The Investor Diaries

Alex Johnson (0:00)

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Tim Flacke (0:20)

I'm aiming for the stars, and as long as I've been on the moon, I've satisfied.

Alex Johnson (0:26)

That quote comes from one of 50 individuals who were, for the last 15 months, participating in a qualitative and quantitative research project, The Investor Diaries, focused on how low to moderate income individuals, meaning those coming from households with an annual income between $30,000 and $80,000, invest and how they manage their money. The research, which is absolutely fascinating, was done by Commonwealth, and I am delighted to have Commonwealth's co-founder and CEO, Tim Flacke, on the podcast to talk about it. Interspersed in our conversation, as you already heard, will be more excerpts from the voice diaries recorded by those 50 individuals. Put differently, this is a very different episode of Fintech Takes than what you're normally used to, but I think it's one of our best, and I really hope you enjoy it. So without further ado, let's get into my conversation with Tim from Commonwealth.

Okay, Tim, thanks so much for coming on the podcast.

Tim Flacke (1:44)

Yeah, I'm excited to be here, Alex.

Alex Johnson (1:48)

Well, I'm thrilled to have you here, as I was telling you before we hit record.

This was a pitch that came across my desk that I just had to swing at. I'm very, very excited for this conversation. As our audience already knows, this is going to be a little bit of a different episode because we're going to actually be dropping some consumer comments right into the episode itself. Before we get there, I think it'd be great to set a little bit of context. First, for those who are unaware, tell me a little bit more about Commonwealth and what you guys do and what makes you different.

Tim Flacke (2:25)

Yeah. No, I appreciate the chance to start there. Commonwealth is proudly a 501c3. We are a mission-driven organization. It always starts with, well, what is that mission? For us, it's to create financial security and opportunity for really the tens of millions of people in this country who live on low and moderate incomes. And we pursue that work primarily by working with the financial services industry, Fintechs, employers, benefit providers, sometimes policy makers.

Ultimately, to try and influence and result in a good mix of tools and features to help working people have that financial security. A lot of that for us over our, we're actually celebrating our 25th year this year. A lot of our focus has been on savings, and the starting big idea that continues to be our animating, ultimate goal in North Star is to allow even families that don't have a lot of income, ways to actually build up something of lasting value, some wealth, some assets.

And so I think actually that will probably come up in our conversation today. I'm sure, as you probably know, there's just a lot of evidence that as important, as essential as income is for all of us, owning stuff actually matters too. And just to get super nerdy for a second.

Alex Johnson (3:49)

Please, you're in the right place.

Tim Flacke (3:51)

Awesome.

We naturally think about income statements in households, but we also need to think about balance sheets. That really matters in terms of the long term for households and families. And so that's really what we've now had the privilege of working towards for the last two and a half decades.

Alex Johnson (4:11)

That's fantastic. Yeah, I mean, to build on your point there for a second, I mean, I'm constantly struck when I just am covering what's going on in banking and fintech by the distinction that you see when people are talking about low to moderate income households versus wealthier households. And with one group, you tend to almost entirely talk about financial security. And liquidity and buffers and all of these things, which are obviously incredibly important. But rarely do you hear like the word wealth used, when describing low to moderate income households, even though obviously the objective that everyone has is not just to attain financial security, but to build on top of that financial security with wealth and asset ownership. So I am really, that's one of the things about you guys that stands out is bringing that side of the conversation to low to moderate income households.

The other thing obviously that stood out when you guys reached out originally about this was the data. You guys do some really great research, and in particular, you have a new project that you've been working on for a while called The Investor Diaries. I'm wondering, obviously, we're going to get into a lot of the detail of it, but just at a high level, what is it and why did you choose to do it?