Is pay transparency worth it?
Nothing excites millennials and surprises baby boomers quite like our penchant for sharing how much money we make with one another.
But salary transparency—one of the latest tactics for rectifying biases in hiring and compensation—is a means to an end, not the end itself.
In this week’s episode, we explore the benefits and pitfalls of openly sharing compensation information within an organization—and how we can share in a way that actually helps one another. Plus, an interview with Jason Tartick of Bachelor Nation fame, and the host of Trading Secrets, a podcast about our “taboo curiosities” around money and career.
Mentioned in the episode
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Katie: Welcome back to The Money with Katie Show, #RichGirls and Boys. I'm your host, Katie Gatti Tassin. And I've got an interesting one for you today: all things salary transparency. As both a feminist and someone who just loves when women have more money, salary transparency is something that I've more or less always been a fan of. I always assumed that if people's pay is broadcast across an organization, it'll be more likely that patterns of discrimination and wage disparity will become obvious to everyone, making it hella awkward not to address it at an aggregate level. Women and people of color are more likely to be underpaid than their white male counterparts—go figure. So I figured this could only be a good thing, right? According to the World Economic Forum, if current trends continue, it'll take another 136 years for men and women to be paid equally. We'll link the data in the show notes for you, but as I'm learning, things are rarely as simple as they seem. The downstream second and third order effects of a decision, whether personal or policy, are often not recognized until it's too late. And this subject always felt like a topic worth unpacking more deeply. Toward the end of this episode, I talk with someone who built an entire podcast around discussing how much money people make: Jason Tartick of Bachelor Nation fame, and the popular podcast Trading Secrets.
So let's start with a story, right? I once worked for an organization that had an unspoken rule against sharing your salary with your peers. And it remained unspoken until one instance in which I was discussing my pay with a peer my age. And because we were on two separate teams, we were technically in different pay bands and levels, despite having the same number of years of experience and education. And we were talking about our respective pay levels because merit increases had just been released. And so we were comparing our raises and they were the same percentage, but on different amounts of money. Apparently this person had a similar conversation with someone else at our level, and the discrepancy between our pay ranges between the three of us came up. I'm not sure how it ended up making its way back to management that we had talked about it. But before I knew it, this friend was panicking that she was in trouble with her manager for having such conversations. And immediately I became concerned, too. I was like, okay, could this affect my career? You know, the perception that other people have of me. I didn't want to be labeled a pot stirrer, which is funny, considering I now consider myself a professional pot stirrer. And this was before my awakening about cultures of silence around pay transparency. See, but this friend was reprimanded for discussing salary and she was effectively told that it was off limits in a one-on-one with her manager, obviously creating tension and fear that her transparency had led to negative consequences.
So you can imagine my surprise when I later found out, according to the National Labor Relations Act, that it's illegal in the US to prohibit or punish your employees for discussing their pay. And we will have more on that after the break, but Money with Katie listeners, you know what that sound means? It's time for The Money with Katie Quiz Show. I don't know why I'm singing. And here we go. A survey conducted by The Cashlorette reveals that what percentage of baby boomers have shared their salaries with a coworker? Is it 8%, 15%, 20%, or 33%? Stick around and find out.
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I'm just going to give it to you straight. It is a whopping 8%. My, oh my. Anyway, what were we talking about before the break? Ah, yes. The illegality of prohibiting or punishing your employees for discussing their pay in the United States. I will link a more elaborate explanation of your rights in the show notes, but still, legal protections didn't do much at the time to offset this internal pressure amongst employees to keep that shit to themselves. And in retrospect, it's obvious who that benefits. Hint: not the employees. So, case closed, right? Pay transparency must always be a good thing. Well, maybe, but maybe not. When I decided to explore this issue for an episode, I had a hunch that there would be more to the story. After all, in my own limited experience, learning that coworkers with my same job made more than I did, regardless of gender or years of experience, I couldn't help but feel resentful. I didn't want to feel resentful. In some cases I knew the coworker had more direct experience than I did, but I'm human. And when I would think about the fact that another person on my team who was doing the same thing I did all day long was making tens of thousands of dollars more than I was, it made me not want to work as hard. It also made me resentful of my income, despite the fact that before I knew the information, I was thrilled about my salary. It didn't matter that cognitively, I recognized this other employee had worked in other roles that gave her more experience or that she'd spent a little more time in the role than I did. Emotionally, I still felt like I was getting shafted. And despite knowing that our pay was fair for our respective experience, I couldn't help feeling like it wasn't.
It turns out this is not unusual, because we tend to have an inflated sense of our own value and contributions in the workplace. A study in Silicon Valley a few years ago found that 92% of employees believed they were in the top 25% of performers, which is, statistically speaking, hilarious. It's common to overestimate how much we should be paid. Sometimes this works out in our favor and we're able to negotiate our case successfully and end up overpaid. Other times, like when we can't, it makes us feel undervalued. Even if economically speaking, our contributions are being accurately valued. The problem is that “fair” may be subjective in white collar jobs. And anytime subjectivity comes into play without intentional countermeasures, so do biases. It's a bit of a conundrum in that way, because sure, pay transparency may reveal that a subjective bias has led to your being undercompensated. That is, in a backwards way, the best case scenario, because it gives you the grounds to be paid your worth. And if you don't know the information, you can't combat it effectively. You can't behave rationally in a market without complete information, right? But what happens if you learn you're being paid less than a coworker and your pay is still fair, then what? In a lot of cases, fair is subjective.
One major concern around transparency is that of comparison fatigue. If we're being realistic, we know that only 25% of the workforce can be top 25% performers. But if 92% of people subjectively believe they should be in that top 25%, or that their performance warrants pay in line with top 25% performance, we will have a lot of people who feel like they are being underpaid, because there is a misalignment of judgment around the value that they're providing. And I didn't really understand this fully until I experienced it myself. I was all for pay transparency until I found myself in a situation where my own fair pay made me feel like I was less valuable than a coworker. And therein lies the problem: Just because we're paid less than someone else does not necessarily mean that our pay is unfair.
And this is where the conversation may often fall short of achieving what it needs to. Pay transparency is a means to an end. It is not the end itself. I think this is where it's important to distinguish between the objective and the strategy. The objective is a reduction in inequality in the workplace, and pay discrimination based on things like gender or race. And the best strategy we have for meeting that objective right now is pay transparency, but pay transparency, aka merely publishing how much every person in the office earns on its own, is likely not enough to achieve the objective. Just knowing that someone else on my team makes more than I do is not likely to motivate me to work harder or enjoy my job more.
What will motivate me is a transparent blueprint for how compensation decisions are made. Back when I first started working, I was determined to get promoted within my first 24 months. I don't remember why that was my goal, but as we've all probably learned by now, most of my ambitions are arbitrary. Anyway, the organization that I worked for at the time was a little notorious for valuing time in seat. In other words, how long you are in the role. And when assessing promotions, I had a feeling I would have to really show out to get past that. Spoiler alert: I did get a raise, but it took me three and a half years and another employee leaving for me to actually get promoted in title. And it was my understanding that optics were a big part of what held me back. For context, in case you were curious, because hey, we're all about transparency today: My salary started at $52,000, and four years later when I left, it was around $70,000. So an average increase of about $4,500 per year. But anyway, during the entire quarter where performance reviews were taking place, and I was trying to secure my top spot in the line for the title bump and salary jump, I think I spent more time meticulously documenting all of my achievements and carefully politicking around to justify why I deserved it more than actually doing my job. I was so focused on building an ironclad case that I paid less attention to the work itself and more attention to managing perceptions and planting the seeds I thought would get me the increase I wanted. I don't remember it being a particularly happy time, because I put myself under a self-imposed microscope trying to guess and predict what moves or people could influence my outcome, because there was no transparency around how these decisions were made. It was such a black box that I ran myself into the ground scrounging for information and making all these Hail Mary attempts at pushing myself ahead of the rest of the pack. And okay, I know I sound manipulative as hell in this recounting, but to be honest, it didn't take me long to notice that corporate America is in many ways one big game of presenting yourself in a certain way. That both infuriated and motivated me, if I'm being honest, and over time, pushed me further and further into the world of wanting to do something on my own, where the corporate politics didn't apply.
The problem with this approach for the organization is obvious. An employee like me who's trying to decode the path to promotion and carefully position herself to receive one for three straight months is likely not spending her time effectively. Why was this the case? Well, because the process was opaque. There were no published standards. Everything was hearsay; whether or not I was even eligible to be promoted was a mystery to me. And simply knowing how much money my peers made wouldn't have helped. Knowing the pay band I was in, where my current salary was located on said pay band, and any compliance rules internally around what constitutes promotion eligibility, beyond the subjective assessment for middle management that you deserve, would have been a way more efficient way to save me the wasted energy of pleading my case to everyone who would listen. This mystery benefits nobody. But my theory is that it persists because it enables organizations to avoid putting real parameters in place. It is a veritable Schrodinger's Cat of the compensation world. Maybe the fear is if you tell people that they're not eligible for promotion, they won't work as hard, but the issue is that leaving it open-ended means they'll likely focus too much on the wrong things and waste their own time.
So those are some of the obvious potential shortcomings of just sharing salary without additional context or a transparent blueprint for promotion. It's an organizational problem that then gets shifted to the employees to deal with on the individual level. But what about the slippery nuanced pros and cons of sharing this type of information? The hard thing is that we don't have that many examples of radical transparency in organizations, because it's still relatively unusual for a company to be super open about this stuff. Culturally speaking, and as someone who has historically shared my income openly on the internet, I have learned the benefits and the downfalls firsthand, starting with the pros. When I posted around tax season last year our breakdown of how much tax we paid and how we lowered our taxable income and all my sources of income, I heard from some people that seeing a person like me, aka a young woman with a bachelor's degree from a state school in communications was earning $400,000 a year, was motivating and expanded these individuals’ concept of what was possible. And I think that's expansive and it's powerful. But on the flip side, I also heard from people who found it discouraging and demoralizing. People who were happy with their income, but then thanks to comparison felt like theirs wasn't good enough. And I don't think we should ignore the potential downfalls of sharing this type of information widely, especially in a late capitalist culture where it becomes easy to fall into the trap of feeling like your value as a human can be so closely tied to the literal value you are extracting from your work. Much like I went from thrilled to disgruntled when I learned a coworker with my same job made more than I did. I think seeing someone else earning a lot more than you do can instigate feelings of inadequacy and self-doubt. And I call this slippery because the emotional outcomes so often depends on your subjective relationship with money. If you believe money is abundant and that you are worthy of more, you may see someone who earns more than you and feel motivated, but if you're already deriving your self-worth from how much you earn or how prestigious your title is, that's likely rooted on some level in earning more and being more important than others in your organization. And seeing someone who's more important than you can then feel like a threat to that perception of your own importance. It's hard to extricate your worth as a human from what someone else deems the value of your contribution. And these are the types of outcomes that are harder to predict and prepare for, because they point to deeper underlying issues with the way we value ourselves. Now, that's not to say that the benefits of salary transparency aren't worth the potential downsides, just that the downsides can be mitigated if we are aware of them before blindly instituting widespread transparency. Tim Low, the vice president of a company called PayScale, which provides compensation data about more than 2,500 companies, says in an interview with Fast Company that salary is an emotional topic for most people, which can cause chaos if it is suddenly thrown into the light, without clear policies around it. He says that it's more important for management to be transparent about how they reach compensation decisions than the actual number itself. We have to be prepared to embrace the chaos that's going to come with radical transparency and radical change and plan for it [inaudible], because if we don't, the unintended consequences can dwarf the good intentions. And it also may be that certain jobs or structures more easily lend themselves to this type of transparency. More on that after the break.
But before we do go, listeners, it's quiz time again. A segment so nice we're doing it twice. Okay, here we go. According to a 2021 New York Times survey of more than 80,000 doctors, women in that field earn how much less than their male counterparts over a 40-year career? Is it $300,000, $800,000, $1.3 million, or $2 million? We will have that answer for you in just a minute.
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Welcome back. So according to that 2021 New York Times survey of 80,000 doctors, women make $2 million less than men over a 40-year career, which tracks with, well, the rest of this episode.
Okay. So to pick up where we left off, it might be that certain job types or structures more easily lend themselves to this type of transparency. For example, if you have a hundred sales associates starting in a company out of college, in a sales program together, salary transparency can be hugely beneficial, because you effectively have a hundred people doing the same job. In a smaller organization where there's only one of everyone, like one head of sales, one head of marketing, one head of XYZ, it becomes trickier to flatten compensation if the roles are valued differently by the company. You will lose the comparison standard that's usually necessary for determining whether someone's being paid differently because of some subjective bias, or because the head of sales is responsible for more revenue than the head of marketing, and therefore has a different comp structure, regardless of who's in the job. This can be mitigated by explaining the “why” behind the decisions. Again, the numbers themselves are not always as helpful as we might assume. That said, there are examples of it working. A 2018 study looked at Denmark-based companies that were required to report their gender wage gaps from 2006 onward, and found the pay gap reduced over time. But it's hard to say if there were other extraneous factors at play there too. Examples of pay inequity still abound in companies that have salary transparency, though it is fair to assume that those companies are closer to rectifying the differences.
One interesting example I found in my digging came from a company called Buffer. This is a quote from an article on Culture Amp. Buffer cofounder Leo Widrich told Fast Company he was relieved that salary transparency meant there were no negotiations to deal with, which could have disadvantaged more reticent employees, who are often women. Side note: I don't know that I agree with that, but anyway. In analyzing the data, however, the company found a wage gap of around $10,000 between men and women. Excluding the founders, male Buffer employees make an average of $98,705, while women make $89,205 on average. Are you ready for this? This is the important part. The experience aspect of Buffer’s salary formula is the most subjective. The possible categories include beginner, intermediate, advanced, and master, but the category is determined by the hiring manager after talking to the new hire. And Buffer admits this may be leaving some unseen bias in the process of setting salaries for new employees, and contributing to the wage gap. Looking at the team's current employees, the salary analysis found 58.3% of female team members were set at the intermediate level—so, the majority. While 61.4% of male employees were set at the advanced experience level, end quote. This is the type of data that at an aggregate can be extremely valuable. Are we to believe that the men in this company are across the board more advanced and value-producing than the women? No, I would assume not. And as we can see, even transparent pricing, so to speak, around different levels of experience lends itself to subjective biases, if across the board, men are assumed to be more experienced and advanced than women. It's patterns like these that indicate to me we still have a long way to go with our subjective bias, if women are assumed to be less experienced and advanced at that aggregate level. Unless you are intentionally hiring women at lower levels and men at higher levels, measured by years in the workforce, I don't think there's any way to explain away persistent discrepancies of that magnitude. And even that would be sexist as hell. At the individual level, patterns are harder to identify and subjective skewness can take place, but at the aggregate, if your male employees or your white employees are paid consistently more than your female employees or your employees of color, it's likely subjective bias has been baked into the process itself than the idea that your white men are just better and more valuable than everyone else.
One person in the media world who has built a podcast around pay transparency and taboo curiosities is Jason Tartick of Trading Secrets, who we welcome on the show today to discuss his experience asking these types of questions of public figures with unconventional jobs.
So Jason, welcome to The Money with Katie Show. Thank you so much for being here.
Jason Tartick: It is so good to be here. Thank you for having me, Katie.
Katie: Absolutely. So I want to start with a question that feels obvious. Why do you think we're inherently curious about how much money other people make—like even people who don't work in our field or have anything to do with us and how much we make?
Jason Tartick: I think there's so many ways you can answer this. To me, I find that just the asset of the US dollar, or money in general, is like the most powerful thing in the world that drives so many different people. Right? And so I just think it could drive happiness, independence, freedom. And so I just, one of these curiosities I particularly always had—I remember at like 12 asking my parents what they made, and they looked at me like I had eight heads. And I remember my grandfather—at 16, after me asking him like, what are you, what can you make as a doctor? How does that work? He sat me down and literally walked me through his entire portfolio. So for me, it's always been a curiosity.
And I think one of the interesting things, I kind of talk about this on the show Trading Secrets, that one of the most popular podcasts of our time is just talking about the taboo of sex, Call Her Daddy. Like the girl starts the show and talks about something that no one talks about. Now everyone's talking about sex. You got grandmas talking about sex. You got people, like, I mean, it's literally all over the place. And I think what people have realized, whether it's like sex or money or anything, the more you talk about it, more information you get, the better you can like adapt things to your happiness. And I think that's why people are curious. And I think it's putting them in better positions.
Katie: Hmm. I had never thought about the sex analogy, but I guess you're right. A lot of what I wanted to talk about today in this episode and explore around pay transparency came down to some of the unintended consequences that we likely want to mitigate. And some of the ways that there can be negative outcomes that we may not be able to foresee ahead of time. What's been the most surprising side effect or consequence that you have found of sharing this type of information more broadly?
Jason Tartick: Oh gosh, that's a lot. It's a long list. Top of mind, some of the first things are one, lost contracts. Like I've, you know, from sharing how much I might've made on a particular deal, I've had brands or partners not want to partner with me because I'm sharing that. I've had people that have…one thing we're doing now is “Trading Secrets on the Streets” where we're going out, interviewing people like just on the street, like, Hey, what do you do? What do you make? And I've had them like reach out, like adamantly, after signing that they were good to go, saying like, my company will fire me if you put this out. And I think there's a lot of these small things, but I think one of the biggest concerns becomes like the whole braggadocious thing. I think with anything, if you're not doing it in a healthy manner, it can come across as extremely arrogant. It can come across as entitling. And those are the things I think you'd at all costs need to do, because money does not define your personal value, and whether it's partnerships or friendships or family, it's not who makes the most that should have the most power. And if you're surrounded by people that correlate power and negotiating for things within friend groups or business because they make more, it's a huge red flag. And I think sometimes it could come across as that. But the idea is to, at all costs, try and avoid that.
Katie: Yeah. Try to mitigate it. Oh geez. I've never thought about blowback from sharing outcomes from deals. I'm like scanning my mental library here. I'm like, have I ever shared that? Okay.
Jason Tartick: Oh totally. Another one too, is the peer group, right? So I just think like the people listening to Trading Secrets or the people that are just like fans of the show, I sometimes forget that people that do like the exact same thing or very similar things or from the Bachelor franchise, I'm like, well, where'd you get that deal? How did you get that much? Who did you negotiate with? So now I'm like throwing agents under the table and it's like, it could be, it could get ugly quick, but I stand for it and I deal with the consequences associated with it.
Katie: Oh, good for you. That is amazing. Yeah. So on the flip side, why did you want to create a podcast around this concept? Like what do you think we have to gain from knowing how much society values one another and one another's work?
Jason Tartick: Yeah. So I started a consulting company called Restart, and it was about the same time, just a little bit after I started the podcast. And one of the things, obviously we saw the whole world reset, and behavior started to change, and the way that we worked and pursued happiness changed. And so what I had found in this time period, anytime I put more information out about my natural curiosities of what people make and how they spend their money and how they financially manage things, I was getting such engagement with it. So the interest that I naturally have was the interest that so many people had, because I think change was happening at such a wild speed. And when you look at like 2021, you know, over 47 million humans voluntarily left their jobs, right? If you look at some more statistics down the road, it's only about like 30% of people in the US are engaged with their workplace. So people are curious, people feel stuck. And when they get more information about, maybe it's even a deal, maybe it's a side project, maybe it's a full-time industry. It's giving them an understanding of, one, what their value is versus what it is being compensated for. And two, giving them ideas to maybe re-explore, renavigate what they're doing, because they are not finding the happiness they thought they might've been finding in the path that led them in the direction they're currently at.
Katie: I really resonate with that, because I think when I went to school, there was never any open conversation, at least not until the very end, that this is like the starting salary of a public relations professional. That was what I studied. And then I'm like, wait a second, $38,000 for a year? That's a year of work that you get thirty...I was like, wait, hold on. So I think coming into a profession and really having that be taboo, even when you're in the process of like higher education and paying for higher education to specifically pursue a certain type of career, unless you go and seek that information out, it's not super readily available to you. And to your point, though, I think there are downsides, there are ramifications sometimes of being super open about it. I guess like when I say the word oversharing, what does that bring up for you?
Jason Tartick: I think intention, like you said, is such a really important piece of this puzzle. It's the intention of where these conversations are starting, and there are unintended consequences, but if that comes with the right intentions, you know, I'm willing to take those on and so are the people I think that are willing to talk about what they make, how and why. And I think when it comes to, especially, career navigation, I mean, there's so many different ways to talk about this. Like what's oversharing in a relationship, versus what's oversharing with friends, versus what's oversharing with parents, versus what's oversharing at your company. And for me, I think that every wall needs to be broken down in companies. I think you're starting to see it, right? Like why is it that we go into these workplaces with tens of thousands of people, we have no idea what one another make, like not even a damn clue, and some people's output is 10x what someone's output is like 1x, and they're making more, based on like bureaucracy and subjectivity that can just lead to a lot of bullshit. And I think we're seeing the masses want more. And I think we're seeing the masses ask for change and we're slowly seeing it, right? Like in New York City, they've just adopted the policy that every single job description will have a salary range. You're starting to see in some states, they're changing the curriculum to talk about career placement after school, the dollar amounts you can make and how to actually prepare for that, along with financial literacy, which is amazing.
So, you know, I think that's the thing, when it comes to your profession and your workplace, I think share, share, share. You get more information. Based on the information, you can understand your value better, because we don't have websites. We don't have the Googles. We don't have these formulaic areas out there to say, what is Jason Tartick’s value? If you're not defending for yourself and you're not having these conversations, I can promise you your boss isn't going to come knocking on your door and give you a 2x raise. It's not happening.
Katie: So that's the workplace thing, but you just brought up two other interesting things that I kind of want to dig a little bit deeper on, the friendships and the relationships, and sharing with your social circles. How do you approach that in your life? Like, what's your perspective on that?
Jason Tartick: To me, it's interesting because so many people have a different disposition on where they feel comfort in these conversations. Some people won't touch it with a ten-foot pole, they'll start melting, like, oh, I gotta get outta here. Right? And then you get some people who want to lean into it. I think it's almost like any area of a relationship where you're maybe having some type of dilemma, or some area that you want to explore, but you don't know how—it's just about expectation setting. So I'm not coming out gunnin’ at happy hour, “Y'all, I made $20 grand here, made $15 grand, lost $10k on that stock, man.” Like I'm setting an expectation before I enter the conversation. Hey, this is my disposition on talking about what I make. These are some of the reasons of why I want to share it. I'm gonna not only tell you the upside, I want to talk about some of the areas I really screwed up, too. Like, are you okay with entering this conversation? And if at any point you feel uncomfortable, do you feel comfortable letting me know that, so I'm not pressing an area you don't want to go to? Right? And I just think it's all about creating a foundation, but that also correlates to any type of discussion you're having with a partner, or with a friend, or with a parent or guide.
Katie: Wow. I like that. I like going into it kind of coming out saying, this is how I feel about this. and this is why I share. How do you feel? Are you comfortable with that? Before just kind of like volunteering the information and assuming that that person wants to know or is going to want to share back with you. It surprises me, honestly, how many people I'll talk to who have no idea the type of financial situation that their partner is in, until they're like about to walk down the aisle or after they're married. I'm like, what? You've never talked about your debt, or you've never talked about what you earn? Like that, it's just wild to me.
Jason Tartick: Crazy.
Katie: Jason, to wrap up, out of the 60, 70-odd episodes that you've done, I'm curious, whose story jumps out at you the most? Like what's the wildest deep dive that you've experienced so far? And what do you think people would have to learn from that?
Jason Tartick: Okay. That is a loaded question. It's like fifteen come to mind. I don't wanna pass over what you just said, though. It is so critically important to talk to your partner about their finances, their credit score, their debt position. It tells so much about who that person is, where they've been, where they'll go tomorrow, and to just understand what they want out of life. I mean, when you walk down that aisle, I am taking with this comment the religion and the emotions out of it, you are essentially signing a business partnership together, and to not have these conversations is absolutely asinine. So I just want to make sure, if you're starting to date now, if you're in the process of going to that next step, you gotta understand your person's financial position.
Jason Tartick: All right. So let's talk about some of the episodes. So you know, I'm going to hit on three and I'm gonna do it really quick. 'Cause I know it was one question, but Rob Dyrdek, my biggest takeaway from Rob Dyrdek is he's had immense financial success, crazy amounts, but one thing he's really focused in is how to drive happiness in his life. And so he's really calculated—like a consultant goes to a business to find inefficiencies in a business. He's done that with his life, and he's found things based on the information he's gathered from himself, that like when he's filming for MTV, he's disconnected with his wife, he's drinking more, his health is down, his happiness levels are down. So he's made modification in his life to not drive financial success and to make more money and be richer, but to just drive happiness. And one of the cool things I'll never forget is when he told me that he had optimized his filming so now he only films 4% of the entire year, because he, while he has to do it, while he wants to do it and enjoys doing it, it overall does not impact his life for the greater happiness. And that is what his definition of success is. That's a takeaway that was amazing. You could check that one out.
The second one was A-Rod. Pretty much what I said to A-Rod is, you're one in 8 billion. You've…pop culture, financial management, being an athlete, owning a team, being one of the best athletes of all time, all these things. How do you do it? He just attributed to the fact that he goes at such a fast speed. He makes decisions so quickly that what happens is, in his short period of time, he's lived more lifetimes than one human on average might live in 15 lifetimes, right? So he tries, he fails. He tries, he fails. He tries, he looks back at his life and he's like, wow, there are times I have been a pure embarrassment, but from those times I'm where I am today. And at 46, I've done what your average person will do and learn in 15, 20 lifetimes. So failure and information creates a more efficient you.
And the last one, the deep dive—I mean, this is the first person I thought of, without a doubt, Molly Bloom. So Molly Bloom from Molly's Game on Netflix, she was an Olympic skier. She comes from a family of ultra success individuals, high-profile doctors and business executives. And her thing is skiing, and she breaks her back. And she has no out. She becomes an assistant out in LA to a big-time business guy. And she starts running his poker games, and she ends up taking his poker games. And all of a sudden, out of nowhere, she has the highest-roller business poker games underground in the entire world. To enter her games, you have to have $250,000 in cash on the table. She has Leonardo DiCaprio, George Clooney. She has some of the biggest politicians out there, billionaires and all, sitting down and playing her game. And there's no one behind her. There isn't a mafia or anything like that, but she did get into the fact when the Russian mob put a gun down her throat and said, you're going to cut us into these games, otherwise we're going to kill you and your family. Needless to say, she's a badass. And she decided not to. She was making $5 million in cash. And one day she wakes up and she looks at her bank account, and it's at minus $9,000,999. And just a few minutes later, the FBI, 17 agents come in with semiautomatics. So the girl was a skier. And so she talked a lot about the greed aspect of money. She talked a lot about what she learned from it. She was offered the opportunity to have her debt completely erased if she ratted out a few of the politicians. She chose not to; she paid the consequences for what she did, but the root of her issue, which I think people might be able to resonate, is I asked her why keep going? At what point do you scale back? You're an admin. They got millions and millions of dollars packed away. And I think this was a lesson I'll never forget. She said that “I grew up in a family where it was ultra successful individuals. And so for me, my motivation to keep growing was to compete with them. It wasn't for anything myself. It was all ego-driven.” And her takeaway from that is like, “if you are always chasing something else to compete or benchmark with someone else, you too might find yourself in a sticky situation like mine.” And she went back to a story that she'll never forget, after it. She was at a big hedge fund’s party and the hedge fund manager—I'm pissed off because I'm not going to remember the author, but there's a famous, famous author there, I'm blanking on his name. So the hedge fund manager is a billionaire. He's hosting the party, but one of the guys there—they're going over the day; it was a huge day in the market. And one of the guys said to the author, “How do you feel about that?” And he points to the hedge fund manager that's running the party. “He made more today than you've sold in books your entire life. And you are one of the most successful authors of all time, and in 24 hours…” Right? And the guy just responds, “Yeah, but the difference between you and I is I have enough, and you never will.” And it was just like, whoa, of all the 60 interviews, that line I'll never forget. So those are three that really have resonated with me.
Katie: Oh my god. Amazing. Okay. So Rob Dyrdek, A-Rod and Molly Bloom.
Jason Tartick: Yep.
Katie: Okay. We will put those episodes in the show notes in case anyone wants to go follow up and listen to those. But I think that's a beautiful note to end on. So Jason, thank you so, so much for joining us today.
Jason Tartick: Katie, thank you so much for having me and again, congrats on your success and everything you're doing.
Katie: Thank you. Well, there you have it, Rich Girls and Boys. To me, the important aspects of transparency are twofold. We need to make sure we're transparent about the right things, so people understand how compensation decisions are made, and we can call out implicit or subjective biases where they occur. And we also probably need to collectively unpack our own relationships with our comp and our expectations.
To close this out this week, we've got another Rich Girl Roundup. As a reminder, we will take listener questions every month. I'll put out a call for questions on Instagram. So follow @MoneywithKatie on Instagram, if you're not already, shameless plug, and we'll pick one that feels interesting and widely applicable and we’ll answer it. As my standard disclaimer, I'm not a licensed financial professional. This is not financial advice. This is “What would Katie do in your situation?” This segment today is brought to you by Betterment, giving you the tools, inspiration and support you need to become a better investor. Here is this week's question, from Melissa.
Melissa: Hi, Katie. My name is Melissa Walter and I'm calling the Rich Girl and Guy Nation from Washington, DC. I currently have a high-yield savings account, but other banks have slightly higher rates. I'm wondering, is it worth opening a new account to move my savings, or is a 0.2% difference not really worth it. Thanks so much.
Katie: All right. So I actually think there's a really elegant solution to figuring out whether or not this is worth the trouble. We can calculate what the difference is. So let's assume you've got a standard-sized emergency fund that we're talking about for the sake of the example—call it $15,000. 1% interest on $15,000 is $150 per year. Assuming that you're going to get interest on your interest in year two, that means in year two, you would earn $151 and 50 cents. And because interest is taxed like ordinary income, we estimate we'd pay our marginal tax rate on the interest. So if you're in the common 24% bracket, that's $36 in taxes for a net gain of $114 per year, or, drum roll please…$9 and 50 cents per month. So hopefully this is already starting to illustrate the futility of spending too much time on this decision, but let's bring it home. So if you're debating switching between somewhere that has 1% interest and somewhere else that has 1.2% interest, the differential between your options is $30 per year. It's the difference between $150 in interest before taxes and $180 before taxes. If you consider the hassle of switching banks worth an additional $30 per year, go for it. I would probably say it's not worth it, but you can calculate the differences for yourself with the amount in your account specifically. And if you're saving for something like a down payment in 12 to 18 months, where you've got tens upon tens, if not hundreds of thousands of dollars that are just sitting in an account doing nothing, and you're really trying to optimize, you may want to consider looking to I bonds instead, that are paying 9.62% interest for the next six months that you lock in. So thank you for the question, Melissa. I hope that helped.
That is all for this week, boys and girls. I will see you next week, same time, same place on The Money with Katie Show. Our show is a production of Morning Brew and is produced by the wonderful Nick Torres and me, Katie Gatti Tassin. Sarah Singer is our VP of multimedia, and additional content editing comes from our lovely senior editor, Henah Velez. Our fabulous video producer is Christie Muldoon. And Sam Cat is, as always, our vice president of chaos, while JoJo Beans is our chief of woof, who barks every time the FedEx man comes to the door during our recording. Every time. It made me not want to work as hard…Georgia’s barking. Georgia, that's enough! Oh, it's 'cause the FedEx man is coming. Okay. Yeah. This is going to go on for like 60 more seconds.