Schwabs urge families to discuss money
By Eileen Alt Powell
NEW YORK Carrie Schwab-Pomerantz believes families could do a lot more to secure their financial futures if they would just sit down and talk about money.
Investment expert Charles Schwab and his daughter Carrie Schwab-Pomerantz have written a book titled "It Pays to Talk" to encourage more families to have frequent conversations about money.
"One of our research findings was that fewer than one in three families have frequent conversations about money," Schwab-Pomerantz's father, Charles, said. "It falls between sex and drugs as one of the least talked about topics."
So Schwab-Pomerantz has decided to try to get people talking.
Along with her father, the founder of the Charles Schwab & Co. brokerage, she's published "It Pays to Talk How to Have the Essential Conversations with Your Family About Money and Investing" (Crown Business, $24.95 hardcover).
Schwab-Pomerantz is vice president for consumer education of Charles Schwab & Co. and founder of the Schwab's Women's Investing Network.
Schwab acknowledges that getting conversations going can be difficult, especially if you're dealing with an elderly parent. He admits he found it almost impossible to broach the subject of money with his own father.
Schwab and Schwab-Pomerantz discussed their new book in an interview with The Associated Press.
AP: When you were growing up, was money something you discussed at home?
SCHWAB-POMERANTZ: We were a pretty typical family. My dad was what I would call a struggling businessman. I don't know if he likes to remember those days. It wasn't until I was in my early 20s that Schwab became a successful business.
I think he taught us a strong work ethic. I had a paper route when I was about 12 years old. I started working at Schwab when I was 16, and that's when I had my first real office job.
And he taught me the discipline of saving. I started saving when I was 9 years old.
AP: Don't you think people are more willing to talk more about money these days?
SCHWAB: I think there's more conversation, generally speaking, today about investing. The 401(k) (retirement account) has become so popular with families. Certainly the down market has increased the conversation to some degree.
SCHWAB-POMERANTZ: There is definitely what we call "stock market chatter."
But it's not really personal, candid conversations about your priorities, your goals, your values, where you're ultimately trying to go with your life. Talking about the hot stock is not the same as really understanding your whole financial picture.
As we saw through the Enron case, there is a big, big need for education. And it's not happening in schools, so it has to happen in the family.
AP: How do you get those money conversations going?
SCHWAB: With my father, it was so difficult. It was taboo. He never talked about it.
He was a successful lawyer in a small town. He saved and invested through his lifetime, but he lived longer than he ever expected to. He was just about 70, and he was also falling into a medical situation, a severe depression situation. I think it was related to his whole insecurity about money.
He was living longer, his wife was still alive, he had a dependent child who was older, a daughter who needed help, and it was depressing him so much.
Finally, I said, "Dad, can we talk about this? Can I help you with my sister?" I didn't talk to him about his income tax or any of that stuff. The relief that came to him when I finally had the conversation, and the agreement that I would do a number of things to help out, it was such a nice gift to him. And everyone was a winner.