Reimagining Wealth and Legacy with Mellody Hobson

Watch Mellody Hobson speak on wealth, legacy, and financial Independence

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Welcome to the J.P. Morgan Webcast. This is intended for informational purposes only. Opinions expressed herein are those of the speakers and may differ from those of other J.P. Morgan employees and affiliates. Historical information and outlooks are not guarantees of future results. Any views and strategies described may not be appropriate for all participants, and should not be intended as personal, investment, financial, or other advice. As a reminder, investment products are not FDIC insured. Do not have bank guarantee, and they may lose value. The webcast may now begin.

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Hello, I'm BJ Gergen, head of J.P. Morgan Private Advisory. I'm thrilled to be joined by Mellody Hobson, co-CEO and President of Ariel Investments. Mellody is a powerhouse in business and finance. She served on the board of Starbucks, DreamWorks Animation, the Estee Lauder companies, and of course, our very own J.P. J.P.Morgan Chase. But beyond her corporate roles, Mellody is a passionate advocate for financial literacy and education.

And she recently wrote a children's book called Priceless Facts About Money, which we actually featured on the J.P. Morgan next list in 2025. This is an annual program that highlights forward thinking books and experiences for our clients. And it has been our most popular title with clients around the world.

So Mellody, thanks so much for joining us today. And I had a lot of questions, but I'll start with the book. And my first question is, of all the things that you could have written about, your life experiences, all of the corporate experiences you've had. What made you choose this?

I chose to write a book for kids about money for a lot of reasons, but the most important one is in America, we don't learn about money in school. We might learn about math. We might learn about other things, but we really don't learn the real concept of money in ways that directly affect our life over the long-term.

The one thing, no matter if you live in an African village or you live in a big city like Chicago, money is a part of your life. And so not being consciously and thoughtfully taught about money in school is something that is a problem which has made our country not have the financial literacy that we should have. And that's true of the entire world. So I thought, how can I help people start with children? And I thought that I could use children as the gateway to parents, because parents would read to their children, perhaps, but also maybe take an interest in the book, and the book would speak to and teach them as well.

So let's talk about the themes in the book. So I've read it. I've sent it to all of my nieces and nephews. My kids are too young to read it, but one day. But you cover the history of money. You cover understanding basic financial concepts. You cover the importance of financial literacy at a young age. How did you come to these themes?

Well, I thought about what do people need to know. And also I wanted it to be gee whiz. So I wanted a kid to say, who knew. And I didn't wanted a parent to go to a cocktail party and dazzle their friends at the same time. And so I thought about comprehensively. I did not want it to be an encyclopedia, but I also wanted it to be a book that you could pick up and read in any section. You did not have to read it sequentially. And I wanted the facts to be really, really gee whiz.

And so it really made me think about what would I want to. What did I never. And just in researching, I learned some things too. And what would shed light on money in such a way that it would just literally hold people's attention and want them to want to learn more.

Well, what's interesting when you talk about it being for kids, but it's also for parents, you cover monetary policies the history of some of those policies. How do you envision it being a conversation starter between children and parents? What do you hope happens with it?

Well, the first thing I hope is we said, what age is this book. And I thought ideally 8 to 12 years old, although many teens, many adults have read it and say, I had no idea. I've learned so much. So my first thought was a parent is reading it, and that is how they're engaging in a conversation with their children at the youngest age. Or a young child is reading it and they're engaging with their parent. The parent might be reading it alongside of them.

And because, again, the book can be picked up any section, it has the opportunity to be, you can engage with it for a very long period of time. It's a 10,000 word children's book. So when you talk about writing a children's book, I think people think three words on a page, that's not what I did. And then have the subject matter or the topics be some of them are super funny. Some of them are, just in that category of I had no idea how this worked.

So let's talk about something funny. I learned we've all heard the phrase like, bring home the bacon, dad's bringing home the bacon, mom's bringing home the bacon. Where did that come from?

So I did a whole section on money slang or ideas like that. Where did they come from. Bring home the bacon has to do with fairs that people used to have in farming communities. And then those fairs they would have a greased pig contest. And the person who caught the greased pig would bring home the bacon.

Oh, my gosh.

Literally.

That's wild.

But I can picture it somehow in my head and look at how we use it today.

Yes. And it's one of those things of, where did that come from? Where did bull and bear come from when you think about the stock market? And that one was harder to find. There's no perfect citation that we could find where we were absolutely sure. But my theory is the one that I heard the most which is how-- it has to do with how those animals kill their prey. And that when a bear kills its prey, it goes and bears down on it. And when a bull kills its prey, it takes its horns and it pulls up on it. So upmarket, bull market, down market, bear market.

It's fundamental to everything in the way we talk about it.

But no one knew where it came from.

I love it. So one of the questions that comes up pretty often with us and our clients, especially when people have been really successful, is how do I teach my kids how to be successful with money? And it's everything from, I don't want to ruin my children too, I want them to be able to make their way in the world. And we have families where kids have either being launched into college, post-college on their own, maybe taking over a family business. What are some of the things that parents should be thinking about teaching their children?

Here's one universal truth that I have found is that parents of means and parents who are lacking in resources, do the exact same thing. Both avoid money subjects. The parents of means don't want entitled kids, and so they say, I don't want to talk about it because I don't want my kid thinking that they're going to get whatever and not work for it.

The parents who are struggling don't feel like they're going to worry their children with their money woes. And so both avoid the conversation in that situation. Both sets of children are left wanting and needing. They need the information. So the best thing you can do is have authentic conversations with your children about money.

I like the idea to keep in mind that you're teaching your children about money subconsciously, because children learn their money habits from their parents. So you know that old concept, the show and tell, that's what you're doing. You are showing them, and oftentimes parents aren't telling them. So if you're someone who lives paycheck to paycheck, who's struggling, who overspends, I assure you you're teaching your child how to do that.

If you're someone who's frugal and is miserly, which isn't necessarily a good thing either, you're teaching your kid how to be that. If you put a lot of emotion around money, you're doing the exact same thing with your child. If you can have an upfront and honest conversation about money, that's the best thing you can do. One of the ways I like to do that how is expose children to money.

And so what I did is something my mother did with me. We didn't have a lot of money. In fact, we often were in tight situations and in financial binds. But whenever we went to any kind of restaurant, McDonald's, a restaurant with a tablecloth a diner, starting when I was very tiny, my mother had me pay.

Oh, interesting.

So in the very beginning, the cheque would come and it was literally I couldn't even reach the counter at the diner to put the money on the counter. Then it changed with my math skills. I could look at the bill and count the change. I could calculate a tip. All of those things started to escalate with my age. And what it taught me was what things cost. So I do that with my daughter at restaurants. I do it, she's 12 years old at Sephora, where we spend a lot of time.

Before something goes off the shelf, it's very hard to find the price. And so I'll say, what do you think that cost? I also, when we get to the cash register, how much do you think is in the basket, let's guess? So then that makes her more, she wants to win. So it makes her more cognizant of what each thing costs when she's taking it off the shelf.

So you make it fun and just part of your everyday life and conversation.

And also just it's not emotional, it's actually just it is. As opposed to and she'll now she has a context for things. One of my favorite stories was starting when she was very, very young. I think it's very important for children not to have instant gratification around things. My daughter would come to me. She likes this video game called Toca on her iPad. And she'd say, mom, can I get a place? It's where you build buildings. How much is it? She'd say, dot 99. That was $0.99. I said, let me think about it.

I go back to her and I'd say, OK, you can get it. Next time she comes to me. She says, mom, can I get a place? How much is it? 299. I have to ask baba. Baba is dad. And so she doesn't think that she just gets everything. And she also has some context of this is money. Now, $0.99, one would not think would be let me think about it. But it's also this idea of you don't just get instant gratification and it all matters. So one day we're watching the Disney Channel and she wants to get a movie, and the movie is 15.99. And my daughter looks at me and she's like, that is so expensive.

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But you've taught her the value of a dollar.

So then I explained to her. I said, well, the movie, you're probably going to watch it multiple times. It's like a toy. So let me tell you about the value you're going to get out of the movie which is very different than the one time. You build the building. So she now has not only a sense of price, she has a sense of value.

So let's talk about values and money, because it's very clear that the themes in this book are personal to you. And you build upon your values that you were raised with your family. What are the values that you're thinking about with your daughter? And so you're trying to teach her the value of money. Are there other concepts that you're trying to teach her that are incorporated in this book?

Well, first of all, I want her to understand that she needs to be smart with money. And so that no matter what she perceives the situation to be, it's a finite resource. And so you want to make sure that she's cognizant of the fact that it's not endless, no matter who she is. Because for a kid, that's really hard to understand. We need to understand the financial concepts that we're asking children to grasp against the backdrop of the financial setting that they're in.

So I'll give you two examples I've thought a lot about this. An ATM for a child is insane to try to understand. You are going to a machine and it's spitting out money. And you don't understand what went in to getting it. And it seems like it's always there, unless you're in a situation where it's denied. The other thing is you're paying for things with a credit card. And so again, the idea of it being finite is very different than a wallet where there are no more bills in the wallet.

So you have to help a child really understand the backdrop to these conveniences that we have, that make our lives safer and better, but at the same time make it hard for a child to grasp, the resource and the fact that it doesn't-- it's not always there for you. I've had a lot of parents tell me that when they told their children they can't afford something, they'll say, put it on a credit card.

Oh, mine say that all the time. They're like, mom, do you have your credit card, we're going to the store?

Because they don't-- they literally don't think of the credit card as being money. And so again, just helping them with that, sometimes for very young children, I recommend having the child see you use cash, because for the very young child, it's just very hard to understand when you're four years old. And so that just helps give them establish what the resources and how you may not have more of it. And then it will also, then it allows you to teach them about these other things.

But I think this is very, very important. So the value of the finality of it-- the finite nature of it is something that I think is important. I also think the values around sharing, saving. These things are very, very important. I'm as worried about a child who is miserly as I am with a child who is a spendthrift. They are both emotional and they are generally stressed situations. And you don't want children growing up with that kind of emotional reaction to money. So it's like, I can't spend $1. We all those kids too.

Absolutely. So we've done a lot of research here. And we have found that either the spouses of people who are comfortable with money. So there's typically one spouse making all of the financial decisions for a family. Maybe that spouse made the money or inherited the money, doesn't necessarily pull in the other partner. Or we have adult children that have been raised in an environment where there's plenty, and they don't really understand where it came from. What are some of the tips you would have for parents or partners to encourage their spouse or their family members to learn more about financial independence and financial literacy? So not even for kids, but these same concepts for adults.

So first of all, I think families, a married couple, no matter who they are, even if they have roles and responsibilities, I think being well informed around your financial situation is important, because the last thing you want to do is try to figure this out in a terrible situation, like a death.

That's right. It's normally after the fact.

Or you have a situation where you may have a spouse where you've been married for 50 years and one has dementia, and you don't where things are. That is problematic. Or you have children who have elderly parents and they don't know. So you have to have these uncomfortable conversations at some point, because they are critical to the success of that individual and to the family, and that has to be understood. I'm also back to just being practical and showing. So I'll go to teenagers. They should see their cell phone bill. I promise you they don't really think about what it costs.

That's right.

And maybe you have a family plan and you've got five cell phones or whatever it is, but it is a really important thing to about. What are some of the basic living expenses that you have and what do they cost. Starting that with that starts a conversation I think that can be more comfortable than getting to some of these harder issues about what am I going to have one day et cetera.

It's actually what you just mentioned is just start somewhere, and start by seeing it, and then actually trying to talk about it in whatever capacity.

My daughter came to me when she was about 8 or 9 years old, and she said, where am I going to live when you're not alive?

How old was she?

Eight or nine.

Wow.

I said, you'll have a house. And she said, well, how will I pay for it? I said, you'll have a job and you'll have resources. What are resources? I explained to her the whole concept. And it was one of-- I said, it may not be a big house, it may be a small house, but you'll have a house. And just really helping her to understand these issues. But I tell her all the time, I say, Everest, we work. I say that to her all the time. I say, we work. So that she understands that no matter what the circumstances of her family is, and our circumstances, one where we have resources. But I explained to her she is expected to have a job just like she's expected to go to school. Go to college. Those are non-negotiable. She also is expected to work.

One of the things I find in our work here, because we spend a lot of time coaching families, is to set your expectations out. And most people will rise to the expectations you set for them, or that you discuss with them, but you can't leave them under the table. You have to put them on the table and talk about it.

It's so funny you say that, because one of the things I say to her all the time is I said, we don't say if you graduate from high school. It's like, I hear parents talking to children, if you graduate from college, I'm like, wow. You're making it clear that's an option. And it's not if you have a job, it's a question of what job you'll do. And it's the job is not about the money. And that we explain to her as well. We want her to pursue what has happened, what makes her happy.

She told someone very recently a shock to me that she wanted to grow up and be a CEO. So I went to my husband and I said, Everest told someone she wants to grow up and be a CEO. He looks at me and he's like, no, we don't want that for her, do we?

Where did we go wrong? But that's what she sees.

And it was so funny. I was like, no.

[LAUGHTER]

I was joking. But they're watching your life.

So let's talk about that because you wrote this book. You have an amazing background. You also have sat on so many corporate boards of some of the largest companies in the globe, many of whom are in the United States. What are your observations having been a board member? Are there traits that you see in exceptional leaders across all of these companies?

Yes, I would say the first trait that I see is they are big thinkers. These people dream impossible dreams. And they dream wide awake. They don't dream in their sleep. And so they're executing a vision that is bold always. Because the vision is so big, they are very persistent because they're going to be setbacks. And I've been in every room with setbacks. And the setback does not have to be fatal if the person stays resilient and stays focused on their goal, which would be the third thing. They're very, very focused.

So most of the great leaders, the true business icons, they stayed in one industry and did they did something extraordinarily well. Jamie Dimon with banking. Howard Schultz with a retail coffee chain. Jeffrey Katzenberg and entertainment. I can give you example after example of my direct board experience. The Lauder family with cosmetics. They went deep, not broad. And that is something that they may be really smart, but they are particularly smart on their subject matter. They are actually they're in the rarest of air of those with that experience and the intellect that is needed for that job.

And so the thinking big along with that perseverance, along with the focus that you need to get through, are the three combinations that I've seen over and over and over again. And where it all comes in different forms and fashions with these leaders, but it is consistently there, and it's something that I've tried to emulate.

Well, so let's talk about your leadership style. What would your team at Ariel say about you?

They would say, I bring heat. I bring heat. So heat does not mean hot, but heat means heat. When I enter the conversation or I'm a part of a discussion, there's a sense of urgency to it. And there's a energy that comes with me. And some people that energy is too much. But I'm very, very aware of what kind of effort and energy I bring. And I'm not a perfectionist, but I seek perfection. And so it's something that I--

You're driving.

--driving. Very much so. We did these tests about our--

We've done these too.

And I'm a captain, which is. It's obvious.

Yeah, absolutely. I also joke my Chinese animal. I'm a rooster. So I always joke I'm the only animal with a real job.

That's all.

I have to wake up the world every day.

There you go.

So all of this is very consistent.

So what advice would you have keeping in line with your corporate theme being a prominent business leader on so many fronts. What advice would you give to young people just starting out in their careers? It's a different generation than it was even when I was in school. And so what would you tell them?

I would tell them to take advantage of every opportunity. I think that sometimes I've met with young people who think they get to pick and choose what they like to do. They talk about being authentic, and they talk about loving what they do. And I am all for that. But I learned the most sometimes from hating what I was doing. And I learned the most sometimes for not doing what I loved. Now, that doesn't mean I lived in that space.

And as one of my friends has said to me many times, there's no joy in the slog. I find joy in my work every single day. But that doesn't mean that every single aspect of that work is lifts my spirit and fills me with joy. And I think sometimes we have to explain that what you have to some of the dues that you have to pay in order to get the rewards and get the opportunities that you want.

One of my mentors once told me in every job she pursued, she wanted a little bit more of what she loved and a little bit less of what she didn't. And I thought that was sort of a great vision of slowly but slowly, more and more and over time.

And mine, interestingly, was not that. Mine was more about I saw my life in decades. I wasn't a planner. Like, I'm going to have this title and this year or anything like that, but I was clear about the effort that I have to put into the work in various stages of my life. And in my 20s I was like, go for broke. I don't have any family. I have no kids. I have no spouse or anything like that. And that is where you are at the effect of everything around you. Someone else's schedule. Someone else's demands. The client needs, et cetera. And I said, if I could do that extremely well, there will be a day I could set the schedule. That was something that I aspired to do. Warren Buffett once said that the true definition of wealth is a white calendar.

Well, he had one. He still--

That doesn't mean he's not doing anything. He does what he wants to do. And I think that's when I thought about a progression. I was like, you're getting to where you get to set the agenda. You get to set the vision. You get to set the schedule. The time bends to you, not in a narcissistic way, but in a way of you just have more influence in terms of the outcomes as well as the inputs.

So what would you say to the managers of the young people coming in? So to your senior business executives at Ariel and on all of the firms that you sit on their boards, what do you encourage the senior leaders to do for this next generation, starting in their companies.

Well, the first thing I'm back to show, don't tell. You have to live the values. You have to live the work ethic. I know it when I see it. I'm telling you, I know the people you've emailed and you get the Monday at 9:40 response when you've emailed them over the weekends. And the people that they're just Johnny on the spot. But that's true of their leaders. So their leaders complaining about not getting the response that they want or the response rate. I'm not saying that people can't have a life, I'm just saying that if it's important, it gets their attention and you get the prioritization or the response that you need, you have to demonstrate that as well.

It's a great example. All right, so what is-- I only have a couple more questions for you. What's one thing you wish people would ask you that they don't?

Wish?

Yes. Are there things that either you would like people to know? If you had a soap box how would you use it? I think one, I run an investment firm every single day. I'm responsible for people's financial well-being in terms of their ability to send their kids to college, to buy a home, to start a business, to retire comfortably. And I wish more people asked me about that, which is the job we do, the results we have, how we drive outcomes for people's long-term financial success. That is something that is very important to me.

I tell people in our firm, we don't think in billions under management, we think in people. And every time they look at any dollars on a page, I want them to picture their grandparents, their parents, someone that they care about and realize that we are the difference between them having the insulin that they need, or not dividing up the medicine that they need to stretch it, or being able to live have those golden years be truly golden.

And so that is something that I love talking about. I love talking about how we think about the markets and the like. I think people tend to focus on some of the other things I do, and I just have to remind them, I run a company, that's the job every day I wrote a book out of-- that was born out of my expertise. Out of what I've done my entire career. I've had one job for 34. years.

Well, I was going to say, one thing I love about your journey is you started at Ariel and you kept going. So talk about somebody who goes deep and who knows their business. You've done other creative things in addition to it, but you've been very focused at Ariel.

It's one of the things that I most worry about in terms of younger people today. There's a lot of job hopping, and I'm not saying that in a disrespectful way. I just think that I never thought the grass was greener on the other side of the fence. And so therefore, I wasn't distracted by headhunters calling me or job offers or thinking I had to go somewhere else. I was in the position of just I have to make this work.

It felt like a marriage to me. Not a bad marriage, a great marriage. But something you stay committed to even when it's hard. It's like, how do I get through this? If you have a marriage that you really want to be successful, there are hard days, but you're not remotely thinking of not being married to the person. I think in our professional lives, at times people have those hard days. And they're like, I need another job. And because they can, they do. And sometimes that's not in their best interest.

All right, so my last question. Do you have any more books in the works?

I'm going to do another book, but I'm going to do it for teens and I'm working on it right now. So it's early days. And I have some ideas about what it's going to be. But it's not fully baked yet. And it all starts with an idea. And as you execute it refine it. But that book took four years to write, so it's going to be a minute.

OK, I love it. I can't wait to read it.

Thank you. Thank you so much for all your support.

Oh, [INAUDIBLE], it's been incredible. I knew we would cover a lot in this conversation, and I knew that we would learn from your invaluable expertise and experiences, and we have. And so thank you for putting those insights together and priceless facts about money and for talking about it with us today.

Thank you so much for having me.

Thank you for joining us. Prior to making financial or investment decisions, you should speak with a qualified professional in your J.P. Morgan team. This concludes today's webcast. You may now disconnect.

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Text: J.P. Morgan. PLEASE NOTE: This session is closed to the press. The views and strategies described herein may not be suitable for all clients and are subject to investment risks. Certain opinions, estimates, investment strategies and views expressed in this document constitute our judgment based on current market conditions and are subject to change without notice. This material should not be regarded as research or as a J.P. Morgan research report. The information contained herein should not be relied upon in isolation for the purpose of making in investment decision. More complete information is available, including product profiles, which discuss risks, benefits, liquidity and other matters of interest. For more information on any of the investment ideas and products illustrated herein, please contact your J.P. Morgan representative. Investors may get back less than they invested, and past performance is not a reliable indicator of future results. INVESTMENT AND INSURANCE PRODUCTS: NOT A DEPOSIT. NOT F.D.I.C. INSURED. NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY. NO BANK GUARANTEE. MAY LOSE VALUE.

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Welcome to the J.P. Morgan Webcast. This is intended for informational purposes only. Opinions expressed herein are those of the speakers and may differ from those of other J.P. Morgan employees and affiliates. Historical information and outlooks are not guarantees of future results. Any views and strategies described may not be appropriate for all participants, and should not be intended as personal, investment, financial, or other advice. As a reminder, investment products are not FDIC insured. Do not have bank guarantee, and they may lose value. The webcast may now begin.

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Gold text forms the logo: J.P. Morgan.

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