Ep. 96 - Why First-Gen Wealth Builders Are Changing the Game w/ Valeria Rivera, CFP®

Alright, let's dive into some real talk about money, wealth, and breaking the cycle of financial illiteracy with Valerie Rivera, the badass behind First Gen Wealth.

This episode is a wake-up call for anyone who's ever felt lost in the financial world, especially if you're a first-generation wealth builder. Valerie's story? It's not your typical "I always knew I wanted to be a financial advisor" bullshit. She stumbled into this world, realizing early on that money equals options and freedom.

Here's the kicker: Valerie's not just another suit talking about stocks and bonds. She's on a mission to bridge the wealth gap, focusing on folks who've been traditionally ignored by the big financial firms. We're talking about you - the ones busting your ass, making real money for the first time, but feeling clueless about what to do with it.

We tackle the hard truths: why the investment industry is rigged against you, why your emotions about money matter (despite what those old-school advisors say), and why you shouldn't trust anyone who can't write "I'm a fiduciary" in a single, jargon-free sentence.

But it's not all doom and gloom. Valerie drops some serious knowledge on how to take control of your financial future, even if you're starting from scratch. We're talking practical advice, not pie-in-the-sky BS.

The takeaway? Why not you? Why can't you have that Roth IRA, that brokerage account, that financial security? It's time to stop thinking this wealth-building game is for "them" and not for you. That's straight-up bullshit, and Valerie's here to prove it.

Ready to get your financial shit together? Check out Valerie and First Gen Wealth: Website: https://1genwealth.com/ LinkedIn: https://www.linkedin.com/in/valerie-rivera-cfp/ Twitter: https://x.com/1genwealth

Don't just listen - take action. Reach out to Valerie or another fee-only fiduciary advisor. Your future self will thank you for it. Let's break this cycle of financial confusion and build some generational wealth, shall we?

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Chapters

• 0:58 Discovering the Importance of Money
• 5:19 Focusing on First-Generation Wealth Builders
• 9:17 The Role of Financial Advisors at Different Life Stages
• 12:36 The Emotional Aspect of Money
• 14:29 The Need for Transparency in the Financial Industry
• 20:03 Creating a Balanced Investment Strategy
• 23:57 Advocating for Consumer Education
• 33:39 Empowering Individuals to Take Control of Their Finances

Transcript

0:13

We are back with another episode of minority CFP series, which is a very fun one because I am one, but it's also another time to chop it up with someone else who's came from a diverse background, why they got into it, why they continue doing it because it's one of the hardest things to do in the CFP side is. Be a minority and someone who has two minorities behind her name because she's also brown, but also female is Valerie Rivera with First Gen Wealth. Welcome.

Valeria Rivera, CFP®: 0:40

Thank you so much. Sorry for having me excited to be here.

0:43

Me too. I almost got going too fast because I have so much energy for this, but I want to first get to know and let everyone know like how you got into this industry. I know almost every episode and everyone talks about like how you got into a certain industry, but I think it's very important. to understand like how yo a minority, we didn't rea it. So talk to us through where you are today.

Valeria Rivera, CFP®: 1:10

Yeah didn't know any financial know this was an industry This was all unknown. It was hard to aspire to be something that you didn't know existed. What I'll tell you is that when I was a teenager, I very quickly realized the importance of money providing options. My parents would say things like, yes, you can go see your friends, but we're not giving you any money for it. And that was my first kind of clue of if I want to actually be able to have a form of independence and have freedom, I need money. So I started working when I was 15 after school, so much to the point where it really impacted education, right? A lot of, A lot of minority families will really put an emphasis on education, right? We want you to be educated. We want you to do all the things that you didn't do. I come from a family that really emphasized hard work and because they emphasize hard work, it was making money, but not for the sake of look at all of the stuff we have, but being able to have options. So that emphasis on work, powerful in some ways, detrimental in others, because I focus so much energy on working where I'm I missed so many days of my senior year of high school to work full time at my bank teller job that was inside a grocery store. I was not a wonderful student ended up getting a role in a community development, financial institution. The name of it was shore bank and I say was because it no longer exist. And it was a. For profit bank that provided deposit and lending services in low income areas. They focused on black and brown communities throughout Chicago. And the idea is you can make money and still do well for the community. A lot of the emphasis in that area was on neighborhoods that suffered in the white flight. When black people were moving in, white people were scared and moving out. And when that happened, they lost banks, they lost grocery stores, they lost small businesses. So you have neighborhoods that are highly devastated. And our bank focused on how do we bring back lending services and opportunities to these areas. So I was in college while I was in that bank and realizing the importance of providing access across the board. And I ended up being a boss from that bank who went to a wealth management firm. And Encouraged me to apply. She had to practically force me to apply. I did not know the difference between a stock and a bond. When I heard the word Morningstar, I thought it was the brand of vegetarian food. I did not know what Morningstar meant. I knew nothing. The stock market might as well have been this pie in the sky. foreign concept. So not only did I feel utterly out of my element, I felt completely unworthy of being there. And when I did start at that firm, they also let me know I was unworthy of being there. But that's a different story.

4:38

That's a path, right? But to recognize early on that money isn't about the things that we have that we can flaunt. It's about Your opportunities are options, right? The flexibility to live life, how you want it. That's really powerful. Especially in minority communities. Cause we love stuff, love shoes. We love clothes. We, you name it, we love stuff. And a lot of that becomes from the root of all of our people didn't have anything. So now that they have the money, they go get stuff. But I believe if everyone had that opinion of it creates options and your ability to have options. That flexibility is what takes you to, to greater heights. So as you've gone through that and you've launched, how your own firm with first gen wealth, why focus on kind of the first generation, right? Like why do that? Because that is a, that's a small network. It's another niche, right? You're already a minority CFP. You're already a female. And you've niched down. Why use that as your platform to work with first gen?

Valeria Rivera, CFP®: 5:41

At the firms I've been with, I've been with five or six firms throughout almost 15 years. And most of the firms were really high end where the minimum to be a client was a million dollars. So much of the greater wealth management industry, as Is highly focused on. Do you have assets for us to invest? If you don't have assets, you are not worthy of us. You offer us no value by and I was working with people who are either generally near or in retirement because it took them those multiple decades to be able to gather the amount of assets. So part of it was I'm working with people where great people, right? It like, like worthy people, but I very much felt like I won. I was contributing to the wealth divide because why is it that I can't work with anyone who is even in my same decade? I wished I could have met them 30 years prior to have been able to have helped them because at that point, once you're in near retirement or in retirement, it's like trying to unmake an omelet at that point. It's been cooked. There are only so many levers you can pull, but what if you met someone 30 years before, how much more impactful could that have been? So I thought about deeply about that. I thought about how all of my friends are first gen. We all have the same common story of, we grew up with nothing. Now we're all professionals. Our parents have not been able to guide us throughout our education, throughout our professional careers. We've had to rely on outside people, on finding mentorship, rely on each other. And now that we're actually making real money, I have become the person to all of my friends and I don't know where to send them and what I kept feeling over and over again is, why does this feel like the secret society? Of the haves and the have nots and why am I? Why am I essentially working for someone to help? Keep other people rich that aren't helping my community that aren't helping people of color it was disgusting to me at the end and I was told by this hoity toity firm that I worked for where the person just She has just so much money, right? Just so much money and can't retire in her seventies because what would she do with herself? She's dedicated so much of her life to her career where this is not what I envisioned for myself. The goal is not to see how much money I can accumulate in life. So it's a combination of that, of, Of a family dynamic. I felt like I couldn't start a family at these large firms, despite working for a team of all women. That was probably the most toxic environment I ever worked in. And it all came to head. So I was told by many people that first generation wealth builders, basically be prepared for nonprofit work. And essentially they couldn't be further from the truth. Basically that's a very different business model that large firms don't care to explore. And because they don't explore it, they deem it as not worthy when you can make a great living while doing great work for amazing people. So it has been an absolute win all the way around.

9:20

And let's talk about that. The reason they don't want to, or to, or whatever is because they can go ahead and charge their one to 2 percent on assets because they have those people. Why would they need to do the planning? Why would they need to reach a different generation, different, even business model or different type of person. Because that means more people, they have to learn something new. They have to charge differently yada, yada. Not only do they not like it, they talk down on it and they market against it, which makes it even harder for us.

Valeria Rivera, CFP®: 9:50

Yes. And what's so funny is that I remember one firm I worked for. They hired me to be the planner on the team, right? This hoity toity team where no one has their CFP. They don't know anything about financial planning. They grew up starting the business in the seventies. So they're still thinking that they're innovative, but haven't really haven't evolved, but they knew enough to know that they needed a planner. So they brought me in to be the planner for the team. And it was eyeopening that this big shot who's all over magazines, didn't know anything about financial planning, really only focused on investment management, like this is frightening, absolutely frightening. So I think a lot of the big firms, a lot of the older generation, part of me thinks that they actually think what they're doing is full planning. I don't think that some people actually realize that what they're doing Can be absolutely replicated by a robo advisor. So I think there's a high level of ignorance that still exists within the big firms.

10:56

Yeah. Which also trickles down to society. That's what they think of, when they hear a planner for advisors, they think of that side of it. And it's not true. Like I say, this a lot is investment management. Investments are a very, not very small, but they are a small piece of the entire pie. It is just a tool to get somewhere. It is not the focus nor should it be the focus because it really ultimately doesn't matter if you have 0 and I can get you a billion dollar return, guess what? You're still at 0 because you have no money to put into there. The planning is what allows you to get money into investments to help grow your wealth. But if you don't have your mind your cashflow, and everything in order, none of that's going to occur nor matter. And I believe the reason that majority of our. Boomers and all those people who are retiring don't have as many assets is because they did it backwards as well They focused on the investment piece They tried to scrape as much as they could but since they weren't emotionally tied to it and have a plan They would dip into it. They would use it. They would not be as aggressive or whatever it takes Now they're hurting some of them work at Walmart right not to knock on those people but I'm pretty sure preferred. No one wants to do be a dork reader. So what has gone wrong in my opinion? It's there wasn't planning it was their banker or whomever they know. I've got this next hot stock I've got this put this in the ira. You'll be fine live off social security and now look at them Yeah, can you give me your take or your and because you agreed of like how little importance? investment side is compared to You The whole planning side.

Valeria Rivera, CFP®: 12:35

The investment side matters. If I had to think of it as a pie chart, I would put it percentage wise at about 15 percent of what it is that we're actually doing for you. And even with that 15%, it's not that what we're doing is picking the smartest, hottest, greatest investment of all time, right? Like the whole idea is keep your life exciting. Keep your investments boring. I think with that investment side, one of the biggest things we're doing is. Creating a level of accountability, creating consistency, being able to help you understand how much is an appropriate goal based upon everything else that's happening in life. How do we help you stay the course when you're are in invested along the way, right? If you don't set yourself up for the right timeframe and you have to sell too early, it can be really easy to think that the system is rigged and that investing isn't for you, but you didn't set yourself up for success in the first place. So I think it's all of those aspects of things. And then I think what ties into it a lot is also not just diversification among the assets, but actual diversification among asset location. What you're putting in your taxable account versus pre tax versus Roth. And when my clients come in, majority of them have never heard of a taxable portfolio and don't have one in place. So we talk about what are the different account types? How does it connect to your whole life? Why are they important because you might have goals that are going to be more appropriate to put some money into A taxable account versus an account that you can't access to you're almost 60 years old So I think it's that education level. Once people have that, it starts to unlock things because truly, like what we're doing is not rocket science, but you have to piecemeal at this current point, all of the information together, and then have to understand what of this information that I'm reading actually applies to me and that's the hard part

14:42

applies to me, applies to my tax situation applies to what I want my legacy to be all of those things. And they're all moving parts. I say this a lot. I loved. Early in my industry or early in my career, you'd create a plan and it'd be like this giant binder of things. And it's by the time I have created this and delivered it, something's changed. And so with today's day and age of able to create this financial plan and let it run, we're changing it as soon as something happens. And I think that's where more value to us is occurred than in the past is. Our clients have access to us essentially 24 seven, right? We're not gonna respond, but like for mine, we have Slack and so they can message me at any time, say something, this is happening, whatever I go in and adjust and I can go speak to them. I can go answer it as opposed to waiting on annual meetings or quarterly meetings or those things, because if you wait too long, they bought a house, a boat and had a kid and you're like you didn't tell me. And that changes a lot. It's you should be involved with their life as much as possible.

Valeria Rivera, CFP®: 15:44

I agree. And especially right when you're working in this Age group where so much is happening, right? Babies are being born and you're switching jobs and you're buying homes and things are happening with parents. There's just so much happening versus retirement. Like you've made this peak. There's still things that absolutely happen, but not to the extent of things that are happening in that full blown accumulation stage, right? There's so many decision points along the way. And these decision points. Directly or indirectly, nearly all of them revolve around money, whether we want to accept it or not, right? Where we live, what we eat, where we drive, how we get to our jobs, where our kids go to school. Those are all connected to money.

16:36

Everything is integrated through money, right? Which means our emotions are tied to it. What do you do for your clients or talk to your clients to help them through the psychology, the emotions, the fields about money, because I know when we grew up, it was always told in specifically trained early in the career is separate your emotions from your money and your decisions. And it's not possible because they're intertwined with everything we do. How do you help your clients through that?

Valeria Rivera, CFP®: 17:02

There's actually a saying from a firm I worked for. They would call it DERP, disciplined, unemotional, repeatable process. So the second word is unemotional, teaching clients how to be unemotional. And I think that is what so much of the greater industry attempts to separate your financial life from the rest of your life, which is garbage. Absolute garbage in real life. There is a lot of questions around money. The people who come to me, there's already a higher level of self awareness there because they, one, know they need help and two are ready to seek out a professional for it. I can only imagine a lot of people who maybe attempt to reach out or want to reach out, but don't actually do it because they may feel like it's not worth it. I'm not worthy hiring an advisor and advisors for white people. All of these things, all of these stories that we tell ourselves. So a lot of what we do in the beginning is I want to understand what was it like for them growing up? And not, I'm not a therapist, I don't attempt to be a therapist, but I want to base an understanding of what is their feeling around money and how do they feel like it's affecting them today? Because there are a lot of common themes and my clients are all the colors of the rainbow. I work with black people, brown people, Asian people, Indian people. Like I work with everybody, but, and there are common themes. Not everyone is an immigrant, but there is a, or a first gen, but majority are first generation wealth builders. And the themes are feeling behind that they didn't start soon enough, or they didn't know early enough. Comparing themselves to others. Whether professionally or that neighbor look what they have. Why don't I have this right more student loan debt? because there wasn't a 529 education plan that your parents made for you because I didn't know it existed and There was no down payment for your first home because they're trying to get their first home Right and so there's a little bit Of like jealousy there, which I fully understand. So I think it's like letting people be heard, having them say all of the feels about money and helping them rewrite the story that they're telling themselves about what they are capable of. Some of that ties into the work they have. And if they're doing things like going after that promotion, going after that next job, helping with that. Yeah. Rewiring of yes, you can, yes, you are worthy. Like why not you? And I think that confidence building translates to money as law, as we continue to become more educated along the way, like I would never, for example, show a client off the bat, like here's your investment recommendation. It's hard to show you that if you don't know what an ETF or mutual fund is. I'm not going to jump to step seven when we're here. So like you have to know the baseline and build that confidence and have those wins along the way.

20:17

You do. And once that occurs, I think everyone comes in with disorganization. Everyone has nowhere they're so unorganized. And that's usually the first thing, right? Both mentally and actually physically with their money, right? Like it is usually a mess. Usually because of some trauma or they didn't know how to fix it and they just kept going. Once you can get that, that that feelings and the emotions out and you've broken through, I believe the whole budget conversation and all of those things are not conversations. It just, this is what we need to do because of based on how you feel, this is the goals. It makes it easier for them to actually stick to a plan. And I really truly believe that's what's missing in our industry. The most is. Everyone wants to go in, give them this flawless plan and it probably is flawless by the way. Amazing plan with investments and this is all the stages we're going to do. And let's hit the ground running. And then they get going through and it gets all haywire or they fire them and they leave them because you have not connected on the emotional side. And that is why it's so important, right? And all we're saying is we care more about the people than we do the money we make. That's it. It's very simple thing in life. Care more about others than the money. If you care for them, money will come and you'll be taken care of. And I'm allude back to what you talked about. The industry is you can make a really good career and make really good money by taking care of people without giving everything you have in your life, right? You have time with your kids without, cutting corners or being one of those disgusting people with fees and all of that stuff. You can do that in this industry. And really do take care of people. That's what's really, truly amazing. Hell, we don't know how many people are going to help just with this episode. Just me and you bullshitting back and forth, but how many people will impact? We don't know, but that's, what's really important about connecting on the emotional side.

Valeria Rivera, CFP®: 22:13

Oh, yeah, it's true. And so if you work for a place where it's. Strictly based on investments, right? Or if you work for a place where you're selling insurance, that's another one. I see. And then the black and brown community is you don't have a lot of assets, but you have consistent income. So we can sell you an insurance policy, and then you think you're working with a financial advisor because are the financial services industry. Is so crooked and backwards, right? Like I'm in this industry and I hate this industry at the same time.

22:51

Guilty.

Valeria Rivera, CFP®: 22:51

And it's there's, it's so mind boggling because not accepted in the greater industry, but then you could be tied in with it. Like, how am I tied in with you? I don't like you.

23:02

Exactly.

Valeria Rivera, CFP®: 23:03

But to the greater public, because. We don't have, if you're a, if you're a doctor, you pass your board certified or can be board certified. If you're an attorney, you pass the bar. There isn't this bare minimum standard to be an advisor. And that is so disingenuous and terrible for the greater retail community. But right. There's too much money to be made off of people. And so it will continue to be. To be that way. And so what we can do is like things like this to help educate people about what options exist and to really follow the money, at follow the money, ask how people are paid. Are you a fiduciary, right? 100% of the time? Meaning are you putting my interest right? My, my meaning I'm the client, my interest ahead of yours 100% of the time. If they can't write that line, like that one sentence, line and email and not give you two paragraphs of legalese, move on. Because otherwise you should never have to question are they providing me this recommendation because they Are profiting from it, but a lot of the industry still works that way unfortunately,

24:20

but with the board standards and everything do you believe that Our industry needs like for example if the cfp would actually step up and be that The entrance into this industry is you have to pass the exams Do you believe in that or do you think it should be something lower? What are your thoughts?

Valeria Rivera, CFP®: 24:39

My personal take is it should be the CFP as a bare minimum. And even then you have, there is that level of experience you have, it's three years, so it's not anything gruesome that you have to have and then be able to pass. An exam after taking education courses. So yes, is it hard? Would I hire anyone that doesn't have it? No, I think it's that combined with full disclosure On how someone is compensated. I think those two things should be the bare requirement Because you can have your cfp And be an insurance agent Who calls yourself a financial advisor? You're always going to find a solution for a client in the form of insurance because you work for an insurance firm, so it doesn't mean that you're a bad person, but that an agent needs to make a living too, and it can be really confusing if you, as a consumer, go to someone, they have their CFP, so you think you're doing the right thing, but don't make that connection that advisor is really an insurance agent. With the CFP.

25:54

Yeah, I agree. I think the CFP needs to grow up and be more like the boards when it comes to doctors or attorneys JDs. I think there needs to be more put into it. I think it needs to be harder. It doesn't matter about experience per se, but it needs to be four years and then plus some I think you should have some sort of college degree as well as all the disclosures. But I also think you can't be in certain industries, right? I think the insurance side is is it is a sliver of what we need to do, right? I think the investment is to, I think all of them are in collectively. I think the industry, to get together and create products that are designed for people that are CFPs to utilize them to fit the fees correctly, as opposed to Oh man, I can make 120% on that life insurance commission. Oh yeah. The issue is that it needs to be built around that market. What

Valeria Rivera, CFP®: 26:51

actually moves the needle are the large companies, Oh. Can you hear me? Okay? What moves the needles are the large companies who have all of the lobbying power that are fighting so hard to make it as confusing as possible to break down any integrity that exists. So as long as we continue to have like super PACs that exist, then this will continue to be a thing. And at the end of the day, our country, not to be a conspiracy theorist here, but our country thrives off of people not knowing. They thrive off of that. The people who make the least amount of money, the underbanked, pay the highest amount in fees. That's why there are stadiums named after payday lenders. So this isn't going away. And what we can do like I think about what we can control is most of us have cell phones and it's continuing to educate and use solid resources like nerdwallet. com is a really awesome resource to understand what am I looking for when hiring someone? What are my options? Because if we're waiting for like government or a big industry to fix things,

28:15

it's not going to happen. And that's why we need to do more of these. We all need to, in our community come together even more so because we're not in competition with each other. We're in competition against them. And third, it's going to be up to us. The problem is there's not enough of us right now to serve everybody. I'm 40 clients and I am almost halfway there and getting to the point of maybe it's 35. I'm one person, right? I scale and add more people. Yes, probably. But what I'm saying is there's just not enough of us to go around. So even if we fixed and educated everyone with everything that we're doing and they come crashing to our doors, there's not enough of us. There's just simply not.

Valeria Rivera, CFP®: 28:57

There's not. And the other part too, is the people who are coming out of school, who know that financial planning is a career, and they're seeing these ads about. The potential you can have within this career. Where do they go to actually build their career? That's the part where I don't have a real answer because I can say that things are well for me now after all of The struggle right and I don't say struggle enough. This is so sad for me But all because all of those things were important. They made me who I am today They made me tougher. Could I have done without some of them? Yeah, it would have been nice to not have been crying on the train so much, but it's all good. It's where I'm at. But I think about all of those young people who are coming out of school and they want to go into a firm. They want to go into planning. I don't know where they go. I don't know what actually exists for them in a way that isn't them like selling their soul. Or if they don't come from an affluent background, how you bring on clients when you don't know people with money. I don't have the answer to that.

30:06

I don't either. I don't either. It is a riddle that needs fixed, but I don't have those answers at this point. Alright, as we get to the end of this, I was asked one final question, and that question is, what piece of advice, idea, concept, quote, don't matter, do you want to leave our listeners with that will encourage them to take that next step in their wealth journey to reach out to one of us? So they can get moving fast.

Valeria Rivera, CFP®: 30:31

What I want people to think about is why not you? Why not you? Why can't you have this? Why can't you have that job? Why can't you have that brokerage account? Why can't you have that Roth IRA? Why can't you have your life insurance policy in place? Whatever it is. Like, why not you stop thinking that this is for them and this isn't for me. That is bullshit. Why not you? That's my take on everything now is like, why not? You

31:00

heard it here from the first gen queen herself. Why not? The proceeding program was sponsored by black mammoth. Any awards rankings or recognition by unaffiliated third parties or publications are in no way indicative of the advisors, future performance, or any individual clients investment success. No award ranking or recognition should be construed as a current or past endorsement of black mammoth. Information regarding specific awards, rankings, or recognitions is available on the Black Mammoth website, www.black mammoth.com. All investment strategies have the potential for profit or loss. Investment strategies such as asset allocation, diversification, or rebalancing do not assure or guarantee better performance and cannot eliminate the risk of investment losses. There are no guarantees that a portfolio employing these or any other strategy will outperform a portfolio that does not engage in such strategies. This broadcast should not be construed by any client or prospective client as a solicitation to affect or attempt to affect transactions and securities or the rendering of personalized investment advice due to various factors including changing market conditions. The information discussed in this broadcast may no longer be reflective of current positions or recommendations. While information presented is believed to be factual and up to date, Black Mammoth do not guarantee its accuracy, and it should not be regarded as a complete analysis of the subjects discussed. The tax and the state planning information discussed is general in nature, and is provided for informational purposes only, and should not be construed as legal or tax advice. Listeners should consult an attorney or tax professional regarding their specific legal or tax situation. Past performance is not indicative of future results.