In a special behind the scenes episode, Bobbi reveals how her own parenting challenges inspired her new book: Launching Financial Grownups: Live Your Richest Life by Helping Your (Almost) Adult Kids Become Everyday Money Smart, and how it can help you. 

5 Secret Reasons I Wrote Launching Financial Grownups

• Reason 1 - I could not get my own almost adult kids to care enough to act and complete the money stuff I knew would be really good for them.
  

• Reason 2 - Things really are different for this generation.
  

• Reason 3 - Parents of my generation parented different up to this point which has had benefits and consequences.
  

• Reason 4 - The kids said they totally got it- but they didn’t.
  

• Reason 5 - I realized my dad was right about so many things, even though I didn’t listen to him at the time.

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Full Transcript:

Grownups: this is a big week for me and I’m super excited but also really nervous. I’m also grateful for your support. Many of you have told me you pre-ordered copies of Launching Financial Grownups and are going to write reviews on Amazon as soon as the book comes out on March 22. Thank you. Thank you so much. And thank you in advance if you are putting this on pause to order your copy right now. Advance sales are a huge thing. 

And like a lot of you guys I have been struggling recently- In my case, we’ve been doing construction in my home and I don’t have access to my bedroom- slash- office- so I’m kind of a nomad when it comes to a place to work and I’m soooo far behind in terms of the ambitious plans to get the word out about Launching Financial Grownups. My husband and I also have had a really bad case of the flu- we’ve tested negative for covid so we think that’s what it is- and so I’ve been totally knocked out for days on end. And then of course-  watching the news it traumatic but I also think we need to be aware and be thankful for all we have- and family, friends and loved ones are at the top of the list. So when I say your support is priceless. I mean it. 

I’ve been mentioning this new book Launching Financial Grownups but what I have not done yet is really talk about WHY the heck I wrote it. So I wanted to share some behind the scenes secrets and insights into my own parenting and money challenges, and how I’ve dealt with them and I hope that can help everyone in this grownup community. 

Reason 1. I could not get my almost adult kids to care enough to act and complete the money stuff I knew would be really good for them. 

When I tried to get them to do things, like open a Roth IRA because they earned good money- they yes’d me but it didn’t get done. I gave them all the tools I thought they needed. They could use my advisor at a major discount brokerage, or they could use a robo advisor, or set up their own investment account or use an app or whatever. I offered to make appointments for them.. nothing was working. You can read more about it in the book but there was always something more urgent- and then the deadline came. In other words- I was failing! 

Reason 2: Things really are different for this generation. Some are really good- like being able to keep young adults on health insurance until they are 26 -but they have also have skewed our perception of when adulthood starts in terms of money and supporting themselves. Kids also have a lot to deal with- many have student debt, they have a lot of social pressure to live a certain lifestyle thanks to social media, they have less structure when it comes to careers thanks to the gig economy and so on. And also inflation - things are super expensive.  And so it’s no surprise that our kids don’t really feel like adults when they hit a certain age. 

Reason 3 We- my husband and I but also parents of our generation- parented different up to this point- and that has had benefits- and consequences. If we are being honest, many of us have prioritized our kids above all else and our strongest identity is as their parent. There were years when I had friends- actual friends- that I would reference as so and so’s mom. And now that they are teens and young adults  what I am seeing with me and some of my friends is that under the guise of helping them, we were sometimes  using money as a way to stay tied to our kids. I remember being lost when our youngest was old enough to get himself to school and his various other activities because I suddenly had sooo much time on my hands. And yes- that’s when we started playing golf more seriously! Joking aside- we are scared of losing of something that has been such a major part of our everyday lives- and keeping financial ties is a way to well, stay tied. 

Reason 4 The kids said they totally got it- but they didn’t. In other words, they didn’t know what they didn’t know. So what do I mean by this. Well, a friend recently told me how proud she was that her child bought their own airline ticket. The child also proudly said that they bought the trip insurance. And they were proud they did this without consulting the mom. But here’s the thing- they didn’t remember what was paid- they didn’t know what the insurance actually covered- and they didn’t check if the credit card they were using (or one that they could have used) carried insurance already so they didn’t even need to buy trip insurance. Think of it like a wingman- but for grownup finances. We need to let them lead but also be there to keep them on track and make sure they have all the info they need to make the best financial decisions. 

Reason 5 I realized my dad was right about so many things, even though I didn’t listen to him at the time. Launching Financial Grownups is dedicated to my dad for good reason. He did so many things right and it’s only now, as I struggle to help my own kids,  that I truly fully can appreciate them. For example: While he was always generous in giving me and my siblings money in college- he made us each sit down with him and present him with the amount of money we thought we would need for an entire semester, and why. And after that we were on our own. He didn’t ask for details - just a broad explanation of what we needed and what it was covering- because he expected us to manage the details on our own. We also all always had jobs- that we got ourselves. I worked at a bakery where I still remember the first $10 I made at the minimum wage job went to pay for a lovely yellow polyester uniform. I did gift wrap at a department store and folded clothing at a retail chain store. He didn’t micro-manage any of this- in fact I’m not sure he could tell you want any of our jobs were and that’s not a bad thing- because it was on US to have that extra spending money. He and my mom were not helicopter parents- but I always felt like they would be there with a landing pad if it ever looked like we were going to crash. 

There’s only so much I can cover in a podcast but there is so much more in the book. You can pre-order Launching Financial Grownups it in all the places but we’ll leave a direct link in the shownotes- and pls stay in touch by following me - and dm-ing me with your thoughts on the book and any questions you may have on instagram at bobbirebell1 and on twitter at bobbirebell. You can get on my newsletter list by going to my website at bobbirebell.com.

Big thanks and congrats to all of YOU - for being financial grownups. 

The buzz on SPACs keeps building. Bobbi shares what is driving the trend, what a SPAC is, and what investors need to know about them. 

Pros of SPAC

#1: It lowers the risk of going public. Let’s face it: a lot can go wrong. Companies are worried that market volatility could tank their public debut. Merging with a SPAC gets them a capital influx much faster and easier. 

#2: It’s faster. Space have no financial history- so the only track record is the reputation of the management teams. For a company, merging with a SPAC can get them funding in a few months. The traditional IPO route which involves a lot of paperwork with the SEC can take as much as 6 months, sometimes longer. 

#3: More control over valuation. With a SPAC merger, the company can negotiate a fixed valuation with the sponsors. 

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Cons of SPAC

#1: Shady history.  Back in the 1980’s SPAC’s were known as  “Blank Check Companies” The industry was full of fraud, and known for scamming investors. A federal law was even passed to crack down on them. Now there are some guardrails in place- for example, if an investor does not approve of a company that the SPAC is merging with they can get their money back. 

#2: A successful SPAC can be incredibly lucrative for the for the sponsor, to the point where there is a concern that they might merge the SPAC with a less than ideal company just to get their big payday. Oh- and generally they have to make a deal within 2 years- so there’s a ticking clock to make something, sometimes anything, happen. 

#3: Investors should be aware that the company that has gone public by merging with the SPAC has not gone through the vetting process of doing all the financial audits and requirements that happen in a traditional initial public offering. So you have to wonder: what do you not know about the company? In other words, it is easier for the company, but riskier for the investor. 

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Follow Bobbi!

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• Twitter- @bobbirebell

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• Website- http://www.bobbirebell.com/

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Some of the links in this post are affiliate links. This means if you click on the link and purchase the item, I will receive an affiliate commission at no extra cost to you. All opinions remain my own.

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FULL TRANSCRIPT:

Financial Grownup Guide: What is a SPAC- and why it is such a hot trend on Wall Street

Hi friends!

If you pay attention to the money and investing related news, which you should be, you have probably been hearing about SPACS- which stands for special purpose acquisition company. They have actually been around for decades-but the buzz has really been building lately. Their rep is that they are last resorts for small companies to go public, because they couldn’t raise money on the open market. But that doesn’t really explain why they are having such a big moment right now. 

So here’s what we are going to go over in this episode:

-What is a SPAC

-Why would a company go public using a SPAC rather than the traditional route?

-What are SPACs so popular now- and what role did the global pandemic play in the trend?

-I'll tell you about the shady history of SPAC's

-What are the risks for investors?

Before we get into it- I do want to welcome everyone. If you are new- this is kind of a special episode. I do these solo episodes on occasion where I talk about a money topic- usually something in the news. 

But most of our episodes focus on having a role model as a guest- a financial grownup as we like to say, sharing a money story that had a big impact on their life and then the lessons we can all learn from their experience. We also have them share everyday money tips that we can put to work right away. If you enjoy this podcast I hope you will take a moment to subscribe, and share it with friends or family that you think might enjoy it. One easy way is just to take a screenshot of the show and share it on social media- and please tag me @bobbirebell1 on instagram so I can thank you. 

Back to SPACs. Let’s first go over exactly what a SPAC is- and is not. 

Think of a SPAC as a shell company set up to buy another company- except it doesn’t necessarily know what that company will be. Usually a team of investors raise the money first- but again- very often without a target company. It goes public as a Special Purpose Acquisition Company but it contains no company. All it has is money kept in a trust. 

Then we have companies that need money- and are on the hunt for the right way to get it. 

So to simplify- on one side we have money with no company, and on the other side we have a company, that it looking for money. 

This is different from the more common way for companies to raise big money in the public markets with a standard initial public offering. But that is really complicated- and expensive. There’s a ton of paperwork, financial audits and regulations. There are road shows, and pitch meetings with institutional investors. And it is super risky. Some of the risks the company can control, but the truth is the depending on what is going on in the world at the time the company wants to go public, a lot of how well that company will do- it can’t control. 

But they have become a really big trend on Wall Street recently. 242 SPACs were introduced in 2020, quadruple the number raised in 2019, according to SPAC Insider. The average size of a SPAC in 2020 was $335 million, that is almost  10 times the amount in 2009.

And there are some interesting reasons why that we are going to talk about. 

Reason #1: It lowers the risk of going public. Let’s face it: a lot can go wrong. Companies are worried that market volatility could tank their public debut. Merging with a SPAC gets them a capital influx much faster and easier. 

Reason #2: It’s faster. Space have no financial history- so the only track record is the reputation of the management teams. For a company, merging with a SPAC can get them funding in a few months. The traditional IPO route which involves a lot of paperwork with the SEC can take as much as 6 months, sometimes longer. 

Reason #3 More control over valuation. With a SPAC merger, the company can negotiate a fixed valuation with the sponsors. 

All this has a lot of appeal during the global pandemic, given how much uncertainty there has been in the global markets. It got a lot harder to raise money the traditional way. So SPAC’s can provide a viable option for capital starved companies to access funding. 

This all sounds great- so what’s the catch?

Well first- their shady history.  Back in the 1980’s SPAC’s were known as  “Blank Check Companies” The industry was full of fraud, and known for scamming investors. A federal law was even passed to crack down on them. Now there are some guardrails in place- for example, if an investor does not approve of a company that the SPAC is merging with they can get their money back. 

Second: A successful SPAC can be incredibly lucrative for the for the sponsor, to the point where there is a concern that they might merge the SPAC with a less than ideal company just to get their big payday. Oh- and generally they have to make a deal within 2 years- so there’s a ticking clock to make something, sometimes anything, happen. 

Third: Investors should be aware that the company that has gone public by merging with the SPAC has not gone through the vetting process of doing all the financial audits and requirements that happen in a traditional initial public offering. So you have to wonder: what do you not know about the company? In other words, it is easier for the company, but riskier for the investor. 

Which brings us to why you should be paying attention to the trend. In my opinion- and this is an opinion, we should look carefully at why a company would choose to go public this way. That does not mean it is not a good investment. It just means, it did not go through the traditional red tape. To be clear, many companies go through the red tape, and no one takes the time to read all the details of what they have disclosed to potential investors. 

That said, once a company is publicly traded, as the calendar mandates, it will have to comply with the laws regarding disclosure. So maybe, if you want to invest in a company that used a SPAC to go public, you might consider taking your time, and getting more information before you jump in. 

Before I let you go- a reminder that I am on a campaign to boost financial literacy by giving out free books. If you want to win a book that has been grownup list approved- all you need to do is either do a screen grab of the podcast while you are listening to it - and post it on instagram and tag me at bobbirebell1- or write a review on apple podcasts and email it to us at hello@financialgrownup.com. You could win a book by one of the authors that has been on the show, or some of the merch from the grownupgear store which you can check out at grownupgear.com.

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Some of the links in this post are affiliate links. This means if you click on the link and purchase the item, I will receive an affiliate commission at no extra cost to you. All opinions remain my own.

After 300 episodes Bobbi shares some of her hardest times as a financial grownup. 

Bobbi shares the Financial Grownup lessons she’s learned from her failures throughout life and how to put a positive spin on those failures.

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