‘Money Is the Thing That Buys You Your Future’

Mashable editor Heidi Moore weighs in on the student loan crisis, ‘Pretty Woman,’ and more

Heidi Moore is a veteran of Marketplace, the Wall Street Journal, and the Guardian who swears she’s been a huge fan of Alexander Hamilton since she was 16, well before it was cool. What follows is a condensed and edited version of our conversation.

Talia Jane’s Yelp story continues to blow up. Are you mostly sympathetic to her, or were you mostly sympathetic to the commenters saying “Suck it up, what’s the matter with you”?

I was sympathetic to her in the sense that this was a very real struggle she was going through. The fact that people can’t be sympathetic to that is stunning. I think it was probably made worse because she was a woman and people are so used to condescending to women.

There’s this myth that she just had to fix the situation, like there was some obvious thing she could be doing. That’s not how people get into these situations.

Did any part of it make you cringe?

I was surprised at how much rent had taken up of her salary. That was extreme. It has something to do with that rental market.

Yeah, 80% does seem crazy, even for San Francisco or New York.

That is very high. People say 30% and you can probably, even in NYC, get it to less.

How much is it for you?

I own my apartment. I just pay a common charge, maintenance fee. I bought it 13 years ago, so it’s paid off.

Wow! Was that the best financial decision you ever made?

I have to say it was, and I can’t take credit for making it. It was my mom’s idea. She pushed and shoved and dragged me into buying. I thought it would be cool to continue renting and live in neighborhoods I wanted to live in. Buying involved living in a neighborhood I wasn’t so keen on but which now is really taking off.

Is it in Brooklyn, or Queens … ?

Jackson Heights. I love it actually. But this was 13 years ago: not only before the housing bust, it was before the housing boom. So it turned out to be a good time to buy. That was a very wise decision. I had been saving up my money on her recommendation and obviously that ended up being a really good thing to do. Having a small mortgage and maintenance was just much more manageable over time. But I don’t know how people would do it today with the way that prices are, even in Jackson Heights.

What are the other financial decisions you’ve made that turned out really well?

I think that was by far the best. I think creating a spreadsheet to pay off my student loans was the other. I didn’t have the large amount of student loans that nowadays people regularly graduate with, but I did have some, and I really wanted them to go away. When I confronted them and created a spreadsheet, and aggressively paid them, and ended up paying them off — I think maybe that was the happiest day of my life. Including closing on the apartment. It was great.

If you decide to tackle it, then it becomes easier; and also, I was in a position to be able to do it, so I’m sympathetic to how a lot of us are not able to. Especially now, when people owe like $200,000.

College seems to be a really hot button issue right now in this political campaign. I was curious what your thoughts were about the whole Bernie Sanders’ “free college” idea, which some people are criticizing as a pipe dream.

It sounds like Senator Sanders’ plan is one that seems to be rooted in the kind of idealism we all wish we could take toward this subject, which is incredibly difficult.

I think the key issue here is: What do you have to trade away to get an education? Is it money, is it time, is it labor? It doesn’t seem like we’re any closer to answering that, so anything that we come up with — because there’s been no meeting of the minds — is how can we extenuate the circumstances. How to make the payments possibly less, or how to make the use of your time to pay it back more bearable.

What do you have to trade away to get an education?

But that doesn’t get us to where the key problem is, which is very much at the university level, with universities hiking up the cost of tuition far beyond inflation. Anything we do to make it more “affordable” isn’t going to work, because it’s just a stop-gap.

In terms of where university spending is going, that’s something that students and parents should be taking a look at almost in the form of shareholders. You will be paying a lot of money to the school. I’m surprised that there isn’t more of a push from the parents on, “How are the schools treating adjuncts? How much of the budget is going to true education, and into making sure the students are learning and well taken care of?”

Now we kind of think of it as, You go to college, you get a job, you pay off your loans, you have a kid. But there’s a whole other level of achievement that Silicon Valley, for example, prides itself on: “What are you going to do to improve the world that we live in?” Education should help you do that. Not just through reading and understanding what happened in history but in motivating you to solve problems. I hope we don’t give up on that.

If we don’t allow a level of education or vocational training that is available to people of all classes, then we are giving up on that. We are getting ready to stagnate. And we’re not coming up with any solutions except, “Here are a few interest percentage points off …”

I think people are dismissing Senator Sanders’ plan as fanciful because it’s a big solution to a big problem, instead of nibbling around the edges, which is I think what everyone is more comfortable doing.

The New Deal came out of a president and his supporters understanding that something was fundamentally wrong and needed to be fixed. We’re not at that place yet with student loans, which I do believe are a crisis. It’s mainly a campaign issue and it shouldn’t be. It should be a societal issue, a political issue. It should be something we’re thinking about all the time.

I do believe student loans are a crisis. It should be a societal issue, a political issue, something we’re thinking about all the time.

What will it take?

To fix it? I ask myself that all the time.

Not even necessarily to fix it, but to recognize it needs to be fixed.

There is a strain of thought that says, “You can’t waste a good crisis.” Usually you find that a lot of things change after a crisis. I’m a little bit disappointed that after the Financial Crisis we ended up with legislation like Dodd-Frank that didn’t accomplish very much at all. So I’m reluctant to say that it will take a crisis. But we are at a point where a tremendous amount of student loans aren’t being paid, and there are institutions “waiting” for that payment. Those defaults are going to have a lot of effects of the next few years. The question is, Will the effects pile up to a point where they are impossible to ignore?

I think it’s fashionable to knock Occupy but I think the effects are undeniable in the discourse we now have about the financial system. It’s been constructive.

The reason that bankers went into banking most recently, in this generation, is because of the prestige, right? It was a side of the professional class where you would be admired and you would make a tremendous amount of money, more so than the other admired professions like doctor or lawyer. You see a lot of immigrant bankers. I think the view of bankers as one kind of privileged person ignores how many people from striving homes went into that industry for the prestige, and because they thought they would make money.

Obviously they wouldn’t like it if the money were taken away — and by the way it has been — but they also didn’t like it when the prestige was taken away. That’s a thing that Occupy did. You don’t see that Masters of the Universe swagger you would see. I think that was a huge cultural change.

Obviously banking has continued. I’m not convinced at all that it’s made unethical practices impossible or less prevalent in any way. I think that’s what people were hoping for, a moral redemption from the financial crisis, even more so than a redemption of process. And there’s no redemption arc. It’s a very dissatisfying story. In Shakespeare you’d call it a problem play. There’s no good guys.

If you look at how the mid-20th century looked at bankers versus how we look at them now: Mary Poppins, It’s a Wonderful Life — there’s a very specific view of bankers on display. How we got from that to Gordon Gecko as a society in a generation or two …

On Wall Street, Gordon Gecko is genuinely a hero. I cannot emphasize this enough. Even after Gordon Gecko, that pendulum swung very rapidly towards a glorified view of finance. He was completely upfront. He saw the weakness in the system and he exploited it. And he said, “Don’t get mad at me, get mad at the system.”

I think that they see something heroic. A lot of high finance banking and law, as people see it, is about the creativity of finding loopholes that other people haven’t noticed and making them work for you.

Gordon Gecko’s DGAF attitude … it’s like a Rorshach test or, if you prefer, like Rashomon. It’s about, “What stories do you want to tell yourself about the world we live in?” The problem is we all tell ourselves different stories to get through the day. And money is a story. Money is an emotional story that we tell ourselves, and it’s tied into politics, finance, how we see ourselves.

Money is an emotional story that we tell ourselves.

I want to go back to movies. Pretty Woman is about a woman who gets saved by a heroic private equity raider.

I can’t stand Richard Gere’s character. He’s supposed to be the hero. They gave him another foil in the form of Jason Alexander so that he didn’t have to be the bad bad guy, that he could sort of have the redemption arc and Jason Alexander could be kicked to the side. But really it’s because Jason Alexander is short and fat and bald. Richard Gere, like Michael Douglas, being taller with a full head of hair, is someone we could walk out feeling good about. But there’s not much difference between Richard Gere and Jason Alexander in the movie.

They’re on the same side. That story is about the moral redemption arc. She redeems him. She’s basically the Manic Pixie Dream Prostitute.

You know the original ending was very dark?

They left each other —

[in unison] Because that’s how it would really happen!

He wouldn’t even go to downtown LA. Although it was a rich man’s quirk, even then. If you go back to the beginning, he’s living this soulless life. He realizes he can buy the best of everything, and he does, but he doesn’t enjoy it. He needs to feel something.

I think the truest thing in [the movie] is that Jason Alexander thought they had a friendship and Richard Gere says, “We were never friends. You never liked me. I just made you a lot of money, and it was the money you loved.”

You’ve seen this movie more recently than I have. I should go back and re-watch it.

That scene where she walks into the store: “Big mistake. Big mistake.” That’s a profound scene about the consumer experience.

I think her big coup, her big negotiation coup, is asking for marriage. In the 1800s, they used to call a woman’s career her love-life. If you had a brilliant career, it was that you had married well. Fast-forward to 1990, and that’s the story you get from Pretty Woman. Everything she has she gets from someone else. She never really fends for herself, even though she’s supposed to be independent.

Also, Working Girl! She’s a hero for getting to the top in finance. The way she gets there is really interesting. The life hack she figures out when they crash that wedding and she’s able to pitch her idea is that, to make money, you don’t need a special skill or talent; all you need to do is have the people who have money accept you. And she gets that, and she works that all the way to the top of Wall Street.

I think that film ends on a sort of problematic note because even though she ends up at the heights she looks out that window and that is a very cold view. She is surrounded, boxed in. There are a lot of boxes in that movie.

On a completely different note: I went back and reread the interview you did with Logan. You told her that you didn’t use credit cards. Is that still true?

I’ve had to relent. I did not, at that time, at all — and I didn’t need it, right, because I had my mortgage and student loans all settled and whatever, so that was no problem. But I have gotten a few store credit cards because I like the discounts. You can get pretty good deals.

So you don’t have a MasterCard, but you have, like, a Bloomingdales card?

It’s J. Crew and Ann Taylor, but yeah. You get these amazing deals, so that something you would have bought anyway just becomes that much cheaper. Why would you pay more for it?

But where do you draw the line? Every time I look at Amazon or JetBlue, they say, “Hey, you could get so much if you just got a credit card with us …” How do you decide?

There’s a book I really like called Money Drunk, Money Sober. It asks you to take a look at your emotional pattern with money. I found it so profound. It has these four personality types: are you frugal to a fault? Are you the opposite way, spending a lot to compensate for the various discomforts in your life?

I think the idea of addressing money as an emotional issue is something we haven’t really addressed in personal finance. The story that has become very fashionable, especially for women, is “I deserve it. I have suffered in the following ways so I am going to engage in retail therapy.” And there are things we spend our money on purely to make ourselves feel better about how disordered our lives are.

There are things we spend our money on purely to make ourselves feel better about how disordered our lives are.

In New York, it’s a cliche that you will eat more take-out. If you look at that, and the enormous chunk it takes out of your budget — and that’s a struggle I still fight, the take-out struggle — but if you look at that, that’s about spending money on food because you have not made room for self-care. You have to evaluate your life. “Why am I spending this money?” is a question you should always be asking, that I ask myself. Sometimes I get it right, sometimes I don’t. But when we’re spending on take-out, it’s because we haven’t made room for ourselves to be able to cook for ourselves. We don’t have that time, because we’ve spent too much time at work or on other things, so we have no energy to cook.

In the end, money is freedom, right? Money is the thing that buys you your future. So convincing you to give up a portion of your future for your present is a very interesting, novel trick that the ad industry has mastered.

Convincing you to give up a portion of your future for your present is a very interesting, novel trick that the ad industry has mastered.

I think the “Here’s why you need to spend your money thing” is toxic, so I don’t do it. I think, “Do I really need it?” There’s been a lot written about how you can evaluate a deal. Like, “You can save more if you spend more?” That’s untrue. If you spend more, you spend more. The actual dollars are gone. I like to think in terms of actual dollars. That acts as a natural stop-gap.

That’s not to say that I don’t spend money on luxuries — I do. But they’re the ones that I feel will bring me some sort of return. If I get that equation wrong, if I spend money on something that I think will make me feel better and it doesn’t, then I really feel guilt — because I misread myself.

It’s really hard because money is always asking you to weigh your current self against your future self —

And choose which to prioritize.

I always give to homeless people. I know some people don’t, that there’s a strong belief you should give to organizations, and I do that as well, but I also think, if someone’s on the street, they’re suffering, and that dollar, which is meaningless to you, isn’t to them. The emphasis of that dollar is different put to another use.

You can drive yourself crazy.

But you don’t have to get it perfect. You just have to get it good enough — so that you can live with yourself and, you know, plan for retirement.

Exactly.

Sponsored by SoFi, The Future of Money is a series of stories that explores a world in which banks no longer control our finances. Learn more at SoFi.com.

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