Personal-finance expert Lynnette Khalfani-Cox is not 5 feet into the reception area of News Corp offices in Manhattan to check in for an interview with MarketWatch before she runs into an old colleague who is now running one of the divisions in which Khalfani-Cox used to work, before she was laid off, some 20 years ago.
She has been back before, but not quite like this. She’s here to talk about her new book, “Bounce Back: The Ultimate Guide to Financial Resilience,” in which losing that dream job in 2003 and turning the defeat into a successful career features prominently.
“It’s kind of surreal to be back here, but it feels like a full-circle moment in so many ways,” says Khalfani-Cox, settling into a conference room.
After years of reporting for Dow Jones Newswires and the Wall Street Journal, including a stint as an on-air correspondent for the Journal on CNBC, Khalfani-Cox picked herself up immediately from her layoff and started her own financial-education company, the Money Coach, with her husband, Earl. She spent years helping people get out of debt, writing numerous books on the topic, including the bestseller “Zero Debt.” There have been many adventures along the way, like being the personal-finance expert for “The Dr. Oz Show” and raising three kids. (A disclosure: She also wrote a freelance column for WalletPop, a website I ran that disbanded in 2011.)
“My last day on air at CNBC was March 1, 2003, and that same month I started my company. And so now I’m 20-plus years [into it and] going strong. And, frankly, I have not looked back,” she says.
The 10 dreaded Ds
Being downsized is not the only challenge covered in “Bounce Back” and a corollary “Bounce Back Workbook” that’s being released at the same time. Khalfani-Cox goes through nine other “dreaded Ds” — divorce, death of a loved one, disability, disease, disasters, debt, damaged credit, dollar deficits and discrimination — most of which she has also gone through herself and emerged on the other side.
Her key to handling all of these stems from the way she handled her layoff, which was with a belief that you can’t let a bad circumstance derail you from your long-term goals. You deal with it and keep going.
“People go into retrenchment mode when they’re facing a financial crisis. The tendency is to kind of lock down, and in some cases even double down on doing the bad things,” says Khalfani-Cox. “People will ask me, what should I do first: pay off my debt or save? And I say you have to do both. The two are not mutually exclusive, and it’s in your best interest to do both.”
Take what happens when people resort to 401(k) loans and hardship withdrawals, for example. Typically, people will stop contributing while they are withdrawing money, which makes sense intuitively, but not financially for the long term. “They don’t realize they’re compounding the issue,” says Khalfani-Cox. “You absolutely should keep contributing, especially when you have a really robust year for the stock market, like we did in 2023.”
See: These 20 stocks soared the most in 2023
This is how Khalfani-Cox learned to manage as she went through that job crisis 20 years ago and needed seed money to start her company. She was spending down retirement savings because she had no emergency funds, but, at the same time, she started to save again for retirement with proceeds from the company.
“I absolutely had a period where I saved less, but then my husband and I each opened a solo 401(k), and we just max it out for both of us every single year,” she says. “Our retirement strategy is really about broad diversification and being in areas where we feel most comfortable. So I absolutely invest in the stock market, but we also own eight investment properties and we’re using real estate as part of the cornerstone for our retirement strategies.”
The ‘D’ most people don’t talk about
Dealing with real estate led Khalfani-Cox to include a candid chapter on discrimination in “Bounce Back.”
“As I was writing, it occurred to me that so much of personal finances is judgment-laden. It’s like the morality police come out and start pointing fingers, telling people that any shortcoming they have is a sin practically,” she says. “There is very little recognition of the systemic structural forces that are at play that can sometimes be barriers to people achieving financial security. So I just wanted to put it out there.”
Discrimination in the financial sector can come in all sorts of ways for many communities, whether it’s about race, gender, sexuality, disability or some other factor. Most of it comes down to missing out on opportunities or being offered less in some way.
The story Khalfani-Cox shares in her book is about getting an appraisal on her house for a home-equity loan that was $ 100,000 less than market value, as an African-American applicant in a majority-white town. “I cannot tell you how many Black people have had that experience,” she says. She and her husband appealed through the bank, and it sent a second appraiser — this time an African-American man — and got a better result.
“There’s a whole issue that the financial-services industry needs to address when it comes to financial inclusion, and they’re very much aware of it,” says Khalfani-Cox. “It needs to be addressed on multiple fronts, and not only from the standpoint of what’s going on in terms of housing.”
The message of “Bounce Back” is that the way through it — and all the other disasters that can strike — is to keep fighting.
“My sisters and I always use this expression: One monkey don’t stop no show. That means the show must go on you, you power through things,” says Khalfani-Cox. “Change is going to happen to all of us. It just gets dropped into your lap whether or not you want it. But change is something external that happens to you. Transition happens within you, and that’s when you process the change that has occurred in your life. It’s an opportunity for a new, potentially brighter future.”