Heroines of Personal Finance and Entrepreneurship #6: Barbara Stanny

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Interview contributed by Cody McKibben

Barbara StannyBarbara Stanny is a powerful speaker who has devoted herself to transforming women’s relationship with money. She is the author of five books about personal finance and women in business, and working on a sixth! Barbara is the daughter of the late entrepreneur and philanthropist Richard A. Bloch, who co-founded H&R Block with his brother Henry in 1953. But her experience with her father and financial tragedy with her husband led her to make it her mission to empower women financially. She has since interviewed hundreds of women who make over six figures, taught innumerable clients how to get out of financial burden, and she even recently spoke at the WomenLead 2007 conference! Barbara is full of a lot of financial experience and wisdom. In the interview that follows, she shares a few great principles — in detail — and how you can apply them to your own financial life. Her answers are sure to both inspire you and surprise you.

Tell us about yourself and your background to start off. I’m curious how your father Richard influenced your financial education growing up?

I grew up wealthy, the daughter of the R of H&R Block. My father (being a product of his generation) truly believed that making and managing money was a man’s job. The only financial advice he ever gave me was “don’t worry.”

Now you’re someone who’s devoted much of your life to empowering women financially. You’ve said that financial enlightenment demands far more than just picking up a few facts here and there and buying a few stocks. Tell us about the psychological challenges that exist for women to reach financial competency.

I am convinced that the reason the vast majority of women are not protecting themselves financially, even though they know better, is because the Prince Charming Syndrome is alive and well. Prince Charming doesn’t need to be a man…it could be anything you think will save you…the lottery is a popular example. In order for women to get past their passivity and ignorance around money (they may be doing a little bit, but not saving/investing nearly enough), they must deal with their emotional blocks, limiting beliefs, irrational fears, and early decisions they made about themselves and money.

Your journey from financial dependence to independence was a defining transformation for you. How did that come about?

It came about because my husband was a compulsive gambler who lost a fortune of my money. After our divorce, I got tax bills for over a million dollars for back taxes he didn’t pay, illegal deals he got us in. I didn’t have the million dollars. My husband had left the country. My father wouldn’t lend me the money. I had three young daughters…I was not going to raise them on the street. That was the moment I knew I had to get smart about money. I had no idea how I was going to do it, but a miracle occurred. As a journalist, I was hired for a freelance writing project to interview women who were smart about money. Those interviews literally changed my life.

Right. For Secrets of Six Figure Women, you interviewed over 150 women who earn between $100K and $7 million a year. What lessons did you take from that experience?

I was a classic underearner. But I started earning six-figures before I even finished writing the book. The three biggest lessons were how critical it is to:

  1. Have a profit motive;
  2. Truly value yourself;
  3. Be willing to be uncomfortable, to do what you don’t want to do.

What things did these high earners have in common, and how can female readers of IWillTeachYouToBeRich apply those things in their own lives to see their earnings increase?

I saw the exact same strategies show up in each and every one of the High Earner’s stories. Seven years ago, I began teaching a workshop based on what I learned from those women. My third book, Overcoming Underearning: a 5 Step Plan for a Richer Life, is based on over 200 interviews with women (and men) who had been through my workshops and saw a significant increase in their earnings. The steps are:

  1. Tell the truth about what’s not working in your life, even if you don’t have a solution in sight;
  2. Commit to making a profit;
  3. Stretch, by doing what you’re scared to do;
  4. Surround yourself with supportive people, and eliminate the naysayers from your life;
  5. Respect and appreciate money by taking care of it. How? By following the 4 Rules: Spend Less, Save More, Invest Wisely, and Give Generously…in that order!

For your new book Finding a Financial Advisor You Can Trust, you say that money management can be overwhelming and how some people don’t have the time, knowledge, or skills to do it themselves. Explain your thoughts on this. Do you think most people can (or even should) be empowered to manage their own finances, or do you recommend a little more hands-off approach for some individuals?

My biggest surprise when interviewing financially successful women was how few of them were actually wealthy. In all my research, I have found that the women with the highest net worth were not necessarily the ones who made the most (or inherited it). They were the ones who worked (at least at some point) with financial advisors…and most had a team of professionals they consulted (i.e. estate lawyer, accountant, investment advisor, financial planner, etc.).

You also contributed recently to Breaking Through: Getting Past the Stuck Points In Your Life, and you worked alongside several fantastic female authors, leaders, and role models. Tell us about just a few of them and what you learned.

Breaking Through is an anthology. I contacted over 60 professional women with this question: How have you gotten past the stuck points in your life, or how have you helped others? I was so impressed with their responses…and I learned that 1) stuck points are inevitable, 2) stuck points need to be respected rather than resisted, and 3) stuck points have a purpose…they actually force you to grow. Often, just past the stuck point lies a significant breakthrough.

Any last thoughts you’d like to share?

I always thought the whole point of financial success was to have more money in the bank and greater security for the future. And indeed that is important. But what I learned from the women I interviewed, it wasn’t just how much money they had…it was what they were doing with their money once they felt financially secure and empowered. They were using their money to make a difference in the lives of people they loved, in causes they felt passionate about. Having an impact, I began to see, was the ultimate reward for creating wealth. Philanthropy is where the real fun and power lies!

I want to thank Barbara so much for sharing some of her very valuable time with us, and for the many ideas that we can apply to our own lives. Learn more about Barbara Stanny and her books, workshops, and coaching at BarbaraStanny.com, and keep an eye out for her next book, Women, Wealth, and Power.

Cody McKibben is a leadership blogger, web designer, and career instigator in California. He writes regularly at THRILLINGheroics.com.

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16 Comments

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  1. [...] post by Freelance Writing Posted in Finance Blog | Trackback | del.icio.us | Top Of [...]

  2. I have her book, love it love it love it !

    A lot of women simply do not negotiate raises and therefore they are stuck with there incomes. As a women I always push myself for more

  3. “4 Rules: Spend Less, Save More, Invest Wisely, and Give Generously…in that order!”

    Hm, not a very heroic thing to hear – my hero would put giving generously first (and still be smart about the next 3).

  4. I am a classic underearner. But now I am also an aging boomer. Even if I somehow shed my “underearning” persona, at my age, and with dead-end job history, could I earn a real income?

  5. Nichole– be realistic. It’s noble of you to want to put contributing first, but one has to make sure that one can cover one’s own bases– lest one becomes the recipient of such gifts.

  6. It makes sense to ask for a raise yearly, right? I have no problem negotiating a pay raise and being quite clear in what I expect and why I expect it, but trouble is simply knowing WHEN is a good to ask. I’ve been working for this very small company (6 employees, including the 2 owners) as a freelance employee on and off for 3 years, but I just started working as a full-time staff employee about 9 months ago. I make a pretty good amount of money, but I am doing more work now than I did when I started. And, you know, I can always use some more money. :) Since it’s such a small company my boss(es) are almost always available (i.e. they’re not unattainably locked up in their office all day, every day). Everyone in the office pretty much works together, face-to-face, on a day to day basis. So… how do I know when it’s a good time to start negotiating a pay raise?

  7. Thanks for the comments guys! Glad you’re enjoying this interview. I personally thought Barbara was full of great actionable frameworks.

    @nichole – I agree with S. Bruce; one must first live within his means and then save enough, before he is able to give back. It doesn’t mean you don’t VALUE giving more, but you must spend less and save more before you can share with others, in my opinion. I think it is wise of Barbara to tell readers to think this way.

  8. I am so thankful for this series focusing on women. I am probably one of your older readers (about to turn 35 and an admittedly late bloomer) . Having followed a supposedly more altruistic route in my 20s, it wasn’t until about 2 years ago that I finally realized that you can’t really help others if you’re not in at least a somewhat stable situation. I continue to learn from you and appreciate the knowledge shared!

  9. I really think she’s right on target with this list:

    * Commit to making a profit;
    * Stretch, by doing what you’re scared to do;
    * Surround yourself with supportive people, and eliminate the naysayers from your life;
    * Respect and appreciate money by taking care of it. How? By following the 4 Rules: Spend Less, Save More, Invest Wisely, and Give Generously…in that order!

    Nice helpful interview…even for a guy!

    Will

  10. I earn my state minimum wage and am paying off debts (student loans + business startup which failed when my health failed and I was in extended hospitalization) at the rate of almost $300/mo.

    How am I supposed to spend less than I’m spending now?

  11. I *love* how she claims that doing all these interviews taught her all these valuable lessons. I think she meant that she made six figures doing the interviews. I mean, come on people, you’re seriously falling for this crap? I’m SICK TO DEATH of all these feel-good stories about how the rich have fallen and risen (it’s who you know, often). How about some REAL stories? You know, stories about folks who STARTED OUT POOR, and found their way to wealth through hard work? All we ever hear anymore is about how someone comes up with some fascinating idea, and makes millions from it, or they’re rich from the start and commended for their “contributions”.

  12. Dave, thanks for the comment. Let me know if you’d be interested in doing some Friday Entrepreneur interviews with interesting people. If they’re good, I’ll feature them on the site.

  13. Thanks, Cody, for publishing the interview. I’d love to hear what readers think about my comments.

    Barbara Stanny
    http://www.barbarastanny.com

  14. Thanks to everyone for your comments. I want to respond to Dave. Actually, Dave, I interviewed quite a few women who grew up poor, worked in low paying jobs, were classic underearners, or never worked at all. They are stories about reall people. ANd I didn’t make six figures from writing the book…I made it before the book ever came out, by following the strategies I learned from these women.

    Barbara Stanny
    http://www.barbarastanny.com

  15. Thanks for the simple, helpful, straightforward tips. :o)

    Dave, can you clarify your definition of “real stories” and how they’re different from the “fake” stories you’ve been reading? The lessons in this interview seem applicable regardless of your current state of wealth. Most of the sound financial advice I read (including on sites like this) is about “hard work”… practical things everyone can do to achieve financial success. By “hard work”, do you mean a job, as opposed to “some fascinating idea” being something like entrepreneurship? That seems like a completely different discussion. I’m not sure what you’re saying. :oP