Real Talk with Fox Business Anchor Liz Claman: How Women Impact the Economy

Over the years, Emmy Award-winning journalist and Fox Business anchor Liz Claman has held the coveted position of interviewing the CEO of Berkshire Hathaway, Warren Buffett. We had the rare opportunity to get an insider’s view on the legendary investor and his investment philosophy, especially as it pertains to women and investing.

Every year Warren Buffett is an honorary guest at Fortune’s “Most Powerful Women Summit.” In a 2012 BBC interview with Melinda Gates, he even said that women will save the US economy. In what ways do you think female investors positively impact the economy?

Women are a huge part of the workforce. More women get college degrees than men so you’re looking at a rather motivated and educated part of the workforce. Women tend to be a bit more cautious when it comes to making certain decisions which, while sometimes can work against them, more often makes them the member of the team that weighs risk a bit more carefully. A recent study shows hedge funds run by women outperformed those run by men. There’s your classic example of how this can positively impact a company, a fund, and the economy.

As school tuition continues to rise, more students are graduating with student loan debt. If you are buried under student loans or crippled by credit card debt, how would you recommend building an emergency fund?

Student loan debt has reached crisis proportions. The first thing someone should do when crushed by debt is get help. There are many accredited organizations that will help you consolidate your loans or, in some cases, negotiate a lower interest rate. Once you get that in order, start auto-debiting a small amount from your paycheck every month. Put it in a safe account with your bank. The interest rate probably won’t be high right now but the money won’t be in a risky fund where you might lose it all. This way it’s accessible when you need it. It’s almost like dollar-cost averaging into a savings account. Before you know it, you’ll have a little nest egg or rainy day fund.

There are numerous retirement investment options, each with its restrictions and certain desirable features. For young adults in their 20s, what factors should they consider when choosing a retirement vehicle?

The very best thing to do if you’re only in your 20s is to immediately sign up for your company’s 401K if that’s offered. Most companies will match up to a certain percent of what you put in. Try to max out, meaning, put in the most they’ll allow you to contribute, up to or beyond what the company matches. The contribution match is like free money. You’d be dumb not to do it! You can open an IRA account, depending on how much you make, but above all, if possible, start funneling money into that 401k. THEN, try to funnel a little bit more into an index fund that buys the entire S&P 500. It’ll give you a little exposure to the stock market that’s not too risky.

What would be your financial action checklist for those considering a career change, especially for women balancing work, family and relationships?

First thing is to make sure that rainy day fund has a minimum of three months of salary in it. That way, if your leap off the edge into the unknown doesn’t work out right away, you’ve got some padding. I wholeheartedly encourage a change in careers if you’re not happy with your current situation. Life is short and there’s no dress-rehearsal. This is it, so do what you dream of doing and remember, it’s not easy to make a career change. You’ll have more lows than highs at the beginning. That’s okay. I’m pretty sure no one’s seen a rainbow without having seen a little rain first. Embrace that concept and you’ll be ready.

What is the best advice you received from Warren Buffett?

Pursue your passion and the money will come. And remember, happiness with what you choose to do is worth a lot of currency.