Why Building Wealth is Hard

Tanya Menendez
Feb 6 · 10 min read

The system is set up in a way that makes it easier to fail than to succeed.

At the new Snowball Wealth office in San Francisco, image credit @stevenleyvaphoto

If you grow up working class and are a first-generation college grad, it’s difficult to know the exact steps to build wealth for the long term, eventually retire, leave something behind for your family or contribute to a cause you care about.

Building wealth is not intuitive. The system is set up in a way that makes it easier to fail than to succeed.

I remember the first time I felt truly scared about my financial situation.

I was 18 years old and had over $20,000 in debt.

How does an 18-year-old accumulate over $20,000 in debt?! More importantly, how does an 18-year-old pay it off?

Let me explain.

I got a job as soon as I was legally allowed to work, around 14 or 15 years old, at a non-profit. I later worked in restaurants as a hostess and then as a server, so I made about $2,500/month. That felt like a lot for an 18-year-old. I felt proud.

I loved the freedom money gave me, but I didn’t really have a concept of investing for the long term.

I was well-intentioned, but not very well informed.

This is what I did with my money: I first got a CD account (since my bank offered it). I didn’t really know what else was available, but it sounded good. I also paid for my classes at a community college while I was in high school for extra credits, and a few other things I needed for high school extra-curricular activities. While I had some money saved, I put some expenses on a credit card. Not terrible or uncommon, but also not ideal. I also splurged and took a big trip abroad with my sister which racked up about $10,000.

18 years old, having fun in Costa Rica and racking up debt.

Here’s what really did me in… While I was at the mall, I was offered a lifetime package for laser hair removal. For only $8,000, I could get unlimited hair removal for the rest of my life. I thought the low monthly payments would be manageable for me since I had a job. That was a great deal back then… WHAT WAS I THINKING.

When I realized I was in over my head and couldn’t make payments, I was scared. I initially didn’t tell my parents the details of what was going on, mostly because I didn’t want to worry them or have them tell me that spending $8,000 on laser hair removal was a bad idea. I knew it was a bad idea and already felt bad and embarrassed about it. At the same time, I wanted to get out of it and didn’t know what to do. I was able to stir up the courage to ask friends and family for help on what to do and realized I wasn’t the first nor will I be the last to have credit card debt. Although it temporarily hit my credit score, I was able to negotiate the amount down after some long phone calls… getting the debt down to a manageable amount before getting to college. Slightly traumatized by it all, that summer I paid big chunks of it off with waitressing money and eased my financial anxiety. Thank goodness.

After college, in 2009, I joined Goldman Sachs full time and moved to New York. I had a goal to build up my emergency savings enough to quit my job to either go back to school or start a company.

I began seriously thinking about my finances and studying budgeting, forecasting, and planning when I decided to quit my job at Goldman to co-own a leather goods line. As an entrepreneur, I had to pay very close attention to my own finances and all financials for the company. Suddenly it became clear that through careful planning, I’d be able to not just have financial freedom personally, but I would also be able to hire and support a network of small businesses to empower them financially too.

Me in NYC with Universal Elliot, one of the first factories I convinced to join the Maker’s Row community to help get them exposure and grow their business.

You can’t open a door that you don’t even know exists.

Everyone has their own path toward financial freedom, some with more hurdles than others. I had gone through life collecting and pruning through seemingly random financial advice. I asked around to try to figure out what the right thing to do was and then pattern-matched to put the pieces together. I read books, articles and watched YouTube videos. All of this still didn’t compare to having access to financially-savvy people around me.

I made many mistakes early in life, all with short term thinking in mind. It still makes me a wince a little.

Imagine if I had invested all of that money? I can laugh about this now, but that traumatized me enough to set me straight.

The reality is that a lot of people unintentionally get into bad financial situations, even if they do everything right. Sometimes it’s not laser hair removal, but it’s a large hospital bill for an unexpected accident. Anything can happen and it can be devastating if we’re not prepared for it.

I understand now that the financial hurdles I dealt with didn’t happen because I wasn’t capable of being smart with my money, but largely because I didn’t know what I didn’t know. For example, if you are the first in your friend group to have a child and don’t know anyone with a 529, how would you even know to get one? Sure, I can Google it, but not if I don’t know what it is first or how it can help me. If you’re not exposed to these financial tools, you don’t know that using them can be game-changing.

There is a misperception that personal finances are complicated and mysterious.

Even if you start to learn about personal finances, the doubt and fear of failing can feel insurmountable.

How was it so easy for me to get an $8,000 laser hair removal package but so hard to understand how to buy my first $200 ETF?

How was it so easy for me to get a credit card but why was an investment account so complicated?

If we make long-term wealth planning easier to visualize and realize, I believe we can create a more meritocratic society at large. What if we make it as easy to build wealth as it is to accrue debt?

Exposure is half the battle. You can’t be what you can’t see.

We often don’t have role models with smart habits for us to emulate, and often our parents are barely figuring it out too. This is even more challenging for first-generation graduates (33% of college students BTW!) and Black and Latino communities.

Latinas are statistically worse off than all other groups when it comes to attaining wealth. According to this study by Prosperity Now, Latinas have an average of $100 in wealth, compared an average of $200 for Black women, compared to an average of $28,900 for White men in America.

I want to close that gap.

I was lucky enough to be one of the few Latinas in America to raise over $2M in venture capital as a Co-Founder of Maker’s Row. Through that experience, I met Pearl Chan (now my co-founder!). I was surprised to hear how Pearl had similar financial challenges and had to figure out how to piece it all together too. Oh, I’m not the only one.

I partnered with Pearl on this idea and we brought on Justin as a technical co-founder. I feel lucky to have partnered with people who understand the importance of financial confidence for the next generation, and the urgency to do this now.

Money is Emotional.

Money is a part of our culture— whether it’s wanting it, flaunting it or agonizing over it.

Beyond money for the short term, building long-term wealth is core to democratizing access to opportunities. Financial confidence and security allowed me to leave a job that wasn’t right for me, a boyfriend that wasn’t a good fit and gave me the ability to start another company with a mission that is impactful and personal.

I want to help others reach financial security to achieve their full potential and provide for generations to come.

After 150 hours of 1–1 coaching, I now see these common challenges:

  • Decisions related to money are very emotional and personal
  • Personal finance is rarely taught in schools
  • There is no clear path or blueprint to financial success
  • People default to short-term thinking
  • Talking about money is taboo and uncomfortable
  • We live in a culture of consumption and debt

We become used to these things, which makes it hard to break the cycle of old habits. There’s a saying in Spanish, “La costumbre es mas fuerte que el amor” (habits are stronger than love, meaning we often stay in situations that are bad for us). The same can be said about our approach to money and power. We stick with what we know.

It can be more comfortable to stay middle class or working class because it’s what we know. We are afraid of the unknown, which means we are afraid of our own power.

How we are changing this.

Because money is emotional, we know that there has to be both a human and community element to helping people with their personal finances. Our team is building a first-of-its-kind technology platform that helps users tackle budgeting, debt, investments, and more through personalization and behavioral design. We know that technology is only half the equation, so we’ve paired this with affordable financial coaching video calls and a supportive community.

Snowball x Runway x WOCIT happy hour in SF

We are partnering with organizations and groups like Women of Color in Tech, HOLA @ Google, Pincluidos and Blackboard @ Pinterest and many more to begin raising awareness and building community.

Despite financial and emotional hurdles we all face, I have seen firsthand how we can make lasting change. We work with directly with our members to develop new habits and learn new wealth-building techniques. Early on, we are doing things that don’t scale, intentionally, so that we can really understand the pain points and effectively solve them with the help of ethical AI and machine learning.

We’re working with Snowball members to help them understand how to tackle their debt, get ready to invest and optimize their budgets. It takes an open mind and commitment to do this, but we’re inspired by the success we’ve already seen in their finances and confidence about building wealth. In fact, one of our members saved $22K within a few weeks of her first coaching call with us! Seeing her confidence grow by having access to information with a digestible approach to managing her finances has completely affirmed what we aim to do with Snowball.

We’ve built a v1 of the platform and rolled out a coaching service with pilot user groups. We are building to reach many more by automating some of what we’ve been doing manually. I want to emphasize this — in fintech and in tech generally, there is a trend to automate everything. Our goal is to serve the community and create lasting change. We know this will mean that not everything should be automated, and humans will have to be involved!

We have a beta ready and are fully launching in a few months. There are a few ways you can get involved:

  1. If you want to check out our v1 or sign up for a 1–1 call, you can do that here.
  2. Sign up for our email list here and follow us on Instagram and Twitter. You can also join our private Facebook community.
  3. We are looking for ERGs and professional organizations to partner and do financial workshops together — if you lead a group and are interested, email me at tanya@withsnowball.com

If you have another idea on how to get involved, or just want to confess your version of an $8K laser hair removal financial mishap — please comment below or reach out to me at tanya@withsnowball.com or on Instagram @makertanya.

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P.S. huge thanks to Eliana Murillo, Tricia Wang, Lily Lamboy and Vanessa Pestritto, for helping me review this and for your input and support, TQM ❤

This story is published in The Startup, Medium’s largest entrepreneurship publication followed by +421,678 people.

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Thanks to Pearl Chan

Tanya Menendez

Written by

Co-founder @makersrow and Co-founder @asksnowball

The Startup

Medium's largest active publication, followed by +528K people. Follow to join our community.

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