a change in environmental or economic conditions—impact people, the way people move, and the way people react?

Having the epidemiological training has given me a very good foundation for understanding that, understanding people, and understanding their reactions to things. It’s been quite helpful over the past two years in having to explain, from a business perspective, the impact of diseases and other factors that are going to have a continuous impact on us as we build our businesses.

What advice do you have for people looking to bring their authentic selves to work?

One of the ways to bring your authentic self to work is by centering your humanity and other people’s humanity, too. At the end of the day we’re all human beings, right? We’re all human beings in this world, trying to live, and I honestly believe we all want to do our best. Even if we don’t always do our best, we want to do our best, so one of the ways to bring your authentic self is to find a point of connection that is true to you with that other person.

It could be a particular sport or something else, but it needs to be authentic to you. It’s not about them or finding what they like. If they like sailing and you hate water, that’s not what I’m talking about. At times, you have to speak truth to power, even when it’s difficult, even when it may not turn out great for you. I think that’s where having your core values, your personal core values—which I talk about in the book a lot—becomes very, very, very important.

How would you maintain your strength and sense of self-worth amid setbacks?

It really comes from my parents. I grew up with parents who took a risk. My parents left Milwaukee—where we knew everyone and had both sets of grandparents—and moved to Minneapolis. I was a young child at that point. They left everything they knew, took this risk, and it paid off. When you are a young child, particularly when you come from a family that has taken great risk—whether you’re a child of immigrants, whether your family has moved across the country, whether your mom was divorced and raised kids—and you see someone take a risk and then come out on the other side of it positively, it has a big impact on who you are.

For me, I know I can do whatever needs to be done because I was never told I couldn’t do what needed to be done. I saw my parents take a risk and then win. My parents never once told me I couldn’t do something, and as a young Black woman being brought up in a place with possibilities, I had a crazy imagination. I did the craziest things, but they never told me, “That’s stupid. No, you can’t do that,” so I grew up with this belief in infinite possibilities for myself.

As I talk about in a story in the book, a 26-year-old White dude who just graduated from Stanford isn’t going to tell me that I’m not great, because I’ve always been great. Your opinion is not going to change the belief in what I can do because I know I can do it—because it’s been done, and I’ve seen it be done. That’s where it comes from. For those who are questioning, “How do I show up? How do I maintain that?” I always think of a story a good friend of mine, Cheryl Contee, told me.

She said, “When you walk into the room, you’re the coolest person they’ve ever met.” Basically, you walk into a room where everybody’s the same. They’ve been seeing the same Patagonia vest, Bonobos khaki jeans, and Allbirds sneakers all week, and I show up being me. For them, this is refreshing. They get to look at someone different, breaking the monotony of everything else.

It’s about going into that room and making everyone believe you are the coolest person they met that day for the sheer fact that you are probably vastly different than what they see on a daily basis. For that reason alone, you are incredibly interesting to them. You come in with that, and it helps you maintain that strength and that belief in yourself.

Why is it important for entrepreneurs to perform a self-assessment of their core values and define what constitutes a violation of them?

It’s really important to do a self-assessment about who you are and what your core values are because, particularly as a diverse entrepreneur but really as any entrepreneur, you’re going to be challenged. You are going to be challenged. That is part of entrepreneurship, and that’s part of the journey.

You’re going to be challenged to make decisions on things that are questionable, things that may make you pause and go, “Eh, I don’t know about that,” things that may make you question your own integrity. It’s very hard to make a decision if you don’t know who you are and what you value. By knowing what you value, you’re able to see whether this thing that’s being asked of you or your company fits into who you are and your value. The hardest thing—and I know this for a fact because I’ve had to do it—is to say no to something that didn’t sit right.

Friday, June 3, 2022

5 steps to performing a midyear financial plan review


Written by: Shelly Gigante

Summer is the perfect time for barbeques and beach parties, but it’s also a good opportunity to take the pulse of your saving and spending plan with a midyear financial checkup.

With the first half of the year in the rearview mirror, a quick look at your monthly budget can yield valuable insight into whether you are still on track to meet your 2021 savings goals. It can also help identify areas of waste and provide motivation to set new goals. (Learn more: Setting savings goals)

“It is always a good idea to evaluate your financial situation at certain intervals,” said Greg Hammer, a financial professional with Hammer Financial in Schererville, Indiana, in an interview. “If you haven’t met with your professional since January, it’s good to check in midyear and take a deeper dive so we can assess whether your investments are still in line with your objectives.”

The midyear checkup serves another important function, as well: “If you’re in tune with your investments and in touch with your professional, you are less likely to panic when the market starts to correct,” said Hammer. “You are less likely to make emotional decisions that can negatively impact your returns.”

1. Check your retirement contributions

Hammer suggests savers start by taking stock of their retirement plan contributions.

Savers should, at minimum, contribute enough to collect any employer match to which they are entitled, he said. Not doing so leaves free money on the table.

Ideally, you should aim to max out your tax-favored retirement plans, such as a 401(k) plan, 403(b), or IRA, said Hammer, which not only helps to build your future nest egg, but also potentially yields a valuable current-year tax deduction. Take note that Roth IRA contributions provide no tax break for contributions, but your earnings and withdrawals in retirement are generally tax-free. (Learn more: Setting retirement goals )

The annual contribution limit for 401(k) plans is $19,500 in 2021, and the total annual contribution limit for Traditional and Roth IRAs this year is $6,000.1 (That limit is $26,000 and $7,000 respectively for participants age 50 and older.)2

If you don’t have the resources to meet the max, financial professionals often suggest looking for ways to reduce your current expenses. You can also potentially allocate any bonuses or raises you get going forward to your retirement fund. Or, some financial professionals suggest, consider increasing your contributions gradually by 1 percent of your salary per year until you reach your desired goal. (Retirement planning calculator)

Even an extra $200 per month starting at age 30 can amount to roughly $454,000 more in retirement savings by the time you reach age 65, assuming a 7 percent annual return.

2. Tackle debt

Next, review your debt, said Hammer. “The best way to save is by getting rid of debt,” he said. “Is your debt level going up, declining, or unchanged from the start of the year? If it’s on the rise, you need to understand what’s happening with your financial situation and correct your spending pattern.”

Some debt, said Hammer, including student loans and home mortgages, are common and necessary, but credit card balances with double digit interest rates can cripple your budget, especially in a rising interest rate environment. Indeed, most credit cards have a variable rate, which means the percentage they charge consumers who carry a balance is tied directly to the Federal Reserve’s benchmark rate.

“Debt is the worst possible thing to carry in a rising interest rate environment,” said Hammer. (Learn more: Handling debt)

Like most professionals, he suggests consumers with multiple credit card balances tackle the one with the highest interest rate first, while continuing to make minimum monthly payments on any others to avoid late fees. Once that debt is paid, move on to the next highest rate card until you are debt-free. Just be sure you don’t pay for any new purchases with plastic while you’re paying down your debt, he said.

Your debt level is an important metric in determining your “creditworthiness.”

According to the Consumer Financial Protection Bureau, most lenders like to see a debt-to-income ratio of 43 percent or less to qualify borrowers for their most favorable interest rates.3

To calculate your ratio, add up your monthly debt payments and divide that figure by your gross monthly income.

3. How’s your emergency fund?

The mid-year check-up is also an opportune time to be sure your rainy day fund is up to snuff, said Willie Schuette, a financial professional with JL Smith Group in Avon, Ohio, in an interview.

Most financial professionals recommend having three to six month's worth of living expenses set aside in a liquid, interest bearing account, such as a money market fund or savings account, for life’s little emergencies, but you may need up to a year’s worth of expenses socked away if you are self-employed, your job security is tenuous, or your family is dependent upon a single breadwinner, he said. (Learn more: Emergency fund basics)

If you don’t have a fund, or haven’t saved enough, no sweat. Set an attainable goal and start contributing monthly, while continuing to fund your retirement and pay down debt, until you reach your goal.

Depending on your circumstances, you might also consider using these sultry summer days to score a few income-earning gigs, such as housesitting, dog walking, helping people move, painting houses, having a garage sale, or selling bottled water (as permitted by local laws) at outdoor events. With a little creativity and hard work, you could potentially have a fully funded rainy day account before the cooler temperatures descend this fall.

4. Monitor your spending

If your debt level has been stagnant since January or you’re finding it tough to meet your savings goals, put the next lazy day to good use and get your budget under control.

The National Foundation for Credit Counseling suggests consumers, regardless of their financial position, track their spending for at least 30 days to get a better sense of where their money is going, highlight areas of waste, and establish better saving habits.4

“Write down every cent you spend, and then put your spending into categories,” the NFCC suggested in its guidelines on mid-year financial planning. “At this point you can make conscious decisions regarding how you want to spend moving forward.” (Related: Budget basics)

Look for opportunities to liberate cash flow by halting memberships in clubs you don’t use, slashing your cable bill, and swapping one trip per year for a staycation.

Remember, too, that your disposable income (or spending money) is what’s left over after you fund your long-term financial goals, such as saving for a down payment on a house and saving for retirement.

Most financial professionals recommend saving 10 to 15 percent of your annual salary for retirement. That’s easiest done by “paying yourself first” through automated deferrals at work.

If you are consistently unable to save what you need to secure your future, you may be living beyond your means, which means more drastic measures may be in order, including downsizing to less expensive housing.

5. Tackle your taxes

Most of us only pay attention to taxes in December, when it’s too late to implement many of the most effective tax-saving strategies. If you meet with your tax professional now, however, you can potentially still maximize deductions and prevent future penalties.

Specifically, financial experts and tax professionals routinely suggest taxpayers check their withholding to be sure they’re on track to pay what they owe and nothing more. Withhold too much and you’ll get a refund when you file your return next year, but you will also miss out on an opportunity to invest that money for compounded growth or use it to reduce your debt. By overpaying monthly, you effectively give the government an interest-free loan.

By contrast, if you owed money in prior years, financial professionals commonly advise that you should consider reducing your withholding allowances now, which will result in a lower monthly paycheck but may result in either a slight refund or zero tax liability next spring. Ask your human resources department for a new W-4 form to facilitate the change.

Online calculators and tax preparation firms offer basic guidance on how many withholding allowances you may want to take to maximize your tax refund, or your take-home pay, but a tax or financial professional can provide personalized expertise.

Look, too, for opportunities to maximize charitable deductions, begin harvesting investment losses to offset current year capital gains, and spend down your Flexible Spending Account (FSA). FSAs are funded with pre-tax dollars and can be used to help pay for qualified medical and dependent care expenses, but any money not used by year-end gets forfeited.

“It’s a use it or lose it account so if you’re not about halfway through your account at this point in the year start looking for ways to ramp up your eligible spending by scheduling doctor’s visits and making vision appointments,” said Schuette.

Similarly, to avoid a current year penalty, self-employed individuals should be sure they’re making their required estimated quarterly tax payments, and are on track to pay either 90 percent of what they will owe for this year or at least as much as they owed last year, whichever is less.5

The year is still young for retirement savers, borrowers, and taxpayers who are serious about getting their financial house in order. By examining your finances or working closely with a financial professional, you can potentially use the remaining months of the year to maximize your 2019 tax deductions, eliminate debt, and develop a saving and spending plan that will help you meet both your short- and long-term financial goals.

This article was originally published in June 2018. It