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Yahoo Finance Presents: Hispanic Stars - Alice Rodriguez

This series of Yahoo Finance Presents highlights Hispanic and Latinx executives and leaders in the fields of tech, science, and finance for Hispanic Heritage Month. On this episode of Hispanic Stars, Alice Rodriguez, a Managing Director at JPMorgan Chase & Co., sat down with Yahoo Finance's Ines Ferre. She discussed the effects of the coronavirus pandemic on minority owned businesses, the income inequality gap in the United States, innovation as a result of COVID-19, her story on how she became a banker and got to where she is today, and advice to those who want to follow in her footsteps.

Video Transcript

[MUSIC PLAYING]

INES FERRE: Welcome to "Yahoo Finance Presents Hispanic Stars." We're here with Alice Rodriguez, Managing Director at JPMorgan Chase. Alice, thanks so much for joining us.

ALICE RODRIGUEZ: Thank you for having me, happy to be here.

INES FERRE: So let's talk about COVID-19 and what's been happening with businesses. I know that you are chair elect of the Hispanic Chamber of Commerce. What have you been noticing with businesses, and specifically minority-owned businesses?

ALICE RODRIGUEZ: There's been a big, big challenge. Minority businesses did not get the same level of support that they perhaps thought they were going to get from a PPP perspective. And so when we have surveyed the Hispanic-owned businesses throughout the country, both those at scale, meaning over a million in sales versus the ones that are not scaled, they have very similar challenges in the sense that they don't have enough cash reserves to get past six months.

So in fact, when the Latino entrepreneurship, the Stanford Latino Entrepreneurship Initiative that we partner with surveyed Hispanic-owned businesses, 86% of them said that they were very nervous about the ability to get past the six months, just because of the real lack of reserves. So there's no question that it's impacted minority businesses. I know that on the Latino-owned businesses, what you'll see, is that we over index in sectors that have really been hit hard by the pandemic. Retail, restaurants.

Even though construction was considered essential, some challenges there. Particularly because COVID itself impacted a lot of essential workers in the Latina community. The most hard hit demographic in the country right now are Latinos. And so it's just presented a lot of different challenges that we're trying to really bucket into different areas, so that we can understand what's the best way we can support them.

INES FERRE: And Fed Chair Jerome Powell has spoken about income inequality as one of the biggest challenges that the US faces. What are your thoughts on that? How can we solve some of that?

ALICE RODRIGUEZ: Yeah, I mean, there's no question, when you look at the median net worth for a black household, for instance, it's $17,000. For a Latino household, it's 21,000. And for a white household, it's $171,000. And when you start to look at the key drivers of the why behind that, I think that's where we're going to have to really think through how to support our communities best.

So for instance, Latino households really lean on home buying or owning their home as a way to build wealth in their household. And helping them to think about more liquid savings and the ability to build that savings and build wealth. Entrepreneurship is another way that a lot of Latino households really build their wealth. So I think it's about first, supporting those key levers that they already use to build wealth. And then figuring out what are the right policies and the right, do we have the right products so that everybody can take advantage of how you build wealth over time.

INES FERRE: And it's often said that during recessions, new businesses can be built, new ideas come out of downturns. Do you feel that way? I mean, what are you seeing as far as entrepreneurship or smaller businesses during COVID-19?

ALICE RODRIGUEZ: No, I think that I absolutely believe that there's innovation. And I'll give you an example. I mean see so much out there regarding air quality and being able to have the right filters from an HVAC perspective, the right purifiers, as the science comes around on how to really prevent the spread of COVID-19.

And so I recently met this entrepreneur whose job was cleaning air ducts. And so that's what he was doing prior to COVID, but as COVID has happened, he's been able to shift more into learning more about the technology that's required to have the right HVAC filters. And I'm sorry, because I don't know the name of the filter he was telling me, but there's a lot of great information and science that supports having the right filters.

So this has allowed him, as he has pivoted a little bit more, he's still doing air ducts, he's gotten the opportunity now to do more commercial work. Whereas before, he was more focused on residential as he was helping clients keep their air ducts clean. So I just thought that was a good example. And you see that happening everywhere.

Manufacturing is another good example. We see at the chamber, the opportunity perhaps to find businesses that can go more into the manufacturing sector as we think about some of the manufacturing that perhaps could be moved back to the US. So I do think that through sometimes crisis, in this case, that see some tragedy, that you see some good output come out as a result of it.

INES FERRE: You mentioned earlier, Hispanics and building wealth. What are some other ways that Hispanics can build wealth, especially during these times?

ALICE RODRIGUEZ: I mean, it starts with savings. I mean, at the end of the day, all of the research that I've done just on financial health, says the most important predictor of good financial health is savings. And the reason we say that, is that if you have a rainy day, like anything happens, in this case, a horrific pandemic, if you do not have a rainy day fund, if you have no savings built up, you will most likely have to go to borrowing money or selling something to be able to do that.

And people get into a spiral that is very hard to get out. You tend to start paying more for credit as a result of that. And so it's just like this ripple effect that doesn't allow you to move forward. So it doesn't sound really exciting, when you tell people, you just need to save more, but it's the truth. And I always think about my own upbringing. Neither one of my parents had the opportunity to attend high school. They had at best, a middle school education. But they were good savers.

They were good savers because they had what I would categorize as, more seasonal work. And so when you do that, they were just very disciplined about knowing. Like my father was a shrimper and my mother did all sorts of jobs. She did migrant work, she sold tamales to the neighbors, she did what she had to put, they both did, to put food on the table.

But they also knew that every time they had money, they put some away. And so I feel like I saw that growing up. And as a result, that was sort of the habit that I've had, which is always like, save first, pay yourself first, and then you're able to build more resiliency to be able to do other things in the future. And so anyway, I just use that as an example, because sometimes when I even tell my own kids, who are adults now, how important savings is, they're like, mom, no, I want something more exciting like going into the market and all that. And that is important too, by the way. But you can't do that until you have the fundamentals down.

INES FERRE: And talking about your background, it's so fascinating, what inspired you to go into banking? Is that what you just said, your parents saving a lot? I mean, what were some of the inspirations that led you down the career path you went through?

ALICE RODRIGUEZ: I was the first one of my family to graduate from college, and I got a business degree. But like most students coming out of college, it's not like I had, I knew a lot about stuff, about life and stuff. And one of the reasons, it's not like I wanted to go into banking, to be honest, so that I could be a banker. I just thought that growing up, the one thing I really wanted to do, and this is not again, going to sell really exciting and sexy, but it's the truth, is as a young girl spending time in Chicago, my mother used to do some migrant work with her family in Indiana. And so she would take me and my siblings with her.

And I remember going to see this, back then it was the Sears Tower. I think it's something else now. And from a young girl from south Texas, who the tallest building in her city was three stories, literally, going to Chicago and seeing all these things, all these buildings so tall, really like was a big deal for me. But anyway, when my aunt took us to the Sears Tower, the one thing I noticed was that everybody going into that building was dresses up with a briefcase, all nice. And I had no idea what they did, but I just said, that's pretty cool.

And when I asked my aunt, how come nobody in our family works at the Sears Tower? Like everybody is like doing more manual labor type jobs, whether that's working at the meat packing plant or having to do migrant work or whatever. And I don't think I ever got an answer, and I was just a kid, so even if I got one, I don't think I would exactly remember everything.

But it just said to me, like whatever you do, like get a job and you work at a cool place like the Sears Tower. And that was my ultimate goal. But the reason I went in the bank was A, was in the mid '80s and there wasn't a whole lot of job opportunities. We were in a recession back then too, because Texas had a real estate bust and an oil bust. But I figured that it would be a good place to meet bankers, so that when I became an entrepreneur, which is still a goal of mine, believe it or not, I would know a lot of the right people to get the money that I needed to start my business.

INES FERRE: An entrepreneur in what field? Doing what exactly?

ALICE RODRIGUEZ: You know what? I really, I really don't know. I mean, the great thing about in my career, was the ability to manage business banking. And I spent some time in California after we acquired Washington Mutual. And the thing that inspired me the most there is just how innovative people are. Like they would just get an idea about like hey, we should be manufacturing this or we should be helping in this way, and they just did it. And they took all their life savings and they took a dream and they made it a reality. And that was always super inspirational to me.

I think about right now, I think about things, back to your point, about how do I help educate and raise money so that we have more people in our minority communities that would be able to fulfill their dream. And so particularly right now, where there is a real need for capital as people are trying to pick themselves back up after COVID, and is there a way, for instance, to educate our minority communities about the different sources of capital. And then have the right funds out there to be able to help them accomplish that. So not just debt, but also teach them about how important it is to have equity owners and helping them to grow and advance their businesses.

INES FERRE: And what advice would you give to Hispanics and Hispanic women who would want to reach your position?

ALICE RODRIGUEZ: I would say the very first thing is, remember that you can't do it by yourself. There's always this tendency to maybe think about like oh, I should know all the answers as I'm going forward towards this thing. And I have found that when you have like a very small center of people that are your truth tellers, it's just a good way to bounce things off.

I think the second thing is like just take the risk. Like look, we're all a little nervous or scared to try something new. And if you never even attempt it for the fear of being rejected, you're just, there's just so much learning that comes from it, I guess is what I'm trying to say. So I know in my career where I literally had people like really encouraging me and I would try something, and then when you first get that rejection, it's like really hard. But after that, it just makes it easier, and you tend to really build confidence.

And I think the third thing that I would say is, just stay consistent and persistent on those things that you really want. Because a lot of times, we talk ourselves out of it. We just start to think about like how quote, hard it's going to be. And I would just say, you get knocked down, you just get right back up and just try again.

INES FERRE: Great advice. Alex Rodriguez, thanks so much for joining us.

ALICE RODRIGUEZ: Thank you.