2X Wealth Group: Investment Management Catered to Women | Lori Zager

“2X Wealth Group: Investment Management Catered to Women”, Lori Zager Transcript, Interview by Alan Olsen, Host of The American Dreams Show:

Alan Olsen: Welcome back. I’m here today with Lori Zager. She is the co founder of the 2X Wealth Group which is a subsidiary of Ingalls & Snyder. Lori, welcome to today’s show.


Lori Zager: Thank you.


Alan Olsen: So for the listeners, can you give me your background of how you came to where you are today?


Lori Zager: Well, it’s something that I’ve always wanted to do. I am a woman and the two x’s actually stand for two X chromosomes. We’ve had a number of different suggestions about what the two x’s meant. In fact, I was at a dinner party a couple of months ago, and someone a woman said to me, “oh, what do you do?” And I said, Oh, I started a wealth management business. And she said, “Oh, really? What’s it called?” And I said, it’s called 2X Wealth Group. And she said, “Oh, I get it. I have one of them”. I said, You do? What do you think it stands for? She said, “two ex-husbands”. I said, Oh, my that would be quite a small market, I think. But the two x’s stand for two X chromosomes. And the theory is that we wanted to focus on women. And the reason why we wanted to focus on women is our research shows that about 80% of women at some point in their lifetime end up being the only one responsible for their own finances. And women know that, but they’re so busy taking care of the needs of others, that they don’t often focus on it, or maybe it’s just a division of labor. But we find often, in heterosexual couples, that it’s the man that does the heavy lifting on the financial side, and the woman if they’re divorced, or widowed, or maybe never married, maybe never learned. And unfortunately, when there’s some sort of a problem or a crisis, that’s not the best time to learn how to do things. So, , I felt like that I was unique in that I was lucky enough to have, as I used to say, played with the “big boys” on Wall Street. I knew finance and I wanted to help other women. So it’s something that I wanted to do for a long time. And I had an opportunity to do it, met a woman who I partnered with who also had an institutional background. And we decided to launch 2X Wealth Group, teamed up with Ingalls and Snyder, who was someone I knew for a long time. They’re called me and asked me if I would join them. And they’ve been really wonderful at helping us launch this effort.


Alan Olsen: Starting a business is never easy. There’s always this unknown venturing into a different business model and getting contacts and sets. But how did it feel when you got your first client? Did you have it from day one? Or is that something that you had to go out and develop?


Lori Zager: The first client was someone who I had known for a very long time, and she really wanted to support our effort. I knew her parents actually and so it was kind of a familial thing, if you will. And she was really excited to be the first client. And it was really outside the box for her because she is not someone who forges new paths, but she felt like she knew me. I had looked at her portfolio before and had given her several suggestions, which had turned out to be quite good suggestions. So she had a little bit of a background, knowing that I had done this and, and had given her some good advice in the past.


Alan Olsen: And how big is the group right now?


Lori Zager: Well, we are we’re just we’re very small. Ingalls, itself has over 6 billion under management, but we only are in the 10’s of millions. So we’re not anywhere close to them at this point. But we only started taking money, I guess, a little over about a year and a half ago. And so it’s been a huge learning experience.


Alan Olsen: Are you limited into California?


Lori Zager: No we have clients on the East Coast as well as in California. Again, it’s word of mouth, somebody that knew us and recommended us. And it’s not just women by the way that we’re focused on, we focus really on anybody that doesn’t have a financial background, and really wants to learn and understand finances and how they’re invested. And, and that’s who we want to help. So we have small institution, we just got couples, all different kinds of people. And it is, like I said, anyone in the country that that needs our services.


Alan Olsen: Can you walk us through the process when a new client comes to you and how do you help them evaluate their financial situation and goals?


Lori Zager: Well, we spend a lot of time trying to get to know our clients, we also give them a risk tolerance test. We use something called Financial DNA. And when you take the test, you would think, oh, my goodness, what does this have to do with anything, but we found it to be actually pretty accurate in understanding risk tolerance. So we’re trying to understand all kinds of things. We’re trying to understand how much money they have, we can’t predict life expectancy but we model things, model women living until 95. But maybe there’s illness in their family, so that might change something we look at. How do they feel about taking risk? We look at whether are there people dependent upon them? Are they going to continue to work? Are they expecting an inheritance? They’re just a host of different factors that we have to look at. Do they own a home? Do they anticipate owning a home in the future? Are they planning to move? We have a client that is planning to move to a state that doesn’t have taxes. So you have to take that into account? Do they want to live the same lifestyle that they’re living now or do they when they retire? Or do they expect that they will not be living the same lifestyle, so there’s just enormous amount of information that you have to gather when you first meet a client, and the more information that you get, the better job you can do in helping them reach whatever their goals are?


Alan Olsen: It must be hard in today’s economy, and, with the volatility of the markets and the changing of the technology to really stay ahead of the curve. How do you do it?


Lori Zager: We spend an inordinate amount of time reading and researching and learning and studying and you just can’t stop. And that’s what we love. My partner and I are both avid learners. And you have to be and you also have to understand history. I spent a vacation reading about the Weimar Republic recently, somebody saw me on the beach reading that thought I was a little crazy. But you have to understand history as well as continuing to keep current on what’s going on in today’s time.


Alan Olsen:Where do you see that the markets going?


Lori Zager: Well, over time, I think the market the stock market is a great place to be and it’s really been the way to make money. One of the things we do is try to teach investors that are risk averse about things like the stock market. And if you go back and look, we’ve got charts going back to 1906, you can see that you really couldn’t much keep up with inflation with anything except for stocks. But the volatility can be gut wrenching. And that’s really the problem. So I would say over the very long term, I think that markets will be higher. And we’re certainly getting a little gut wrenching today. And there’s some concerns out there. I, more than others are quite concerned about the level of debt in this country. And we have been growing our debt with relatively good economic times. So I worry that in the next recession, we’re going to have, it’s going to be tougher. So and I do worry about the bond market. Will the bond market do something that it has not traditionally done and not help you in the next recession?


Alan Olsen: I imagine you help all sorts of types of individuals, how do you handle that wide range and keep people happy?


Lori Zager: Well, I can tell you, I’m not always so successful. I had a recent situation where a physician who worked with my husband sent me a article from a retirement newsletter, a Kaiser retirement newsletter, about a doctor who was worried that when he was gone, he wanted his wife to be able to take care of things. And he pointed out in this request that he did all of the finances, and that he wanted her to learn QuickBooks, or Quicken so that when he was gone, she could take care of things. So I wrote him an email back and told him that I was very familiar with Kaiser and Kaiser benefits because of my husband, and that I would love nothing more than helping someone in the Kaiser Family. And explained that I had started a business specifically focused on women so if anything happened to their husbands, I would be there to help them be someone that she trusted. And to please let me know if I could visit with them. And he wrote me a letter back an email back and he said, “Oh, no, no, no, I don’t want financial help. She just needs to learn how to use QuickBooks.” And I felt like saying to him, okay, I’m going to come to you, the doctor, and I’m going to say, just quit the bleeding, I don’t care where it’s coming from, just quit it. Because if something happens to him, she’s going to have a lot more problems than just learning how to use QuickBooks. And it’s, it was so funny, because on one hand, he got that he may not be around forever to do these things for her. But I think he really miscalculated the scope of what was going to be needed once he wasn’t around.


Alan Olsen: Do you help people think beyond just finances and life planning?


Lori Zager: Oh, absolutely. I mean, one of the questions we ask when people come in, and they, show us what they’re doing and what they’ve saved in their 401k plans, and their their company stock, restricted stock units, etc. One of the things we ask them, Do you do you like your job? Because if you don’t like your job, really a lot of this can change? Or how secure do you think your job is? Also we had a situation recently where a woman came in and she has wanted to buy a house for a very, very long time and had looked at hundreds of houses. And I had had a conversation with her early on, and she let me know that for her, the house was a financial asset. I tried to explain that houses are very different stocks. One share of J&J is no different than another share of J&J, but a house is different. And I said that most people really don’t think of a house as a way of investing that if you wanted to do that, you should maybe think about investment property. And this woman had managed to both to lose money on a house in Marin County, and she didn’t buy at the top, and she didn’t sell at the bottom. So I was kind of confused on how she did it. But she had actually over improved the house. So when she came and wanted to buy another house, this was about four or five months ago, pretty much at the recent top of the market and she was going to do it by partnering with someone that she was not in a relationship with, to be able to pay for it. And I just said to her, this just doesn’t make any sense to me, you’re about to get yourself into another situation. If you were going to live there for a long period of time, that’s a different story, but that’s not what you’re talking about. And I was worried we could have the same old scenario, again, that she was going to lose money on a house for a different reason, because there’s a falling out with this person, and they’d have to sell the house at a bad time. And here we go all over again. So here are examples of some of the things we try to think about. We’ve helped show children that are going to inherit money, think about the best way of trying to teach them about money. Because that’s really important. It’s like anything else, if you don’t learn about it and understand it, how do you know what to do with it? So there are all kinds of ways that we try to do that.


Alan Olsen: What does it mean to be under invested?


Lori Zager: Well, most people understand that when markets go down, they feel awful and they lose money, but they don’t understand the concept of, of not having enough money in markets. And I alluded to something earlier in our conversation about how over time, the only way to have really made money is to invest in stocks. And if you look at short term bonds, they haven’t kept up with inflation even over time. So people understand that $1 today is $1 tomorrow, but what they don’t think about is what $1 today buys, $1, tomorrow may not buy. And so I think that keeps them unwilling to invest in things that have more volatility, like stocks, but really are the only things that can help you over long periods of time. And as a result, many people have too little money in the stock market. And if you look at bond yields, which is the interest rates, the bonds pay, right now we’re back to what they were paying in the 1930’s. And so many people cannot afford to, to retire, because they just haven’t earned enough on their portfolios. And the way to increase that earning is or is to increase the percentage of equities, but you must be able to live with the volatility.


Alan Olsen: It must be difficult trying to coach a person through how much is enough, how would you address that?


Lori Zager: What people used to say is that you can withdraw 4%, and that if you withdrew 4% of your savings that you would probably have enough to live on. Nowadays, that’s probably too high a number for two reasons. So what I told you about bonds, depending on how you’re invested, if you invest more aggressively, it’s possible that you could withdraw it, and the returns are probably going to be lower going forward, even in stock markets given where we are in the world.


Alan Olsen: I think one of the big things is discussed days are large demographic trend, how is that going to affect our markets?


Lori Zager: It’s a problem. And actually, we’ve talked about it in some of our blogs. It’s a problem, in part because we don’t have workers. And you can decide whether you want the border shut down or not, but the fact of the matter is, as you say, we’re not replacing ourselves in the United States. So if we want to look in the mirror, we can look at Japan, as an example. We’re further behind them. And there are all kinds of consequences to this. One of them is if we don’t have the workers, at some point, you would think that wages would go up, and that’s inflationary. And so that’s problematic. You have a smaller group of people taking care of all of us as we get older. And that’s a problem. So, there are there ways to solve it. But we may have to decide which we are more comfortable living with. And I’m not going to play politics here. I don’t know, I’m just pointing out that. If we don’t either start having more children or start letting more young people into our country, we’re going to have problems.


Alan Olsen: A person that is in the market for a new financial advisor, how would they go about contacting you?


Lori Zager: Well, the best way is to go to our website: www.2xwealth.ingalls.net We also write blogs, we talk about how to find a financial advisor, questions to ask a financial advisor, there’s all kinds of useful information on our website.


Alan Olsen: Is there certain sweet spot of market assets under management that you’d like to focus in on?


Lori Zager: We have a minimum of a million dollars in assets under management? So that’s a minimum.


Alan Olsen: When a person comes to you for introductory meeting, what should they bring to the meeting?


Lori Zager: We really don’t do the heavy lifting about financial assets and the first meeting, it’s really meeting to get to know each other to see if there’s a fit. So the first meeting is really a little bit about us and our process. And then they can tell us a little bit about what their goals are. That’s what we’re really interested in. And then we go through the whole idea of trying to figure out at a next meeting what their assets are like etc.


Transcript created electronically, words may not be exactly what was said, possibly edited for concision and clarity.



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This transcript was generated by software and may not accurately reflect exactly what was said.

Alan Olsen, is the Host of the American Dreams Show and the Managing Partner of GROCO.com.  GROCO is a premier family office and tax advisory firm located in the San Francisco Bay area serving clients all over the world.

Alan Olsen, CPA

Alan L. Olsen, CPA, Wikipedia Bio

    Lori Zager on Alan Olsen's American Dreams Radio
    Lori Zager

    Finance has been an unlikely and lifelong interest of mine. I grew up in the South watching Louis Rukeyser on Friday nights with my father. He paid for my East Coast education by investing in the stock market. I majored in Economics, which suited my early love of math and financial markets. My aptitude for finance led me to work for major Wall Street firms. I opened the San Francisco offices and led local operations for DLJ, UBS and Bank of Montreal. After dealing with portfolio managers who were overwhelmed with information and short on time, I learned how to break down complicated investment concepts into simple ideas. Clients often tell me that my enthusiasm for the market is so infectious, that even those who hate math can get excited about stocks. After 30 years of success in the rough and tumble institutional investing world, I’ve come to appreciate just how underserved individual investors are. Improving the financial literacy of women and their families is my passion. I have always admired the way my physician husband helped his patients. He inspired me to do the same thing in financial matters, by sharing my hard-earned wisdom and expertise with those who have little financial background, but want their money to work for them.

    Bio source: www.2xwealth.ingalls.net

    Alan Olsen on Alan Olsen's American Dreams Radio
    Alan Olsen

    Alan is managing partner at Greenstein, Rogoff, Olsen & Co., LLP, (GROCO) and is a respected leader in his field. He is also the radio show host to American Dreams. Alan’s CPA firm resides in the San Francisco Bay Area and serves some of the most influential Venture Capitalist in the world. GROCO’s affluent CPA core competency is advising High Net Worth individual clients in tax and financial strategies. Alan is a current member of the Stanford Institute for Economic Policy Research (S.I.E.P.R.) SIEPR’s goal is to improve long-term economic policy. Alan has more than 25 years of experience in public accounting and develops innovative financial strategies for business enterprises. Alan also serves on President Kim Clark’s BYU-Idaho Advancement council. (President Clark lead the Harvard Business School programs for 30 years prior to joining BYU-idaho. As a specialist in income tax, Alan frequently lectures and writes articles about tax issues for professional organizations and community groups. He also teaches accounting as a member of the adjunct faculty at Ohlone College.

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