Episode 6 Transcript: You, Your Money, and Finding Yourself in the Deep End

Molly Wood:

Welcome back to Everybody in the Pool, the podcast that dives deep into the climate crisis and comes up with solutions. I'm your host, Molly Wood.

Now you know one of the things we do on this show … or will do … as time goes on … is talk to people who have decided to pursue a career in climate … or have somehow found themselves in the pool … realizing that this is a huge deal … that affects all of us …

And today’s guest is in that category … someone who realized that her chosen profession isn’t *obviously … related to global warming and the climate crisis … but it turns out … it’s a big part of what she does.

Farnoosh Torabi:

I'm Farnoosh Torabi. I'm a personal finance journalist and I currently host the podcast, So Money, and I have a book coming out that I'm really excited about, if I can plug it. It's called, it's called A Healthy State of Panic. Yeah.

Molly Wood:

That's on the nose. That hits close. That hits a little hard right now, Farnoosh.

Farnoosh Torabi:

That's the point. That's the point. It's just, just going with it. Just capturing the zeitgeist. Yeah.

Molly Wood:Ok so … you know I have this three-part strategy for what you can personally do … to address the climate crisis … I call it VIA … yes … like the Starbucks instant coffee. It’s great for backpacking. It stands for vote … invest … and adopt.

Vote … obvious. Adopt … I mean adopt the things like the shampoo bars and the reusable paper towels and the door-to-door microplastic recycling services … that’s coming up in a future episode … adopt the solar panels and the electric bikes and eating less meat and consuming less … all of those strategies go under adoption.

And finally there’s invest. Which … I know we’re only six episodes in … but kind of the whole point here is that it matters where your dollars go. Whether it’s how you shop … like I just said … or where you buy a home … or what’s in your 401k … or where you *bank …

So Farnoosh … in the course of helping people understand how to invest and save money … came to the pretty obvious conclusion that … personal finance … increasingly … is inextricably linked to climate considerations. And now … she's in the pool!

The podcast … So Money … has been around since 2014 … and Farnoosh says developing the show was a combination of passion … and practicality …

Farnoosh Torabi:

I was ready for deeper conversations about money, and I was also my mom for the first time, and so I was looking for a little bit of a low frills, low, uh, you know, low, like I didn't have to like, put on makeup and a low lift.

Molly Wood:

Love about that. Yep.

Farnoosh Torabi:

You just hit record and go. And it was all your years of experience. And I studied broadcast and so I was familiar with the medium and I, and then to, to talk about money on a podcast from the perspective of a woman and a mother and a breadwinner I think was fresh at the time. And so it, uh, you know, you just cross your finger sometimes that these projects take off and that they can endure, and it certainly has.

Farnoosh Torabi:

And I think my trick is to just not be too strict about it, that I obviously have points of views. But I really want this show to meet where the audience is at and the audience changes, and the audience evolves and grows. And the best kind of review I get is somebody who's been with me from the beginning, but her life has completely evolved.

Farnoosh Torabi:

And all the while the show has been relevant to her as she has gone to change jobs, get married, maybe get divorced, have children, not have children. And so that to me, feels. I feel very proud of that, where I feel like, oh, this show has managed to like, keep her interest all of these years and stay relevant to her as her life's really, um, gone through so many changes.

Molly Wood:

Mm-hmm. I think there, you know, there's so many parallels there because, um, yes, we all get dressed and buy skincare and buy cars and buy, you know, whatever it is that other magazines feed us. But the truth is we all have to make money and figure out how to deal with our money in a way that makes us safe and secure,

Farnoosh Torabi:

Mm-hmm.

Molly Wood:

In our lives.

Molly Wood:

And relate to this strongly as a human and also a business journalist who came to the climate conversation. as a capitalist effectively.

Farnoosh Torabi:

Mm-hmm.

Molly Wood:

We can get a lot done with activism, you can get some done with politics, but most of what you're gonna get done is with money. And I wonder how in those years you have found yourself, uh, maybe more often tackling climate as a topic in personal finance, which is maybe a little counterintuitive to

Farnoosh Torabi:

Mm-hmm. I would say that I, I did a really big deep dive a couple of years ago, about a year and a half ago I was, uh, contributing. I was at CNET and one of our big projects was when I first started, I actually, um, uh, can I take credit for it? I kind of came up with it. Uh, you know, it was just like a pie in the sky idea.

Farnoosh Torabi:

And then the team, of course, that I had that was an amazing team, like put the, was the engine behind it. But I was, what really started it was we had our, one of our first really, really big storms as homeowners in the suburbs. This was 2021 or 2022. And I remember being away for that storm and coming home to a neighborhood that where my neighbors had all their furniture out to be picked up by the trash because it had, they had, their homes had flooded and we had been so frightened that whole like three, four days of storming that we were, you know, we were calling neighbors, can you like poke your head into our house through the windows?

Farnoosh Torabi:

Can you see water damage? Like fortunately we were. We were, uh, spared for the most part. We had a little bit of water damage in our basement, but it really got me spooked. And then simultaneous to this, I have parents who live on the West Coast and they were experiencing a different set of climate threats including forest fires.

Farnoosh Torabi:

And so they had like the air pollution going on, the fires going on, the heat. Then they also, before that they had drought. And I'm thinking, you guys should move. You know, like, this seems like not a sustainable lifestyle, place to live, retire. And I brought that conversation to an editorial meeting the next day and I thought, you know, there is so much to unpack and explore here at the intersection of where climate's going and what we can do as consumers. 

And this isn't a spending story, but this could even, this, we should write stories about how we might wanna think about redesigning our lives and re-architecting our lives. All these goals that we have maybe to become homeowners or, you know, um, start families, live in certain places. Should we rethink the calculus for all of these big life decisions which carry costs?

Farnoosh Torabi:

And so that, you know, the, from that kind of a, from that angle, but all the way to like a more sort of, um, more zoomed in article where it's like, okay, how when I, when I spend money or when I go to the grocery store or when I think about my budget, you know, there's so much, the spectrum is very wide when you think about all of the topics to tackle under this umbrella of the cost of climate change.

Farnoosh Torabi:

And so we kind of ran with that. We ended up, um, I spent, so the whole team, like months and months just writing and interviewing and we did multimedia video podcasts. We talked to folks who, for example, the year before were in Texas and had that flash freeze experience, which, you know, they weren't completely unprepared for their homes.

Farnoosh Torabi:

Were not structured for it. But, um, this one guy who talked about walked me through his home. The pipes froze and they had an infant and all the expenses, and luckily he was handy and was good at watching YouTube videos and figuring out on his own how to, you know, thaw pipes. And, but he said it would've probably bankrupted him had he had to like, hire a crew or leave the home.

Farnoosh Torabi:

And it was just, you know, it was, it was maybe a little late to be covering this stuff, but never too late. Also.

Molly Wood:

Never too late. Um, not even a little bit.

Farnoosh Torabi:

So increasingly, it's become a big part of the conversation, I'd say on the podcast and just in general talking about money.

Molly Wood:

Yeah. Let's, um, let's talk about some of the topics that you covered from kind of, let's start with that daily cost, because I think that's a way that people don't necessarily think about it. Um, in terms of, you know, you say it's already costing you money. Climate change is already costing you money.

Farnoosh Torabi:

It's already costing you money. Yeah. Whether it's just going to the grocery store. I mean, right now, of course we talk a lot about inflation and we, and we think about the drivers of inflation and, and almost never do we talk about climate change as a driver of inflation. We think, oh, well all the Fed just has to raise rates and then inflation will come down. 

It's like, yes, maybe, but also the planet is still getting hotter, so that is not going to help inflation it. You know, I have to take a, a beat here though, Molly, and I wanna preface that like, sometimes I feel icky talking about like money and climate change because it's such an existential, like the world could end, right?

Farnoosh Torabi:

So like, here I am, like here's how to save money on strawberries. Um, so I just wanna make that clear that this, that I. Yeah, that my goal is not to help people just find a way to save money, and that's the workaround, um, with climate change. But it's really about how to recognize that climate change is happening and as consumers, but also as investors and as planners and as humans, how can we, uh, you know, be more strategic as far as like, all these decisions that we make, that we spend money towards, that we invest in to, um, protect ourselves, yes.

Farnoosh Torabi:

But also create impact at the same time. Um, so if we all, for example, like if you decided I'm not gonna move to Miami, even though the taxes are great, you know, I have so many examples of people I know or people I friends of friends who've moved to Florida and for the taxes alone, and it's like, yeah, but you know, forget the fact that your house could also get washed up, but you know, the message that you're sending, um, I, I questioned that. 

You know, it's like, what's the impact? People don't think about these things when they choose homes. And even still, when I called, you know, the National Association of Realtors and said, you know, what are you noticing in terms of the choices people are making when it comes to real estate? And they said, you know, the Malibu homes are still selling like hotcakes and they're still fetching top dollar, and so are the homes all around the coastlines.

Farnoosh Torabi:

And so I, this is the where I get stuck. Yeah,

Molly Wood:

it's all an awareness conversation, you know, like I, I think that this is, to me, uh, believe me, I get it. Like one of my kind of taglines and keynote speeches is, will capitalism kill us or save us, or both because it is sort of awkward to think about like, what does this, but in the short term, this is how many, many people are going to experience this.

Molly Wood:

They're gonna experience it as a shock to the system, whether it's property destruction or, you know, you talk about healthcare prices because of pollution or injury, a tree falling on you. All of that stuff adds up and. When we invest and make choices with our money, we, that is massively impactful. Like that's how things add up, the way that people direct their money, whether it's strawberries property in Miami or E S G funds.

Molly Wood:

Right? I mean, when you think about. All my permission to say we're here to talk about money

Farnoosh Torabi:

You know, and that's a great first foundational step is just the awareness piece of it. 

Um, and in talking to folks who actually work in, say, real estate, um, who I say, well, what's the shoe that has to drop besides another hurricane? Which apparently, like, apparently there are not enough hurricanes, uh, that would convince, uh, a determined coastline buyer to not buy on the coast.

Farnoosh Torabi:

They said, you know, what would have to happen is that the insurance companies wouldn't insure the home, that a mortgage for that home would have a double-digit interest rate.

Molly Wood:Now … as we know … we are in fact creeping closer to this reality … certainly in California … where several big insurers … like State Farm and AllState … have said they won’t write new homeowner’s policies … anywhere in the state … because they’re simply losing money here … the fact is that premiums … may have to be significantly more expensive … in places that are at high risk for climate-related damage.

As for banks … they are absolutely starting to consider climate risk around lending … although … and we’ll talk about this in a little bit … a lot of them are also still investing your deposit money … in big oil and gas projects … at the same time.

We also talked about the ways in which the climate crisis … exacerbates the wealth gap … how rich countries emit more and poor countries suffer … and closer to home …

Farnoosh Torabi:

In terms of protecting yourself from climate change, that costs money. And until there's infrastructure from the government to level that playing field, there's going to be a world where those who wanna insulate from the climate risks, they're gonna, they're gonna match a certain demographic, a certain. Sort of purse, wallet, demographic, you know, because like just getting flood insurance or just being able to, um, escape a natural disaster or just being able to pay more for things because, um, it's quote unquote sustainable or recycle, you know, that that stuff costs more.

Farnoosh Torabi:

It comes at a premium. And so, those that may not have the, the money, the resources, um, are gonna suffer more at the hands of climate change. They're not gonna be able to be as nimble. They're not gonna be able to afford things that would maybe protect them. Um, like the insurances, the infrastructure, the homes, the technology that's going to basically keep them a little bit more protected and ultimately help them save money on the backend too.

Molly Wood:

And yes … we determined … this is where we ALSO need policy … but as people start to feel the pain personally and financially … that may drive them to keep demanding … that policy.

Ok time for a quick break … by the way … if you’d like to get an ad-free version of the show … please check out mollywood dot co … there’s a link about halfway down the page … where you can subscribe to the premium version … at Acast Plus.

[BREAK]

Molly Wood:

Welcome back to Everybody in the Pool … I’m talking with Farnoosh Torabi … host of the podcast … So Money … and in the second half of our conversation … some tips … on how to use your money wisely … in the climate economy. Here’s Farnoosh.

Farnoosh Torabi:

I think it, I came across a quote, I think it was Neil Degrassi Tyson who said that the, at the point at which climate change will become something that everybody cares deeply about is when it starts to affect our finances.

Farnoosh Torabi

You know? Um, it's not just a matter of putting on sunscreen anymore, it's a matter of actually holding onto your money because, it's going away.

Farnoosh Torabi:

Climate change doesn't just create natural disasters. It also, it, you know, lives are lost and also money is lost. And if you care, if you care about nothing else, I think everybody cares about money.

Molly Wood:

Yep. I'm about pull every lever and pretty much everybody cares about money.

Farnoosh Torabi:I think, yeah, go ahead.

Molly Wood:

Yeah, talk to me about investing. That's sort of a key. You know, I'm about vote, invest and adopt, and talk to me about how. Climate conscious consumers with the income to be able to invest, um, can go about that in a way that might actually be impactful.

Farnoosh Torabi:

Well, you know, I first started to explore impact investing. Um, there was a, it was an index, it was called the DOM index. It was back in the early two thousands, I think that I first came across it back at my internship at Money Magazine, and it felt like such a like, Oh, that's cute. You know? Or that's thoughtful.

Farnoosh Torabi:

But will it actually make investors rich? And the verdict was still out. But fast forward now, we have decades now worth of data points that that suggests, not only suggests, but confirm that it is a powerful way to. Make an impact on the environment, but also your wallet, that the returns on impact investing are really strong.

Farnoosh Torabi:

And they were, you're actually quite strong during the pandemic too. So, um, just saying that at the out of the gate, because I think that there is still a lot of pessimism and, you know, oh, that's a nice thing to do. But no, actually it's, it's a powerful thing to do when it comes to your ROI as well. And a lot more, uh, financial institutions have gotten into this game.

Farnoosh Torabi:

And I think for the everyday investor, where I would begin to explore this is if you've got a workplace retirement plan like a 401k or a 4 0 3 to reach out to that. Retirement planner and ask about these types of investments that they may already have designed. And additionally, there are platforms like Betterment and others that this is kind of their jam and they do this.

Farnoosh Torabi:

And if you wanted to, in addition to maybe your 401k, start an IRA or brokerage account through these platforms that, uh, focus on, uh, I guess there's different ways to, to describe what we're talking about. There's impact investing, there's E S G, um, socially responsible investing. Um, and there's also, what I came across is I just wanna get, it's, um, direct indexing.

Molly Wood:

I have not, and I saw this in your article and I, that was my next question is what is that? How do

Farnoosh Torabi:

Yeah, so it's at the time not a lot of banks are offering this. Uh, Vanguard at the time of my reporting was offering this. They may still, but essentially it allows in you to buy individual stocks in an index fund and omit the companies that you think are problematic, risky. Um, so it's almost like. You know, a D I Y index fund where you can pick your own stocks.

Farnoosh Torabi:

And so, you know, maybe you don't love what the offerings are that the banks have put together because you have very clear and different standards. And I think that's still what's missing a little bit in this space is this standardization because interpreting what is impact or what is environmentally friendly or environmentally sound.

Farnoosh Torabi:

I mean, everybody, I think we can all agree to a sort of basic standard of that, but then some investors are more selective than others and, and, and it gets to be a little discretionary at that point. And so I think there's a lot of room and growth still for that. So as an investor, it, it can feel overwhelming a little bit to, or to, to enter this space in, in the marketplace and kind of already know where to go and feel good about those investments, especially if you're coming with a certain set of principles that you want met, certain criteria that you want met.

Farnoosh Torabi:

Um, so, so the direct indexing is maybe currently one solution where you as an investor, but you know, a lot of us don't want to get into the work of that. You know, like, that's why I love passive investing. It's why I love index indexing, because the work's already been done and I can just cruise. Um, but if you are somebody who really wants to get in there and roll up your sleeves, then you know you can.

Molly Wood:

And then what is happening in banking? That's another thing that you've written about is the, the kind of rise of sustainable banking, but also what banks are doing. With our money. Maybe it's a combination of banking alternatives and questions to be asking your bank.

Farnoosh Torabi:

So I learned through my research that a lot of the big banks, for example, um, I'm talking big multinational banks. I won't name them, but we know who they are. If you look at their, uh, investments as far as where they take our deposit money, you know, they, when you put money in a bank, And they give you interest, but then they, they take your money and then they use that money for investments of their own.

Farnoosh Torabi:

And so if you look at, there was a research recently done piece of research that looked at where those investments go and a lot of it, I think, you know, you're not a majority, but a significant chunk of those dollars get spent on projects that if you are someone who cares deeply about climate change and improving upon that, you would not be happy.

Farnoosh Torabi:

It's a lot of, you know, fuel pro, you know, fossil fuel projects. Um, a lot of oil and, you know, not carbon neutral, let's just say. which we are not always privy to. Uh, we could probably dig for them, but they're not, it's not like on their front page.

Farnoosh Torabi:

You know, here, welcome to x, y, Z bank with your deposits. We are, you know, glad to say we're investing in all these oil projects.

Molly Wood:

Right.

Farnoosh Torabi:

Um, it's not a, it's not a great PR move. …

Molly Wood:

I do think that like your reporting shows and kind of the, the, the, the thing about the climate story is that it's actually every story and so much. I mean, I just sort of wanna reflect back this idea that fundamentally the cost will come for everyone, right?

Farnoosh Torabi:

Yeah. Because it also, it makes vulnerable this concept of the American dream and how people traditionally become wealthy through real estate, through the stock market. And if the, these traditional ways of getting quote unquote wealthy or achieving the American dream are threatened that, um, that's really hard to stomach for a lot, for a lot of reasons.

Farnoosh Torabi:

And I think, you know, when I hear that State Farm is pulling outta California, I'm thinking, oh my gosh, you know, maybe home values will come down because you can't sell them. And then what is that gonna mean for this concept of home ownership, uh, which we were already, we're already poking holes at for good reason.

Farnoosh Torabi:

I think not everyone should be a homeowner and not every home deserves to be bought. Um, but I, it continues to. Put more question marks out there about like what, because we're human as humans, I think we gravitate towards rules of thumb we gravitate towards, uh, following the herd. And it's not always the best way to make decisions, but it that it's who we are at the core, right?

Farnoosh Torabi:

We are like survivalists. And so climate change really pokes holes at what we have always thought to be like the right way to do things when it comes to investments and, uh, and saving and making purchasing decisions. Um, it, it's hard to change. I mean, that's really what the end of the day. But you know what?

Farnoosh Torabi:

It's go whether you, my, my, here's my question. Do you wanna be in control of your decisions or do you wanna just let climate change make the decisions for you? You know, that's really what it comes down to. The information is out there. We have the data. We see already what it's doing and how it's devastating households and families and communities. Well, I don't know. What's the next shoe that has to drop? I'm getting flood insurance, I'll tell you that much. I am, I live in a flatland on a flat piece of property, but we're not even in a flood zone. I didn't even know you could get flood insurance if you're not in a flood zone. But you can. Uh, cuz I don't trust the flood zone maps.

Farnoosh Torabi:

So I just know what I see and I see, like I said, people with their furniture out on their front lawns ready to be picked up by waste management following a storm. And, um, think I have, you know, I'm, and that's not even all of it. There's the mold, there's so much that you have to now work through.

Farnoosh Torabi:

Um, it can completely devastate your savings and your financial livelihood in addition to so much else.

Molly Wood:

That’s Farnoosh Torabi … host of the podcast So Money … she has a book coming out in October called Healthy State of Panic … and … although you know I like to stay away from the problems and focus on the solutions … I don’t think that’s a bad mantra for how we should be approaching things right now.

Because here’s the deal … climatologists are tweeting phrases like “totally bonkers” about what’s happening with global temperatures right now … ocean temperatures in particular are rising much faster than anyone predicted … Antarctic sea ice is at record lows … atmospheric carbon dioxide is at record HIGHS … and this June is already the hottest … globally … on record and you know what … it’s still probably going to be the coolest one we see in our lifetimes.

Yeah. I know. Get in the pool. Everything matters … nothing is too big or too small. And yes … where you put your money … REALLY matters.

[MUSIC]

And that's it for this episode of Everybody in the Pool.

Please like, subscribe, and leave a rating on Apple Podcasts if that's what you're using. Email your thoughts and ideas to IN at everybody in the pool dot com. And for an even deeper dive, sign up for my newsletter at mollywood dot co. Together, we can get this done. 

See you next week.