BBSA Conference Mellody Hobson | Summary and Q&A

August 3, 2009
Stanford Graduate School of Business
YouTube video player
BBSA Conference Mellody Hobson

Install to Summarize YouTube Videos and Get Transcripts


In this video, Mellody Hobson, President of Ariel Investments, discusses the importance of financial literacy and the crisis unfolding in society due to a lack of understanding about investing. She highlights the significant lack of retirement savings in America and the disparities between African Americans and white Americans. She also talks about the role of 401(k) plans and the need for companies to actively address this issue.

Questions & Answers

Q: How did Mellody's obsession with the misconception of night school at Stanford come about?

Mellody's obsession began when her boyfriend's son-in-law mentioned night school at Stanford as an alternative to Berkeley for business school. Mellody, being aware that there is no night school at Stanford, has been in an ongoing argument for two years.

Q: Why is Mellody excited to be speaking at the event?

Mellody is excited to be speaking at the event for two reasons. First, she has a personal connection to the university as she attended Princeton and is familiar with the world-class education it offers. Second, she is passionate about the topic she will be discussing, as she believes it has broad implications for society.

Q: What is the milestone year for Ariel Investments and what changes are they making?

Ariel Investments is celebrating its 25th year in business. As part of the milestone, the company will be changing its name to Ariel Investments to reflect its vision for the next 25 years.

Q: How did Ariel Investments come into existence?

Ariel Investments was started by Mellody's business partner, John Roger, when he was 24 years old. He had been exposed to the stock market from a young age and realized the potential of long-term investing. He started the company after not being hired to work on the asset management side of another firm.

Q: What unique opportunity does Ariel Investments have?

Ariel Investments has the unique opportunity to move the needle on a crisis unfolding in society. They believe that financial literacy is lacking and that it is essential to educate individuals about investing. They see their work as having a bigger impact on society beyond just investing.

Q: How did John Roger's father instill a love for investing in him?

John Roger's father gave him stocks instead of toys for his birthdays and Christmases starting from the age of 12. Initially, John was disappointed to receive stocks instead of toys, but his father allowed him to keep the dividend checks, which made him excited about investing at a young age.

Q: What was John Roger's background and how did he come to start Ariel Investments?

John Roger came from a modest background, with his father being a Tuskegee Airmen and his mother being the first black woman to graduate from the University of Chicago Law School. He initially worked as a stockbroker but realized he had a passion for money management. After not being able to pursue this at his previous firm, he decided to start Ariel Investments.

Q: What is the Ariel Schwab black investor survey?

The Ariel Schwab black investor survey is a research initiative that focuses on understanding how black people invest compared to white people. It has been ongoing for a decade and is aimed at addressing the financial literacy crisis and disparities in investing.

Q: What is the current state of retirement savings in America?

Retirement savings in America is in a crisis state. Many companies have moved away from traditional pensions to 401(k) plans, leaving individuals responsible for their own retirement savings. However, many people are not saving enough, and the social security system is projected to go bankrupt. Additionally, 80 million working Americans have no access to any retirement plan.

Q: What are the disparities in retirement savings between African Americans and white Americans?

The disparities in retirement savings between African Americans and white Americans are significant. A decade ago, African Americans had $30,000 saved for retirement on average, while white Americans had $68,000. Last year, African Americans had $48,000, whereas white Americans had $100,000. The difference compounds over time and results in a significant gap in retirement savings.

Q: What are some challenges faced by minorities in investing?

Minorities face several challenges in investing. They have less exposure to equities and are less likely to own stocks or stock mutual funds compared to their white counterparts. This lack of exposure and understanding hinders their ability to save and grow their retirement money effectively. Additionally, minorities often lack access to proper financial education and marketing efforts targeted towards them in the financial services industry.

Share This Summary 📚

Summarize YouTube Videos and Get Video Transcripts with 1-Click

Download browser extensions on:

Explore More Summaries from Stanford Graduate School of Business 📚

Summarize YouTube Videos and Get Video Transcripts with 1-Click

Download browser extensions on: