Carrie Schwab-Pomerantz is a philanthropist and the daughter of Charles Schwab, whose trailblazing brokerage of the same name helped introduce stock buying to millions with its low-cost trading model. As president and chair of the Charles Schwab Foundation, Schwab-Pomerantz has made it her mission to improve financial literacy.
She says a lack of knowledge about financial basics is a widespread problem that affects millions of Americans, regardless of age, gender, or socioeconomic status. In an interview with Ukraine-based Fortune contributor Anna Tutova, she discussed her passion for addressing this problem and working for Charles Schwab when the firm was just a startup. Schwab-Pomerantz also offered her views on crypto investing and artificial intelligenceand supporting Ukraine in a time of war.
(This interview has been edited for length and clarity.)
You are very active in charity and philanthropy.
Yes, I hope I inspire all women to take control of their finances, and be involved and learn the basics of personal finance. In the United States, a lot of women abdicate to their partners or their fathers. Its changing a little bit, but we need to change even more and get more confident with our finances.
Can you tell us about your childhood, your upbringing? What did your father teach you? You mentioned a very interesting fact when you wanted to start investing and ask your father for advice.
My father is very well known for starting an investment firm that wanted to democratize and make investing more accessible, so you can say that that is very much a part of who I am. I started working for the company really when it was a startup. I was only 16 years old, and worked myself up. I started as a file clerk and then learned about investing as well. And I found myself very passionate about taking my fathers vision, and I wanted to help even more Americanslike women or communities with under-resourced populations.
So when I started working for the Charles Schwab Foundation, which is the companys philanthropic arm, I restructured it so we did focus on financial literacy for all Americans.
So why do you see these problems of financial literacy in the U.S., which is one of the most developed countries?
You would think that we all would know personal financeyou know, basic investing and budgeting and how to use credit cards. Unfortunately, Ive learned from my many years in business and in philanthropy that a lack of financial education cuts across Americans from all walks of life. Its blind to socioeconomic status. Its blind to gender. Its blind to age. A lot of it has to do with the fact that theres been really no formal way for us to learn as a society, and very few schools teach personal finance, though thats starting to change state by state. Theyre starting to require it as a high school requirement to graduate. But its a very slow process.
In my mind, a financial education is one of the great equalizers in our society, and the lack of financial literacy contributes to so many social issues in our country, and people dont even really think about it. It contributes to wealth or gender inequality. It contributes to the lack of job readiness. You have to have a basic personal finance knowledge to be a good worker, and it also affects people going to college.
Cryptocurrency is quite popular now. So what is your relation to crypto?
I dont have much of a relationship with crypto, and in fact Charles Schwab doesnt offer it because its not regulatedits not approved by the Securities and Exchange Commissionand until it is, only then we will offer it to our investors or our clients. But right now its seen as very risky, and a lot of young people, including my own boys, all want to invest in itand they do. But theyve learned from me over the years that thats not really investing. That is gambling, and its fine, as long as you know that you could lose your money.
Bitcoin and Ethereum should be safe to invest in, especially when big institutions are getting into it. Do you have any plans in the future for Charles Schwab to explore digital assets?
The company will definitely create access to crypto when it becomes approved by the government. Because theres just no sort of insurance behind itnot that anythings insured, but until the government really figures out that this is a legitimate investment. Now cryptocurrency is typically like money, right? Its cash, but theres also more than just cryptocurrencytheres the blockchain technology, thats a little different, and you can invest in that like a mutual fund that focuses on that. But, again, once its been approved by the SEC and its on the exchanges, what we say is we will offer it in the Schwab way. And the Schwab way is usually inexpensive, very accessible, and its something that you can feel good about investing in. And itll be better than Goldman Sachs or BlackRock or any of those, and youll be sure of that.
How do you see the macroeconomic situation right now? Are we in a bear market? What do you expect to happen next?
So nobody knows really exactly whats going to happen. Weve been talking about a recession for a long time, right? Are we going to have one, or are we not going to have one? Are we in one, or are we not? And so, to be honest with you, we dont necessarily predict what the macroeconomics is going to look like. Were really a big believer in investing in a diversified portfoliohaving mutual funds, ETFs in U.S. stocks, in international stocks, having some cash, having some bondsand then you can ride out the market over the long term. Equities are socially engineered to grow, but theyre very volatile in the short termas were seeing right nowbut over the long term they go up.
I mean, there are equities that have outperformed all other investments over the long term. But again, you should never invest in anything when you need the money in less than five to seven years. You want to invest for the long term, and over that time, hopefully youll get a nice return.
A.I. became quite popular with the launch of ChatGPT. Can you say how it can help financial literacy education?
As I mentioned, technology is definitely helping, and technology is helping with education in general, where theyre making it easier for teachers or educators to teach whatever they mayit could be math or reading, but the same with financial literacy. Its also a great way for young people to get more active in it. Theres calculators and spreadsheets and all sorts of things that get them to actually participate and really get involved with personal finance, and make it sort of fun.
You mentioned that youre joining Charles Schwab Corp. as a board member. What do you plan to focus on?
Well, its hard to say. I have, as I mentioned, been working for Charles Schwab since I was 16. I have never not worked. I think I started working when I was 11 years old, or maybe 13. I had a paper route. Going on the corporate board is one of my biggest honors in my life, but theres a lot of new things I need to learnregulations, a lot of financial aspects of keeping banks and financial institutions afloat, theres a lot of risk, cybersecurity, all sorts of interesting things that Im really digging into. So thats going be fun. But in my heart and soul, Im always about helping people gain some financial security in their lives, and that will definitely not go away. Im going to be figuring out how I can do that at a different level.
How did you teach financial basics to your own kids?
At a young age, we started giving my children a small allowance of moneyonce a week, a couple of dollarsso that they could purchase things they want and make choices, and learn the value of money. We always talked about saving. And now they automatically do it. Theyre all good savers, all good investors. We ingrained that in them. And then, when they were about 12 years old and they had some money, I took them to the Charles Schwab office. I made them open up the account, fill out the paperwork, meet the financial consultant, learn about mutual funds and so forth. They really experienced it themselves, and now theyre comfortable with investing. Its really about exposing young peopleespecially daughters.
You have expressed support of Ukrainethank you for that. You mentioned that some friends of your family are in the military. Can you comment on what you think Ukraine needs to win the war?
You have so much support from all of us in the United States, and it just breaks our heart to see what youre going through. I know some of your fellow citizens have come to the United States. I personally send money to different organizations for humanitarian help, including CARE, a big international relief agency. And my husband sent money over to the family [in Ukraine] to help them when they had to flee the country, when the mom with her two kids had to find some safe place. We help them with their finances a little bit.
