Tune in for this insightful interview with Worthy Investments CEO, Sally Outlaw.
What is Worthy? And why did you create it?
Worthy is a painless way to save and invest that not only provides a fixed interest 5% return but that supports our fellow humans. What we do is sell $10, 5% interest earning bonds and then we use those bond proceeds to offer secured loans to growing American companies. Although they are bonds, they are totally liquid and can be cashed in anytime with no fees or penalties so they pretty much act like a cash alternative in an investor’s portfolio. And the reason we say they offer a painless way to invest is not just because of the low $10 purchase minimum but because they can be bought in several ways that make it easy to tuck money away. Aside from simply purchasing “on-demand”, investors can also set a recurring monthly investment to save without thinking, as well as engage our “round-up your spare change” program where our free app tracks the spare change from our customer’s everyday shopping transactions and then a bond is triggered for their Worthy account when that spare change reaches $10. So, we have a few different ways to start building that nest egg!
I created Worthy for 2 reasons – first, I am a long-time advocate for community capital. I’m a believer in the fact that we should be investing in our communities and in each other, and second, I wanted to do my part to democratize finance. What we’ve accomplished with our Worthy bonds is a way to bring institutional quality investments to the retail, everyday investor so they can finally begin to see better returns on their idle cash. I should also probably mention that our bonds are fully registered with and qualified by the Securities and Exchange Commission!
What steps can women take to empower themselves more financially?
Just start. There are now enough opportunities to micro-invest into alternative and fixed income products like ours, as well as via ETF’s to participate in the stock market, that you can literally begin with $5 or $10 without taking too much of a deep dive. Obviously, I’m an advocate for researching and understanding the investment landscape but many of us simply do not have the required time to dedicate to this. Statistics show this is true as women often have more money in cash then they need to have on-hand to guard against risk and if that money is sitting in a bank account at less than 1.6% (current level of inflation) then they’re losing money. So at least taking these first steps to put some of that cash to work begins to generate a bit of a return and as that nest egg grows they will likely be inspired to find more time to increase their investing knowledge.
There’s another layer to this which I always keep in mind and that is are the places you’re investing your hard-earned capital doing the things that align with your values? Are you putting your money to work in a way that shapes and supports the world you want to live in? For me it’s not just about empowering myself financially but using that power for good in the world.
What questions should women ask (their financial advisor, their household money manager) about their financial solvency?
When it comes to financial advisors, the real question is what types of investments are they more inclined to suggest you make with your money? Many of them are actually restricted to only selling you products that their employer offers, and others are only focused on limited types of market sectors. Personally, I’d like to know my advisor has a breadth of knowledge about many of the alternative investments (real estate, private equity and debt, etc) that often provide the returns portfolios need to really grow. That said, investment suitability always comes into play so your advisor should be aware of your age, income, goals, risk-tolerance and your retirement horizon as they make their recommendations.
What tools should a basic investment portfolio include?
I’m a Registered Investment Advisor and the primary thing we tell people is diversify, diversify, diversify. As people build their portfolio they should have a mix of stocks, fixed income, and alternative assets like real estate (via REITs). And again, this can all happen with a small amount of initial capital as investments can be made via online investment portals and robo-advisors with little to no fees and a few hundred dollars in total.
Why is having a 401k/traditional retirement plan not enough?
Or is it enough? Well it’s certainly a good start and if you are working for an employer that offers one you want to participate for the tax advantages and employer match. That said, you are limited to whatever investments the 401k plan offers – which on average are about 10 choices – and many of those are mutual funds. This means lots of higher yielding alternative investments are not included nor are asset classes that are not subject to market risk.
Who is the most influential woman/women in your life? And why?
It’s never just one! There are the women leaders and innovators with whom I have no personal relationship who inspire me and of course my own family members and friends many of whom are worthy role-models. Last year I moderated a breakfast roundtable with a gathering of high-powered women in finance and it was incredible to go around the room and hear the stories of the challenges they had overcome to be in the positions they held. Overall, I am energized by anyone who is mission-driven and who gets up every day dedicated to making the world a better place.
How are you making an impact?
I guess I’d have to say it’s in the way I created our Worthy bonds. I used a historical piece of legislation that was recently updated (called the JOBS Act) and applied it in an innovative way to create a product for the masses. Most importantly, the product not only generates a strong yield for bond holders but the bond proceeds also help our fellow humans. I think it shows that many more products like this – that can be good for investors while being good for our communities – can be built.
Who motivates you today?
What motivates me is leveling the financial playing field and addressing economic security for all. When I found out that 98% of Americans were prohibited by our government from investing our own money in any way we wish – particularly into the types of higher-yielding investments the wealthy are allowed to access – it really upset me. I mean how are any of us going to get ahead if the way we can grow our wealth is limited? It’s truly discrimination on a monumental scale so I set about seeing what I could do about it.
What’s your favorite inspirational quote / saying?
I spent 10 years working in Russia and one of my favorite sayings there was “Pray but keep rowing to shore” …meaning you can put your desires out there in the Universe but you also have to do the work! Keep sight of that land, your goal, and keep rowing!
What does Worthy want to share with our women during 2019 Women’s History Month?
Given my commitment to community capital, I’d simply ask that women give thought to where they are making their investments if this isn’t already part of their mindset. Someone once asked to consider how different the world would look if 50% of our investments were made within 50 miles of our home. Just imagine that – we’d have thriving Main Streets and more engaged citizenry. Are your investments making an impact? It’s an easy way to make a contribution to society during Women’s History Month!