One of my big complaints about personal finance media is that it often ends with the basics. Experts will tell you how to pay off debt and start saving for the future; they’ll advise you to save more than you spend and be mindful about lifestyle creep. They’ll recommend you set aside 10% to 20% of your paycheck for retirement and not spend more than 28% of your income on housing. All good advice! But once you cross those to-dos off your list, it’s hard not to look around and wonder what’s next?
Of course, you have a lot of privilege when you get to the point where you’ve checked all of the basic personal finance boxes and you still have money left over at the end of the month. But that doesn’t mean that more experts shouldn’t try to cater to these audiences. And sure, there are a lot of investing publications out there. (Have you taken a peek at the Substack finance vertical? So many bros talking about stocks!) But I’m not talking about Jim Cramer types yelling at me for not buying Nvidia in 2008.1
When I mention to strangers that I write a newsletter about women and money, I’m often asked if I write about investing. Usually, I’ll revise my statement and explain that it’s more about the culture of money (thanks, Alicia, for giving me that talking point). But a long-term goal is to include more education, which is one of the reasons I started Extra Credit. Sometimes, that education will be light and fun, like Heather’s delightful Disney World explainer. And other times, it will be more serious and complicated, like today’s piece about helping our parents manage their money.
Women contain multitudes, and goodness knows our to-do lists include “plan Disney vacation” and “help mom and dad with their retirement plans.”
To tackle the topic of your parents and their investments, I’ve enlisted Wendy Li, cofounder and chief investment officer at Ivy Invest, an SEC-registered investment adviser for anyone interested in investing like big institutions do. She started her career at the investment office of the Metropolitan Museum of Art. The Met is obviously best known for its world-class art collection. But in the investment world, it’s also known for its endowment, which, per its most recent report, totaled over $5 billion.
Wendy says that while working for the endowment, she learned very quickly that the Met Museum invests very differently than we do in our personal accounts. With its billions of dollars and perpetual time frame, the Met Museum is what’s known as an institutional investor, Wendy explained to me. And institutional investors, a group that also includes foundations, hospital systems, pension plans, and sovereign wealth funds, don’t just invest in stocks and bonds. They select investments from across an enormous universe of public and private opportunities.
Prior to founding Ivy Invest, Wendy spent more than 17 years managing multi-billion-dollar portfolios on behalf of some of New York’s largest endowments. In any given year, she and her colleagues would meet with hundreds of funds and investment managers that invested in everything from real estate to oil and gas to venture capital, and plenty of more traditional strategies in between. I find it fascinating to think about how these big institutions invested their money, and how some of those strategies might be applicable in my own life.
Ahead, Wendy dives into the big question of how to help your parents if they’re looking to you for advice on managing their money in retirement. What she shares can also be applied to your own portfolio. She doesn’t shy away from diving into complex topics, but drop any questions in the comments.
I’ll let Wendy take it from here!
(Just a reminder that Extra Credit is for paid subscribers! Maybe today is a good day to upgrade?)
There’s been a lot written about the great wealth transfer, the trillions of dollars expected to move from baby boomers to younger generations over the coming decades. But I haven’t seen much conversation around what I am calling the great wealth responsibility transfer.
