Paco de Leon was once a junior financial planner with a salary so low, she rode her bike to work and grew a garden to save money. She liked helping others with their finances but the dichotomy between herself and the wealthy investors she worked for was bothersome. So, she pivoted.
In 2015, de Leon started The Hell Yeah Group, a financial firm in Los Angeles’ Echo Park neighborhood that helps creative businesses with bookkeeping and runs a weekly personal finance newsletter called the Nerdletter.
Gone are de Leon’s blue blazers and the “pose-before-a-bookcase” image of financial advisors. Now, her round glasses, band T-shirts and west coast flair are her work attire while she educates artists about business and personal finance.
But many more people could use someone like de Leon; they need and want help without “finance shaming” — something the former advisor says is baked into many “old, outdated finance experts.”
To extend her help to others, she started writing about personal finance for publications like Refinery 29, Bloomberg and The New York Times. Those led her to create a TED Talk about financial success for freelancers, and inspiring people to understand complex financial concepts through her hand-drawn artwork and illustrations (see how income tax actually works in one Instagram post, or in another, the different ways investing $10,000 changes over the course of 30 years, depending on what you do).
February 1, she released a book that she hopes will make personal finance more accessible to everyone called Finance for the People.
Before checking out her Instagram, Twitter and TED Talk, let de Leon explain what wealth managers are doing right and wrong, why she turned to art for financial education, NFTs, and more in this interview with RIA Intel.
Hey Paco, how did this book come about?
I stumbled into privilege. I chose to study finance and economics in the post-2008 recession. I first worked for a small business consulting firm, then later I started working for a financial planning firm. Slowly, I found myself in meetings with clients, and started understanding that a lot of the information that is given to wealthy folks is given to them behind closed doors.
Not everyone has access to that information. I felt a sense of responsibility. I should be sharing that information. Everyone has their superpower and that one is definitely mine.
How did you start out?
At first, I wanted to be a financial planner and do everything on my own. Start my own firm. I did that and I had a roster within a year and realized I didn’t want to be in services after a while. I started writing and put the information out there. Then, I got a book deal.
It’s a different platform than working with people, one to one. I wanted to set information free for everyone through this book. I thought, “How can I revolutionize people’s ideas about money?” I thought a book was an ideal way.
As an artist, why was it important to include illustrations, visuals, to help understand concepts that are sometimes dry?
I felt constrained. It’s a natural human instinct for me as an artist to visually represent it through an illustration. My wife is an interior designer and photographer. Being so close to that mind all the time makes me realize it.
How much of what you do is financial education?
It's about half of what I do. The other half is running a bookkeeping agency for creative businesses, and I have run a weekly finance newsletter to help people connect with this world of money. Everyone around me is an artist or creative professional, I’m often the only one who understands anything about finance. Creatives create stories that change culture. I wanted to create something that would make them feel connected to the world of finance.
What is your perception of wealth managers?
Being someone who has come from wealth management, among creative folks, is that they just don’t get them. I’ve seen wealth managers give advice to creative people, like: “You should find a more stable career.” But that’s a non-option. Wealth managers understand risk. Investing money in the market, but they have a hard time seeing risk from a career perspective. Your income is going to be your greatest asset.
Since they’re not in the creative world, I think the biggest challenge is the business model has been flawed. The people who need the most help financially don’t have access to it. That’s also another reason why I wanted to write the book. All day long, wealth managers help people who can afford them. But what about the folks who are starting out, or who don’t even have an emergency fund? Their job is to help people who are already wealthy but they’re missing out on people who are on a budget and need help.
The book feels a bit like a primer — from loans to credit card debt and mortgages. Is it finance 101?
If you’re the kind of person who knows how to trade foreign currencies, it's probably not for you. But people who are looking to get their financial lives in order, and to stay inspired, it's for them. In order to take care of your personal finances, you have to have discipline. It draws from other aspects of understanding our own behavior, our own selves, that I don’t see a lot in most personal finance books. It does bring that element for folks who might know a lot about finances but haven’t done the personal work. It can be beneficial for them, as well.
When you go to the personal finance section of a bookstore, what do you usually see?
It's so easy for me to make fun of Rich Dad, Poor Dad. That one is there. I haven’t even read it; I just know it's not for me. I recently saw Broke Millennial by Erin Lowry on display, it’s cool to see different voices there. There are weird ones, obscure stuff, niche things, I’m super down for frugality and people living within their means, but I think there can be a larger discussion for ways to open up our minds and explore earning more.
People might not come from a household where entrepreneurship is more normalized but expanding their vision of ways to earn money is something that could be talked about more. I will try to talk more about that, as well.
In your TED Talk and in your book, you talk about not working for below your rate, can you expand on that?
When you’re first starting out, you must make those sacrifices, but as you go further along, you have to be more strategic. You might work with some clients but that subsidizes it for the other work you do. It's not as hard and fast, as I said in my TED Talk, but I do talk about managing finances, both personal and business. When we look at the emotional aspect, which is more process oriented and strategic, that helps in a system in a world where things are unequal. When we focus on a system or a process, we learn to not take things so personally, especially if we don’t achieve what we set out to achieve in a set amount of time.
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Does your financial health all come down to flexibility?
Yeah, and falling in love with the process. Managing your financial life is like that. I would advise people that if you’re not looking at something, look at it. Weekly finance time is something I cannot recommend more. If everyone just set aside 15 minutes to log in and look at your accounts or spend time reading a book and doing the exercises, holding that time for your finances, which is sacred to you, investing in your personal financial life, when you start to show up for yourself, it starts to make a big difference.
The same way you put a little money aside and it compounds, it’s the same with finance. That’s the first habit I find important. Save and invest a portion of everything. Having that as a personal principle, assuming we can all meet our living expenses, that would put a lot of folks in a good position.
Would you recommend everyone to hire a financial advisor?
I don’t think everyone needs to hire a financial advisor. I think it depends on where you are. There are folks in the industry who work with people annually, or seasonally — like end of year tax planning. It works for some people, maybe not everyone.
The fee structure, to me, feels crazy. That’s one of the reasons why I left financial planning. When I got in, my boss sat me down and said: “This is how it works; you charge 1 percent management fee on investable assets.” At first, I thought “this sounds cool” but then I started to see that the model portfolios we were creating were made up of [index funds] and ETFs. They looked a lot like Betterment’s [portfolios]. That’s when I realized, some folks will learn that 1 percent is a lot of money over 40 years. It's not right for everyone. But if you are tax planning or have a lot of investments, you’re looking at business plans, go for it.
The caveat is that you can find young financial advisors on a network like XY Planning Network. I do think that would be a great check in for a lot of folks. If you are going to hire a financial advisor, know what you’re paying for. With financial advice, you must know how the fee structure works and how they’re getting paid. Be curious and practice asking questions before you hire one. There are all sorts of dirty hidden fees, and the dirty word is “kickback.”
What advice do you have for self-employed people, financially?
Have a year-end tax planning meeting with your accountant, in November and December. Then you understand what your year looked like and can project in the last eight weeks of the year, plan what to do.
For small businesses, talk to your accountant on the best way to save for taxes. Sometimes they just say, “save 20 percent of what you earn into a tax savings account.” Sometimes they say, “save 12 percent of every profit dollar you earn.” Speak to them and try to get to a formula that’s easy for you to calculate.
Get into the habit of saving for taxes. You don’t want a surprise tax bill. Explore the options. You might be able to do something with the money you have, like setting up a 401k plan.
Why are financial advisors great or not great at helping with day-to-day personal financial health?
I don’t know about day-to-day personal finance health, but on a larger, 50,000-foot view perspective. If you even just think about one advisor, how many clients do they have? There’s no way they are in contact with anyone day to day. I’ve seen some clients in the office call every day but that’s few and far between. Oftentimes, they’re dealing with stocks.
In your opinion, what is the most important part of your new book, Finance for the People?
So many people are at different stages of their lives, some are paying off student loans, others are planning to save for their emergency fund. I meet some small business owners who are afraid they’re going to go to jail because they didn’t do their bookkeeping for two years. But I also meet people doing well who have a couple of growing businesses, an apartment building and are trying to sell an e-commerce shop. They’re asking different questions, rather than what the college grad is asking.
Ultimately, I feel everyone is asking me: “Am I going to be, okay?” No matter what, the underlying question is that. When financial advisors are asked questions, that’s sometimes what the client is asking about. That will help their clients out a lot.
It really comes down to trust, doesn’t it?
Yeah, trust and sometimes we use money to work through some of our emotional aspects of our lives. It’s tied to survival and our sense of worth. There’s a lot to unpack.
How would you suggest financial advisors need to change to attract a wider variety of clients?
I can only speak to my experience, what has worked for me. The more I was able to be myself, to not be this weird robot who was acting the way I thought professionals acted, when I dropped that, I said “I’m Paco and I just want to help people.” Then my business boomed. People wouldn’t stop sharing my number.
When that happened, I was 29 and now, I’m 36. I studied marketing and learned that sending out a newsletter establishes trust with clients, you get to show them you’re valuable. With each email you send, it helps them, it’s great. What is important for financial advisors to realize is that you must really care about cultivating a relationship with your audience, really. That little bit of energy you put in each week or month, to communicate to the world, that compounds.
What’s next for you?
I’m working on taking this book and creating a physical experience, a pop-up museum or experiential thing where you can see the book’s concepts and interact with the concepts in a space. You can interact with the exhibit. I’d love to show privilege by playing a game that’s rigged with the audience or creating an escape room where people have to interact with some of the challenges, while you get to see how others struggle with their personal finances. You get to see inequality. A rigged Connect Four game is a good example. One person gets to go twice at first. Or a game about budgeting.
Do you think finance is becoming more accessible because more creative people are using it as a vehicle to express more conversational ideas, like in your book?
I think what’s happening between finance and creativity is really fascinating right now. There’s so much more art that’s being made where it's normal to talk about finances. A NFT is a beautiful example of the convergence of the two things. The ledger is embedded into the art, it’s a poetic illustration of how ingrained money is into the system, you cannot decouple it from the art. It’s crazy.
Nadja Sayej a journalist and author based in New York City. She's contributed to The New York Times, Vanity Fair, and other publications, and interviewed more than 500 actors, directors, and designers including Susan Sarandon, Jean Paul Gaultier and Robert De Niro.