HIBT Lab! The Financial Diet: Chelsea Fagan

Chelsea Fagan got her first credit card when she was a senior in high school. She quickly maxed it out, racking up debt that would burden her through her early twenties. Then, in 2014, Chelsea started a blog as a way to keep track of her spending habits and get her financial life back on track. She called it “The Financial Diet.” This week on How I Built This Lab, Guy talks with Chelsea about how she turned that blog into the multimedia personal finance business it is today. Plus, Chelsea shares why she prioritizes employee satisfaction over growth and explains her judicious approach to brand partnerships. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

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• 5:07Guy Raz?

  Visit mobili fuels.com for details. Hello and welcome to How I Built This Lab. I'm Guy Raz. The Financial Diet is a media company that offers up personal finance advice. It started out as a blog back in 2014 when Chelsea Fagan was trying to get her own financial life back on track after racking up credit card debt and developing bad spending habits in her late teens and early 20s. Eventually, her blog turned into a video blog, a newsletter, a podcast and live events. And today, The Financial Diet, or TFD for short, is a multimedia business with more than 10 employees and multiple revenue streams.

• 5:50Guy Raz?

  But unlike many of her competitors in the space, Chelsea Fagan has some pretty firm rules. She doesn't promote crypto and she's not obsessed with growing the company or even growing her audience. Her goal: to build a sustainable and manageable business. Chelsea Fagan, welcome to the show.

• 6:10Speaker 01

  Thank you for having me.

• 6:12Guy Raz?

  All right. So basically, you've written that you, quote, "destroyed your financial life between the ages of 18 and 22." What happened to you during that time? What was going on?

• 6:24Speaker 01

  Yeah. So just for a little background, so I lived until the age of about 11 in Charlotte, North Carolina. My family was definitely low income at that time. We lived in a pretty low income community. And I've often sort of made the observation, looking back, that being low income in a low income community, you actually, in many ways, don't really feel your Kind of socioeconomic status very much, but we moved around that age to Annapolis, Maryland, which is an extremely affluent community. And I went to school and socialized with a lot of people who were very, very wealthy. You know, it was very common for

• 7:07Speaker 01

  kids at my high school to get new BMWs for their 16th birthday, or, you know, take lavish trips to Europe in the summer and all that kind of stuff. And we were more at middle income by that time. Definitely still not wealthy by any means, but we were definitely in a better financial situation by my high school years than we were when I was a kid. But because I was comparing myself and surrounded by such high levels of wealth, I mean, I also, I worked at a yacht club, you know, often serving in very expensive restaurants. Like, because I was in that kind of context of wealth, I actually felt much poorer than

• 7:44Speaker 01

  when I actually was much poorer. But I had a huge amount of kind of insecurity and shame around money. And typically, people who grow up with those kind of money issues, it usually goes one of two ways. They either become big spenders and are very compulsive with money, which was my case, or you become kind of a hoarder with money and very obsessive and often overly frugal.

• 8:11Guy Raz?

  Yeah.

• 8:12Speaker 01

  But I was a very compulsive spender, especially on things that felt like they conferred status, you know, clothing, restaurants, travel, image kind of based things.

• 8:25Guy Raz?

  Stuff, basically.

• 8:26Speaker 01

  Stuff, yeah. And stuff that felt very specifically tied to that ideal of what a wealthy person was.

• 8:33Guy Raz?

  By the way, not unusual for a 18 to 22 year old. It's not an unusual thing to do.

• 8:42Speaker 01

  No, it's not. I think, but unfortunately, my senior year of high school was still pre-crash of 2008. So they had like Bank of America and other, you know, banks had like booths set up in our high school to get you a credit card.

• 8:57Guy Raz?

  Zero percent financing, like, right? All kinds of stuff like that.

• 9:00Speaker 01

  Exactly. And so I got a Hello Kitty branded Visa credit card.

• 9:05Guy Raz?

  Nice.

• 9:05Speaker 01

  Maxed it out basically immediately and then threw it in the garbage and never opened my mail.

• 9:10Guy Raz?

  You were like, that's it. I don't have to pay. I maxed it out and that's it.

• 9:15Speaker 01

  Exactly. You know, obviously decimated my credit score, went to collections. I was constantly overdrafted, having to use check cashing services because I owed so much money to my bank, constantly, constantly sort of running from my own financial mess, for sure.

• 9:33Guy Raz?

  And you were working at the time?

• 9:35Speaker 01

  Oh, yeah. I was always working full-time, often more than one job.

• 9:41Guy Raz?

  All right. So you had all this debt and I think even like unpaid traffic tickets and...

• 9:47Speaker 01

  Oh, yeah. Got my driver's license suspended.

• 9:50Guy Raz?

  And it's important to say this because there's a lot of shame around it, right? When we're, especially when we're young, we hide these things because it feels like it's embarrassing, but I think it's extremely common, especially for young people, to experience this because we don't learn financial habits when we're kids. And so oftentimes, many of us find ourselves in that position.

• 10:13Speaker 01

  Absolutely. Yeah. I mean, you mentioned the tickets. I mean, I got arrested because of, you know, my financial problems because it led to me driving on a suspended license and all of that stuff. And for a long time, I didn't talk about any of these things, even after I had sort of cleaned up my situation because of that, you know, embarrassment that you're talking about. But I think, you know, especially as it pertains to money, so many people are raised in such an extreme level of taboo with regards to money.

• 10:41Guy Raz?

  Yeah.

• 10:41Speaker 01

  Whether they have it or they don't, you know, a lot of people are raised not to talk about it. And for people for whom it was a source of stress, all the more so. But I think, for me, anyway, it's almost sort of felt like a superpower to be so candid about money. Because you really feel like when you're able to own that stuff and to sort of be unashamed, nothing scares you, kind of.

• 11:10Guy Raz?

  Yeah. All right. So you find yourself with this debt, but also you're working and you start to do some writing around this time when you're in your, I think, early twenties. What were you writing about initially?

• 11:27Speaker 01

  Any and everything, you know. It was also the era of the internet where people were heavily encouraged to write about their personal lives. So, you know, I wrote listicles. I wrote essays about life. I wrote some rather embarrassing things. Honestly, I wrote a book at that time that was, you know, kind of similarly positioned. But yeah, I certainly wasn't writing about money.

• 11:47Guy Raz?

  At the time, you were doing a lot of writing for Thought Catalog, which is an online publication geared towards millennials. And it sounds like it was a pretty good opportunity to just kind of get your feet wet, even if, as you say, it was stuff you're not super proud of. I mean, you were writing, right?

• 12:06Speaker 01

  Yes, writing for sure. And I think, once I was able to write things that I felt more strongly about, what it definitely gave me was, I mean, I easily write 5,000 words a day because I'm just like so used to cranking out

• 12:21Guy Raz?

  Yeah.

• 12:22Speaker 01

  content. And it definitely, I mean, I started out as a writer there and by the end I was the creative director for all of the branded content. So I was in charge of like all of the content that we were doing in partnership with brands to kind of pay the bills. So it did give me a really, really clear view into how to make money on media, which obviously proved useful later.

• 12:43Guy Raz?

  Yeah. I mean, I think it's instructive because a lot of, especially young people who are starting out, they don't know how to break into journalism or media or content creation. And there are outlets. But how did you even get in? Was it relatively easy to start writing?

• 13:02Speaker 01

  Easy? I don't know. I think, I mean, I just cold pitched an article and it got picked up right away. And the first article I wrote went viral and I had several.

• 13:09Guy Raz?

  But what was the article? What was the first article called? Do you remember?

• 13:12Speaker 01

  Now, Accepting Boyfriend Applications. And it was a list of criteria. It was very snarky, I would say, almost kind of mean. And I still, to this day, get some disgruntled men writing to me about it. And I actually met my now husband. Our first date was the day it was published. So talk about kismet, but

• 13:32Guy Raz?

  Wow.

• 13:33Speaker 01

  Accepted that application. But, uh, so, yeah, that went viral. And I mean, I wouldn't say it was Difficult, but I will say, I mean, I'm pretty candid about the fact I was writing for some pretty established outlets in the first year of writing and it, for a long time, I wasn't paid for anything. I wrote for free for quite some time, many, many, many articles. So in that sense, it was just, you know, a bit of a slog because, you know, I was going to school at the time in France and I had a full-time job. So that was hard.

• 14:05Guy Raz?

  So, all right. So you eventually become, as you say, the head of a brand of content at Thought Catalog. And I should mention while you're there, you put out a couple of books. And I guess at a certain point, you start a Tumblr blog and you really start to kind of think and write more about personal finance. How did you start to kind of write about it and think about it? What was the impetus? Was it your own experience?

• 14:31Speaker 01

  Yeah. So when I sold my first book, I got an advance of $22,000, which at the time was lottery amounts of money.

• 14:38Guy Raz?

  Yeah, that's great.

• 14:39Speaker 01

  It was life-changing for me at that time. And it was the first time, not only that I had that kind of money, but all at once. And so the first thing I wanted to do was pay off my debts because I basically couldn't use my phone anymore because of all the collection calls I was getting. And so I paid it all off. And by the time I was 25, I was living in New York and I, you know, I had a little in savings. I was making a very low salary at that time, but I was still, combined with my now husband's income, you know, I was able to pay my bills. And I felt like I had the ingredients to be an adult financially, but I was only just sort of like making the bare minimum. So I started a Tumblr at the time, a personal blog, to hold myself accountable to kind of improving

• 15:24Speaker 01

  my relationship with money. And that's how I started doing it.

• 15:29Guy Raz?

  And when you say, hold yourself accountable, it was, you essentially were putting all of your sort of spending habits out in public in order to make sure that you didn't do something irresponsible?

• 15:41Speaker 01

  Yeah. And also to kind of create a support system around it and talk to other people about it and feel less, you know, anxious.

• 15:51Guy Raz?

  This was a Tumblr blog that was called The Financial Diet. How did, over time, that blog become a blog about personal finance that anybody could relate to?

• 16:02Speaker 01

  So on like the third day of operating TFD as just, you know, a personal project, my co-founder Lauren, uh, who was working at an ad agency as a designer at the time, emailed me and said, hey, I love your work. I really love this blog idea. I'd love to redesign it as kind of material for my portfolio. I'm trying to branch out. You know, she wasn't in love with her job either. And so she redesigned the whole thing for free as kind of a project. And then a few months later, John and Hank Green, who are authors, YouTubers, they have a very, very large YouTube video production company, um, mostly in the educational space. They reached out to us because they have a kind of like, it's like a foundation essentially

• 16:47Speaker 01

  that gives grants out to things on the internet that they like and want to see more of. So they sent us $5,000, which again, at the time was like, oh my gosh. And also, I mean, you know, it wasn't just the money. It was they shared us and they were kind of institutionally supporting us, um, in that way. Uh, so we kind of took that as, okay, like, let's give this a try full time. We used that money to kind of set up the company legally and structurally. And we were both still like, I was freelancing quite a bit through that first year and she was also freelancing and doing some, you know, kind of catering jobs and whatnot to just kind of make the bills. But it was a pretty quick and precipitous transition. I mean, looking

• 17:31Speaker 01

  back, I don't know what I was thinking. I was like on my work computer in the office, like spending all day working on my personal blog. And I was like, okay, clearly this is what you want to be doing.

• 17:40Guy Raz?

  We're gonna take a quick break, but when we come back, how Chelsea Fagan turned a blog into a business. You're listening to How I Built This Lab.

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• 20:32Guy Raz?

  Hey, welcome back to How I Built This Lab. I'm Guy Raz and my guest is Chelsea Fagan, founder and CEO of The Financial Diet. So you, at this point, with this grant from John Hank Green, it's clear The Financial Diet will no longer just be a written blog, but it's going to be a video blog as well. Is that right?

• 20:53Speaker 01

  So that was about a year later. We kept in touch with Hank. I met up with him in New York for dinner. You know, he basically was like, have you ever thought about turning this into videos? And I was not really even a watcher of YouTube at the time. I didn't know anything about it. And I was like, um, maybe, why not? And he goes, well, you know, we have this production company. If you come on, we'll give you the resources, teach you how to make videos, teach you, you know, the backend of YouTube, all of that. Send someone out to New York to film you guys, this, that and the other. And, you know, we did a rev share. So for the first two years of having a YouTube channel, we

• 21:35Speaker 01

  were a co-production with Complexly, which is their YouTube production company. And then a few years into it, we went totally independent and took it all back in-house. And to their credit, I mean, Hank is just, very few people on the internet are as decent a human being as he is, but they were very generous about making sure that we got all the IP and all of our rights and all, you know, keep 100% of our money and all of that. So it was, we couldn't have landed on better people in that regard.

• 22:08Guy Raz?

  So as you kind of pivot towards video and obviously continuing to write, did you and Lauren start to map out what you wanted or what you imagined The Financial Diet could be?

• 22:23Speaker 01

  Not really. I think so. I worked at Thought Catalog with our third partner. We have a third partner and she worked in the branded content department. So she was very responsible for getting clients and building out ad campaigns, which is how we make the majority of our money. And so she had left and was working at a nonprofit and I had reached out to her. This is maybe a year into our existence, maybe a little less. And I said, you know, we're really looking to kind of build this out into a proper business. Do you want to join in, help us out? So she started for that first year or so, nights and weekends. She got like a monthly stipend plus commission on everything she brought in. And of course, some ownership in the company.

• 23:08Speaker 01

  But she really was the one who came on and sort of mapped out the business end of it.

• 23:15Guy Raz?

  And so you've got this essentially a personal finance media company that you're kind of building, but it sounds like you're not quite thinking of it as a media company, at least initially.

• 23:26Speaker 01

  No, I don't think I was, but I also, like I said, I mean, I had enough experience in the monetization aspect of it that from day one, I had a pretty keen understanding of how to turn content into money. I think really the infrastructure of a business is what came later.

• 23:52Guy Raz?

  So let's kind of break some of that down. First of all, in terms of your audience, right? Who was coming to the site? Do you have a sense of who your audience is?

• 24:04Speaker 01

  We're a very demographically narrow company, very niche. Well, I mean, listen, it is only in the world of personal finance are women considered a niche. I mean, we are the majority of the population, but. We are, our audience is almost exclusively women, um, which especially when we started was very unusual in the personal finance space.

• 24:25Guy Raz?

  Eighteen to forty?

• 24:27Speaker 01

  Yes, but with the largest section of that by far being like twenty-five to thirty-four in that sort of like, you know, young adults really getting your ass together kind of phase of life. They're also generally professional, uh, in some capacity, generally have at least a bachelor's, huge amount of them have postgraduate degrees, um, tend to be clustered in urban markets. But, you know, it's a very specific type of woman. And I mean, it, you know, it's important to state that even a woman who is educated, has money, works full-time, et cetera, on average, women are still not the financial decision makers. They make day-to-day decisions in the household generally, but they're not the long-term

• 25:11Speaker 01

  financial planners of heterosexual couplings. So the type of woman who is really interested in like building out her own investment portfolio or managing her own retirement or buying a house, uh, and kind of leading that process, even amongst women who demographically fit the bill, it's a pretty self-selecting group.

• 25:33Guy Raz?

  You know, I, I'm curious how you educated yourself around personal finance. You know, I was a, a foreign correspondent early in my career. I covered conflicts and wars. I, I had no background in finance or entrepreneurship. It was only in the last ten years that I started to learn about it and then start a show. And now, you know, thousands of interviews later, I have a pretty good, you know, grasp and understanding of how it works, but it took time for me to understand it. How did you teach yourself about personal finance?

• 26:05Speaker 01

  Kind of by osmosis. I do take pains to say that I'm not a financial expert. I don't have certifications. I don't have my Series Seven, I'm not a CFP, none of that. So we, we contract out to a lot of them and we have great relationships with a lot of actual subject matter experts that we work with quite frequently.

• 26:24Speaker 01

  But I mean, I look at the model that John and Hank have with a lot of their content, where they're really, they're communicators, they're educators, their

• 26:32Guy Raz?

  Yeah.

• 26:32Speaker 01

  Their job is to translate these ideas, not to be themselves scientists or what have you. And so I really sort of look at myself the same way in my relationship to personal finance. And so I think in some ways, that relieves me of the responsibility of like, I'm not out here giving people individual advice, you know, and especially when it gets to the more esoteric stuff, we pass that off to real experts. And I think what I want to stress to our audience more than anything is that this isn't hard, this isn't difficult to learn, it's not complicated. Anyone who's trying to make finance, personal finance, sound complicated, or like there's a lot of math in it, or things like that, they're

• 27:16Speaker 01

  probably just trying to get money out of you. Because there's really not that much to know, honestly. Spend less than you make. I mean, there's really not, you know, there's only so many ways you can say it.

• 27:27Guy Raz?

  Yeah. Spend less than you can make, the rest is commentary.

• 27:30Speaker 01

  Exactly.

• 27:31Guy Raz?

  I love that. You mentioned that you have a niche audience, and I want to, I want to sort of mine that for a moment, because the, the quote unquote niche audience that you have, women 24 to 35 is probably the most valuable audience from an advertiser's perspective on earth, right? It's the highest spending audience. Media companies want women between the ages of 24 and 35 to be listening or watching their, their programs. It's an incredibly valuable audience, but you make the point that you don't need to make a, a program with mass appeal, because you can actually have a successful business by appealing to this very specific audience.

• 28:13Speaker 01

  Exactly. And I think something that I learned early on, working in media, is that, you know, if you're dealing in scale, You're in a race to the bottom. There's no two ways about it.

• 28:26Guy Raz?

  Yes.

• 28:27Speaker 01

  Um, I mean, the era of the Facebook click content farm, that kind of stuff, most of those companies are gone. But even the ones that survive, I mean, they rely on what's called programmatic advertisements. So things like the automatic ads that play before a YouTube video or the banner ads that you see on websites, things like that.

• 28:48Guy Raz?

  Yeah.

• 28:48Speaker 01

  And what counts there is just maximizing eyeballs. And the, you know, value per eyeball is super low. So you gotta do clickbait and you gotta, you know, publish scandalous stuff or really sloppy stuff or, you know, comment on trending topics you have no business speaking on. And for us, the value of an ad that we do per person, even setting aside the demographic value, which is high, is so much higher because there is a level of quality. We're speaking about money already. So if our advertiser is in that space, you have the most direct relationship with that consumer.

• 29:32Speaker 01

  You know, we want to maximize the value of each piece of our content and each person in our community. And, you know, that's never, ever going to happen by casting as wide a net as possible. I don't want to speak to everyone.

• 29:45Guy Raz?

  One of the things that I really like about this era of content creators is that when I started out in, in media, you couldn't do that, right? You had to go through a major media company to have a platform. It was, there was no other way. And that, of course, has changed dramatically to the point where you've got, you know, people who have hugely significant quote unquote media companies through YouTube channels. And one of the things I've noticed that you've done is you kind of walk your, your viewers and your readers through how you can do that, how it's possible to do it. You actually wrote an article in 2017 called How TFD Actually Makes Money, which I thought was really interesting. I read it. It might be probably a little bit outdated today.

• 30:29Guy Raz?

  But basically you broke down how your business is sustainable. Can you kind of give us a sense of how, of what your revenue streams are?

• 30:39Speaker 01

  Yeah.

• 30:39Guy Raz?

  And how it works?

• 30:40Speaker 01

  Yeah. So. The largest segment of our business by sort of product or platform are our events. So that's classes, workshops, conferences, things like that. It used to be all in person. We did all digital for the pandemic. Now we're doing kind of a mix. And within that, there are about half that are ticketed. So we're selling direct to the consumer or the other half is in partnership with a sponsor, corporate sponsor, and usually those are free to the audience. So just in terms of scale, that's the biggest part of what we do. Second to that, pretty close second is YouTube, obviously a big, big part of what we do.

• 31:20Guy Raz?

  And that's the pre-roll ads that run before your videos?

• 31:23Speaker 01

  Well, that and almost every video we do has a sponsor brought to you by.

• 31:27Guy Raz?

  Right. It's baked in. You are or the person who's doing the video will say, thanks to our sponsor, whatever, Squarespace for whatever, whatever, whatever.

• 31:35Speaker 01

  Exactly. And we actually double dip. We have our pre-roll ads on and we have the corporate sponsor. And our audience, we have the best audience, I have to say. They're very kind about, you know, you gotta get, you gotta make your money somehow, ladies, you know?

• 31:49Guy Raz?

  Yeah.

• 31:49Speaker 01

  So they're really sweet. So that's a big part of it. Our grand partnerships are also distributed throughout our newsletter, which is where we publish articles and social media and all of that. Outside of that, we also, we do licensing, we do, we have a membership program for, you know, exclusive content and things like that. So we try to be as diversified as possible. But, you know, at the end of the day, media companies, there's only so many ways they can make money.

• 32:19Guy Raz?

  How do you, you know, when it comes to things like brand partnerships, for example, or, you know, content that is, is made on behalf of a client, how do you, how do you make decisions about where your red lines are?

• 32:35Speaker 01

  Yeah, it's tough. I mean, we have this conversation all the time.

• 32:40Speaker 01

  It's not a perfect science. Also, I mean, I hate to say it, but like in the world of Financial services companies, you're going to have a harder time finding any of them that have a perfectly unblemished past in some respect or another.

• 32:51Guy Raz?

  Yeah.

• 32:52Speaker 01

  So, you know, part of it is kind of a gut check. There are hard lines for us. We don't do weight loss stuff. We certainly don't do crypto, even though they flooded our industry over the past year with crazy ad dollars.

• 33:04Guy Raz?

  And I'm sure you gave up a lot of, a lot of potential revenue by not doing that.

• 33:07Speaker 01

  For sure. But I do think even financially, it's in our long-term best interest. I mean, the personal finance people who were hardcore shilling crypto to their audience, they saw serious blowback from their audience, especially now.

• 33:20Guy Raz?

  And, and what about, as you say, there are a lot of financial companies and, and companies that are selling financial products that really want your audience. They want

• 33:32Guy Raz?

  young people, they want young women, whether it's Fidelity or, or E-Trade or, or Robinhood or, you know, I mean, I'm just mentioning a few, but there are tons and tons of, of options out there. How do you, how do you handle that?

• 33:46Speaker 01

  Well, I mean, you just have to disclose that it's an ad, right? And I mean, we disclose for financial services companies that we actually use all the time. You know, we've worked with Intuit. I'm, I've used Mint forever. We used to use QuickBooks for years at the company. You know, we have, we've done ads for robo-advisors that our own team uses, all that kind of stuff. So there are things, in fact, the times that it becomes most blurry is when we're advertising for people that we have organically and, and unprompted endorsed in the past. But I think, you know, obviously, we're only working with companies that are above board and that we would use ourselves or do. But we're, you know, we, we're super

• 34:29Speaker 01

  careful about making sure to properly. It's a huge pet peeve of mine when digital creators and influencers don't properly disclose their ads.

• 34:39Guy Raz?

  We're going to take another quick break. I'm talking with Chelsea Fagan, the founder and CEO of The Financial Diet. Stay with us. You're listening to How I Built This Lab.

• 34:58Guy Raz?

  Welcome back to How I Built This Lab. I'm talking with Chelsea Fagan. She's the founder and CEO of The Financial Diet. So you, in 2019, you tweeted that every employee, a salary and full-time employee makes at least $60,000 a year, probably a little bit more now because that was a few years ago. Tell me about how you think about pay structure at TFD.

• 35:21Speaker 01

  Yeah, so, well, it is more than that now. But, you know, we are not a nonprofit and we're not a co-op. However, we do kind of have a bit of a hybrid model where almost everyone in the company has some kind of base plus some sort of rev share commission bonus, et cetera. There are certain employees who prefer to keep their base low and they like to get a higher variable compensation or vice versa. We also recently implemented a four-day work week without a pay cut, so that's effectively a 20% bump for everyone. We try to be very, you know, as equitable as humanly possible. The range of compensation in the company is pretty narrow. I'm smack in the middle of it, so I'm not even like paid more than everyone else, not

• 36:06Speaker 01

  by far. Because I think for us, for myself certainly, and I think we've cultivated a team where what is most important, most valuable, is work-life balance. And, you know, we all have six weeks PTO, we have a pretty aggressive maternity leave, all of that kind of stuff. And outsized compensation for executives really flies in the face of that. So by having that more co-op-like model, it really allows us to kind of have the best of both worlds and it also keeps our employee retention basically forever, like no one leaves essentially. So that, obviously, in the long term, ends up saving us a lot of money and time as well.

• 36:46Guy Raz?

  How many people work for TFD now?

• 36:50Speaker 01

  12 total, employees and partners. And then, obviously, a ton of contractors.

• 36:58Guy Raz?

  So that's, that's a really significant number of people working. And you've been very transparent about your own finances, even, you know, what you pay yourself. Can you give us a sense of what the overall revenue for TFT is per year?

• 37:13Speaker 01

  Yeah, well, we took a big old hit during COVID, but this year, we're probably going to end up somewhere between 1.5 and $2 million in revenue.

• 37:21Guy Raz?

  Wow. So you've got a really robust business that started out as a Tumblr. And, you know, give me a sense of what your sort of vision for it is. I mean, you've got the YouTube videos, you've got the newsletter, you've got the events. How do you envision growing the company even more over the next five years?

• 37:40Speaker 01

  I think the difference is that I really just don't view growth as the metric of success, really.

• 37:45Guy Raz?

  Interesting.

• 37:46Speaker 01

  You know, it's nice to grow a little bit year over year, but we've never taken on any investments, you know, outside investors, because what they want is growth. That's the most important marker of success. And I mean, that's capitalism, right? Like, the line has to go up.

• 38:01Guy Raz?

  Sure.

• 38:03Guy Raz?

  You're looking for sustainability.

• 38:04Speaker 01

  Exactly. Like, I would be very happy with like a 20% year-over-year growth rate, but like, everyone has an awesome life and everyone's paid really well. And we're making, you know, work that we really enjoy. And we get to go home at the end of the day, you know, and keep our four-day work week and all of that kind of stuff. So, you know, as far as my role within things, it's been for the past several years, the trajectory has been making myself less and less financially necessary for the company, just for sustainability purposes and also like-

• 38:35Guy Raz?

  You as the face of it, you mean?

• 38:36Speaker 01

  Correct. And because also, you know, I just don't think that's, it's not sustainable, but also, you know, demographically, we want to have people of all kinds of financial experiences talking. So, yeah, I mean, I think at the end of the day, eventually, you know, I'm going to die. So if nothing else, that'll be the end of it for me. But I genuinely don't really think in terms of a five-year plan, mostly because with COVID, with how fickle these platforms are, with how quickly these things can change. I know that any plan that I have today for what our digital strategy or our revenue strategy will be in five years is probably going to be totally obsolete.

• 39:19Guy Raz?

  It's almost like your, your strategy, or your approach, rather, it runs entirely counter to the kind of hustle culture that you see among financial bloggers and YouTubers. A lot of them are get-rich-quick schemes or- You know, meme stocks and I'm generalizing. Of course, there are some outstanding financial advisors on YouTube and making podcasts, but many of them are not. And it seems like your approach is like, we're fine with growing slowly. We're fine with having a smaller audience. We're fine with kind of being a bit under the radar.

• 39:55Speaker 01

  Oh, for sure. I mean, also, media is such a disaster zone of an industry. I mean, like, half the companies that were around when we started in our space are gone. Basically, every media company has gone through layoffs, restructurings, pivoting to video, pivoting away from video, you know? I mean, I have many, you know, friends and acquaintances in the industry and almost all of them have had an incredibly turbulent past 10 years professionally. We've never laid off a single employee and we've never had an unpaid intern. We've never had to do any of these things. Like, I, even during COVID, you know, the level of job security that we all kind of get to experience is, to me, that is way, way preferable to, you know, being big and

• 40:40Speaker 01

  splashy and growing really quickly, for sure.

• 40:44Guy Raz?

  A very different approach from another New York-based financial media company, The Morning Brew. They were on our show maybe a year and a half ago. And, I mean, it's a similar kind of model, but in the end, they took on a large investment and so are now part of Insider, whatever it is. I mean, is there a world where you would ever even entertain something like that?

• 41:08Speaker 01

  Probably not. We've gotten into pretty protracted conversations with several different potential investors who are either looking to outright buy us or to invest heavily. And, you know, we even got to well into due diligence in one instance. And I think what I learned from all of those experiences is that there's no iteration of TFD that takes on investor money that doesn't kind of nuke the editorial and labor practices to some extent.

• 41:40Guy Raz?

  It would just be such a compromise, you're saying?

• 41:42Speaker 01

  A thousand percent. I think personally, I would feel like it was a huge betrayal to my team. Like, in that instance, I feel like I would have to, like, offer everyone some money and be like, Yeah, here, here's the money. If you guys want to leave, leave because it's not going to be the same party, you know, it was before, but I just don't see a reason to do that, especially if I'm not even myself financially necessary to the company anymore. Like, you know, there's no reason, if it's not broke, don't fix it. And the kinds of pressures for not just growing quickly, but also maximizing profit, which we intentionally don't do, those would become insurmountable because if someone is investing in you, they want to see a return and they have every right to want that. But then, then we're obligated

• 42:26Speaker 01

  to put profit first. And there's no way that the way we operate today could be sustained in a growth first, profit first model.

• 42:37Guy Raz?

  Do you think that it is possible, so much competition for eyeballs, right? It's much harder today to get attention than when I started in 2011. Do you think that it is possible for somebody completely unknown, like you were, you know, 10 years ago when you started, to create a YouTube channel today and turn it into a sustainable business?

• 42:59Speaker 01

  Of course. Yeah, of course I do. In some ways, it's harder, but in some ways, social media does make it easier for people to find what they like and to form communities. You know, and I think there definitely is more competition, but even just from like an ad dollars perspective, you know, when we were starting out, even YouTube wasn't taken that seriously by advertisers. We were having to fight tooth and nail for the scraps of ad dollars that were left over. And now, digital ad spend is where people are going first.

• 43:36Guy Raz?

  Chelsea, as you know, there's been a lot more discussion over the role of capitalism and justice in our society, certainly over the last four or five years. And here you are, you're running a financial blog, a personal finance, sort of advice company, operating in a capitalistic system. But it seems to me that you have a rather more nuanced view of capitalism. Can you, can you kind of outline how you think about capitalism?

• 44:09Speaker 01

  Wow. Yeah, I mean, at the end of the day, like, I am a capitalist, quite literally, right? Like, I'm not a very good one by sort of extraction of resources metrics, but I am a business owner and I am also an investor in the market. And there are many ways in which the life I live and the things I do are definitely a product of a capitalist environment, for sure. And as someone who's sort of one at capitalism, I feel maybe not the most well positioned to criticize it. But I do think that the version of capitalism

• 44:50Speaker 01

  that we have in America is just needlessly harsh and destructive, you know, keeps people in a cycle of poverty. You know, there are a million and one problems with the version of it that we have today. But I don't, I've never lived under communism, so I can't, you know, or more literal socialism, so I can't say whether or not I would love it. But I do think that having a much more sort of regulated and infrastructure capitalism with much, much more limits on wealth accumulation, much higher taxation, much more support and resources for lower income folks, all of that, I think, is absolutely necessary. Whether

• 45:32Speaker 01

  or not that's realistic for our country, I mean, I really don't know. I do think I personally see a lot happening politically, especially at the state and local level that I that I feel heartened by, for sure.

• 45:46Guy Raz?

  Chelsea Fagan is the founder and CEO of The Financial Diet. Chelsea, thanks so much for coming on the show.

• 45:51Speaker 01

  Well, thank you so, so much for having me. It's been a huge pleasure.

• 45:57Guy Raz?

  Hey, thanks so much for listening to How I Built This Lab. Please do follow us on your podcast app so you always have the latest episode downloaded. If you want to follow us on Twitter, our account is at How I Built This, and mine is at Guy Raz. And on Instagram, I'm at Guy dot Raz. If you want to contact the team, our email address is h i b t at i d dot wondery dot com. This episode was produced by Chris Messini with editing by John Isabella. Our audio engineer was Neil Rouch. Our music was composed by Ramtin Arablouei. Our production team at How I Built This includes Alex Chung, Carla Estevez, Casey Herman, J.C. Howard, Liz Metzger, Sam Paulson, Kerry Thompson, Catherine Seifer, Josh Lash, and Elaine Coats.

• 46:42Guy Raz?

  Neva Grant is our supervising editor. Beth Donovan is our executive producer. I'm Guy Raz, and you've been listening to How I Built This.