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So thank you so much for having me.

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I'm Alexa von Tobel and I'm incredibly
passionate about personal finance.

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I wanted to start talking to you all today
about my favorite television show,

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which would of course be,
The Biggest Loser.

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I love The Biggest Loser and I'm sure
many of you watch it here.

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I love to watch it while
I'm on the elliptical machine.

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Everything from the crazy donut binges,
to the dramatic weigh-ins,

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it's incredibly entertaining.

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Though when I watch it
I often step back and I think:

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"What a great television show."

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America is struggling with obesity

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and this is a show that
brings that to the forefront.

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Six million people view it every Tuesday
night and I often pause and think,

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"God I really wish something like this
existed for personal finance."

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I really wish that there could be a show
like The Biggest Loser for person finance

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but unfortunately money is still so taboo.

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In America right now, the average person


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makes approximately 6 to 10 money
decisions every single day.

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Those decisions can range
from simple things like

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whether or not to buy a cup of coffee?

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to bigger things like
What should I do with my 401K?

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I think what's important about that is
those decisions are completely unguided.

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Right now personal finance
isn't taught in high schools, colleges,

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or graduate programs across
the United States.

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People typically learn about personal
finance by talking to their parents,

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who unfortunately were also never formally
educated about personal finance.

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The take away there is most people
simply learn through trial and error.

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Money is such an important thing
it effects us all

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and most people simply
learn about it through trial and error.

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So from there, it's easy to understand
that money right now

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is the number one thing
that young people really stress about.

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Worse 76% of the country feels completely
out of control when it comes to money.

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Pause for a second, four of your closest
friends, three of them right now

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feel out of control when it comes
to their personal finances.

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Seventy five percent of this room
feels out of control

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when it comes to their personal finances.

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Unfortunately we're not doing anything
to change this.

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Right now 84% of college graduates
said that they need more help

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when it comes to personal finance
but they're not getting it,

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and as a result of all of this, 61% of the
country is living paycheck to paycheck.

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More than 50% of our country
is not quite sure

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how they're going to pay their bills
next month. That is staggering.

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Think about the stress
that puts on individuals.

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So I often ask myself:
How on earth did we get here?

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How do we end up where
this thing that is so critical

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to every single person in this room?

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It's something that we've never learned.

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I want to take the 1.8 million college
graduating seniors from this year

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and I want to walk you through exactly
what ultimately happens.

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I want to introduce you to someone
who will represent the absolute norm

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and we're going to find out
how they ended up on such a ride.

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So meet Jessica. She's 22 years old,
she studied English.

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She's going to graduate from college
this year with $25,000 in student debt,

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and $4,000 in credit card debt,
and she's going to end up, if she is lucky

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and I repeat lucky, with a job right out
of college, where she'll make $35,000.

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That means that her monthly take home pay
will be approximately $2,300.

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I'm going to walk you through
5 decisions that Jessica's going to make,

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some that she's aware were bad decisions,
some that she's not,

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and it helps you better understand
how she ended up in a situation

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that most of America is in.
So first she's not going to have a budget.

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Jessica thinks about her life now
and says:

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"I barely get any money that I'm making.
Why am I creating a detailed budget?

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I'll be lucky if I can just pay my bills."

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She doesn't know that good financial
planning recommends that 50% of her money

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that she takes home
goes towards essentials,

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30% towards life style,
and 20% towards the future.

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That's really key, 20% towards
her future savings.

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Jessica's going to move
after college to a big city.

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First she's going to do what every other
college graduate does, get an apartment.

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Then she's going to spend $1,200 on rent.

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In the beginning, a simple decision
such as getting her apartment

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is going to throw even the chance of her
having a balanced budget

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completely out of whack, but also put her
in jeopardy for years to come

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as she won't have that 20%
going towards her future.

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Next Jessica already has lots of debt.
She thinks to herself:

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"Everyone in America is in debt.
Why do I have to worry so much?"

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Instead of aggressively paying it down she
only going to pay her minimum payments.

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Worse she's going to miss a few
of those payments.

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She doesn't even understand
what a credit score is.

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Nor does she understand why
it's so critical to her financial future.

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After that she's not going to think
about emergency savings,

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and the reason is she can
barely think about how she pays her bills.

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She thinks: "What do I need
emergency savings for?"

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What she doesn't know
is if she loses her job tomorrow

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or has any type of an emergency,
she's completely vulnerable

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and she's going to rely on credit card
debt to keep her head above water.

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Her fourth big mistake is she's not going
to negotiate her salary.

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She is so thankful that she got a job

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that she's not going
to negotiate her salary.

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She's going to wait for her boss
to tell her when she gets one.

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So few years later
she's still making just $35,000.

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The final major mistake
that Jessica's going to make

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is she's not going to think about
retirement in her 20's.

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The reason she's not
is retirement is 43 years away.

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Why on earth would she think about it?
She says.

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Because of that she doesn't take advantage
of her employer 401k match program,

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and she doesn't open a Roth IRA.
Now I want to fast forward 15 years.

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Applying those exact same
behavioral traits,

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not learning much more about personal
finance, making a few more mistakes,

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Jessica's going to get married
and she's going to have 2 children.

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Fifteen years later,
applying the national APR of 15%,

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Jessica's going to be closer
to $20,000 in debt.

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As her life grew,
credit card was her answer.

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Her interest rate has of course gone up.

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From there, she still has about $10,000
of her student loans.

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So a decision she made 2 decades ago
is still haunting her every single month.

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Additionally her credit score has gone
from 622 to something more in the 500's,

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and that's because she's amassed more debt
and she's missed more payments.

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She started thinking about retirement,

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but she currently has less than $10,000
in her future retirement savings.

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Which actually is about
54% of America right now.

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Beyond that, she doesn't set up
a 529 plan for her children

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because she has no other dollars
to think about.

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So I want to pause for a second and I
want to think about the national impact.

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I just walked you through Jessica's story
and I want us to pause

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and I want us multiply that by a thousand
by a million, and by tens of millions.

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Jessica's story is the story
of tens of millions of Americans

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living in our country today.

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You understand that
and we pause and really think about it.

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It helps you better understand why we
currently are a country where we have

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$2.5 trillion, yes trillion dollars
in consumer debt.

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We're in a position where the American
dream of home ownership is not a reality

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as 25% of applications
are denied immediately.

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Where 31% of Americans today
have no retirement savings

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and therefore the American dream
of pausing when you're 65

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when your bones are starting
to get brittle and being able to retire,

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they're not going to have that
as a reality, and finally

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and maybe even worse, money is the number
one cause of fights in marriages.

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And married couples who fight
are 30% more likely to end up in divorce.

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So this gives you an idea
of where we are today.

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But this doesn't give you
a sense of the domino effect.

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Jessica and her husband
they have two beautiful kids.

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Those kids will go off to college
with the exact same credit card debt

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and student loan debt that Jessica had.

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But worse, they're probably going to have
to help Jessica with retirement.

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That domino is going to fall down for
generations to come

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and as you can see Jessica has flipped
a domino and the downward financial spiral

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that will continue for many generations.
So what if we could rewind?

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What if I told you that I really believe
that there's a solution to all of this?

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I really believe that we can go back
to the tens of millions --

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We can ultimately go back to Jessica
and there's a simple solution.

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We can take her
before she enters the world,

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before all of our college seniors do,
and we can basically

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stop and teach them 5 principles.

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We can help them
avoid making these mistakes,

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let them understand why
a budget is so critical,

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learn the principle of living beneath
their means;

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help them better understand
that debt is not an answer

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and in fact it is absolutely so important
to aggresively pay it down

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as it is designed to defeat you;

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help them understand that an emergency
savings account is so critical -

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if anything happens, you want
to be able to sleep at night

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and that's why it's there;

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help them understand that they have to
negotiate their salaries along the way

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that their voice will always
be the loudest;

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and finally that retirement is something
you have to think about in your 20's.

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I saw this graph many, many years ago.

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It's a simple principle,
it's compounding interest.

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An individual who starts contributing
to retirement in her 20's versus her 40's

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and they both contribute the same dollars.

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This is a really powerful graph
and a really important thing,

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and I just always wonder
what if we can make this go viral?

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So I want to go back
to the educated Jessica.

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Let's say we did actually teach her
all of these empowered facts.

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Years later she'd be in a position
where she could open the coffee shop

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she'd always dreamed of.

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She and her husband now own a home
because they knew about credit score.

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They knew not to miss their bills
and they knew to keep it in the 700's.

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They're looking forward to their
retirement.

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They took advantage of all those things
in their 20's

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and compounding interest worked its magic,

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and probably best yet,
her children have 529 plans.

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They'll go off to college and they'll be
in a significantly better place

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than Jessica was decades ago.

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This is the empowered Jessica.

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So I wish it weren't true but it is,
money is such a lifeline.

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If you love someone you can travel
around the world to see them,

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and if you're sick, as I know this week
you're going to want to pay

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the best dollars that money can buy
to get the best doctors.

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Money will affect us every single day
of our lives until the day that we die,

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and I wish it weren't true,
but it's a fact.


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I look forward to a future where
we can pause,

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we can take all of the people
before they enter the world

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and teach them these
basic financial principles.

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That we can empower them

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so that they can end up
living really powerful financial lives.

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That they can feel great about money and
from there it ultimately is going to have

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fantastic impact on our balance
sheets and as our nation as a whole.

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But most importantly it's going dwindle
down for many generation to come.

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When I think about money
I think it's not important to be rich.

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It's not about being rich. It's about
being able to live your richest life.

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I want that for me.
I want that for Jessica.

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I want that for the hundreds of millions
of Americans who deserve just that.

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Thank you.

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(Applause)