فصل 05

5

Money Looks Better in the Bank Than on Your Feet

There is no dignity quite so impressive, and no independence quite so important, as living within your means.

—Calvin Coolidge I never set out to be rich. I had no idea my company was worth anything until venture capitalists started knocking on my door. “Your company is worth hundreds of millions of dollars and you own this much of it, and so now you yourself are worth this much.” It was shocking how fast it all happened. Nasty Gal went from doing $150,000 a year to doing $150,000 a day, and now we do $150,000 over lunch. I think that part of the reason Nasty Gal has been so successful is because my goals were never financial ones. I believed in what I was doing, and fortunately other people believed in it as well. I cared as much about the process as I did about the results. No decision was too small. Whether it was the word choice in a product description or the expression on a model’s face, I treated everything with the utmost care. At the time this was just because, like I said before, I’m the kind of person who pays attention to something as small as a crooked shipping label. In hindsight, I see that it’s those small things that can make or break a business.

My adopted political ideals had let me approach money with an elevated level of distaste. I saw it as a materialistic pursuit for materialistic people, but what I have realized over time is that in many ways, money spells freedom. If you learn to control your finances, you won’t find yourself stuck in jobs, places, or relationships that you hate just because you can’t afford to go elsewhere. Learning how to manage your money is one of the most important things you’ll ever do. Being in a good spot financially can open up so many doors. Being in a bad spot can slam them in your face. And being broke gets old, so start making smart decisions now to avoid paying for stupid ones later.

Credit Cards Blow

I wasn’t always stealing stuff. Sometimes I went the conventional route when I wanted something; I went into a store and, you know, paid for it. And it was on one of these crazy such occasions that I managed to make a legitimate purchase and ruin my credit in one fell swoop.

I was nineteen and at the mall buying a bra at Victoria’s Secret because while it’s possible to dumpster-dive for food and trawl the Salvation Army for clothes, even a freegan knows to invest in new underwear. At the register, the salesperson asked me if I wanted to sign up for a Victoria’s Secret card and I said yes. I thought I was signing up for a rewards program, where I’d earn points toward a free bra or something. What I failed to realize at that moment was that I had unknowingly been bestowed my very first credit card. Because I moved so much, I rarely had a steady address, causing bills to miss me as I jumped from state to state. By the time my $28 lingerie charge caught up with me, my credit was wrecked, and I had learned the hard way that you can ruin your credit in one seemingly responsible afternoon, but rebuilding it takes years.

When people write about Nasty Gal, the articles almost always note how I built the company with no debt, because that’s a pretty unusual feat in the business world. And yes, once I finally got a job and started working for my money, I was extremely responsible with it. But what these stories usually leave out is that it wasn’t by choice that I built the company debt-free. It simply wasn’t an option, because no one would even give me a credit card, never mind a business loan. This was frustrating; however, it was also a blessing in disguise. As I had no financial cushion to support me while the business ramped up, I had to bust my ass and make it profitable from day one. In the end, this meant that I grew Nasty Gal to $28 million in revenue without borrowing a dime.

But I’ve also had to accept that credit is not something you can ignore. While I don’t agree that the world should reward people for spending money they don’t have, it happens to be the way things work. You can only ignore this fact for so long before it returns to bite you in the ass.

Like my A-cup bra did for me, it is the little things that can and will wreck your credit. As distasteful as it may seem when you’re busy plotting to take over the world, it’s equally important to stay on top of your bills. Parking tickets can end up costing you thousands of dollars and court dates. You could suddenly find the apartment of your dreams only to be denied because of that goddamned Target card you signed up for and forgot about while buying a mop, a sports bra, and mayonnaise. When you take care of the little things, you’ll be pleasantly surprised to find out that the big things often happen much more easily.

Shared living situations are also a blueprint for financial disaster, so try to spread the utility love among your roommates rather than volunteering to have all the bills in your name. Better yet, if you’re worried someone might not pull her weight, don’t live with that person. Living in the party house is a blast until the party’s over and you’ve got an $800 gas bill and your roommates—who are, like, your best friends and you guys are gonna know each other forever—are suddenly MIA.

Bills, sadly, are not an ignore-it-and-it-goes-away problem. If you’ve been getting an overdue notice from the cable company every two weeks for the last three months, and all of a sudden it stops coming, that does not mean that they’ve gotten over you and moved on to someone else. Big companies are like the mob—they never forget, they never give up, and they always get their money. Get them before they get you: Pay up, and pay on time.

Cash Is King

Money is a guarantee that we may have what we want in the future. Though we need nothing at the moment it insures the possibility of satisfying a new desire when it arises.

—Artistotle

When my parents pulled me out of Catholic school in fourth grade, I thought that they were doing so because they were the coolest parents in the world, rescuing me from the tortures of being misunderstood. When they filed for bankruptcy shortly thereafter, I realized the reason I wasn’t going to Catholic school anymore wasn’t because I didn’t want to go, but because my parents couldn’t afford for me to go. I vividly remember going with my mom and dad to the credit counselor’s office and watching them slice their credit cards into a jar filled to the brim with the shards of other people’s bad financial decisions.

From that point on, my dad preached a mantra of “Cash is king,” and that has always stuck with me. It’s so simple, yet so difficult for a lot of people to understand: Do not spend more money than you have. Sadly, doing just that is not only the norm for a lot of people, but also a signifier of success. Growing up in the suburbs, I saw it all the time: the flaunted backyard pool or new monster truck. These things often weren’t a sign of what these people could afford, but only of what they could borrow.

For the obvious reasons detailed in the previous chapters, my parents cut me off financially when it became apparent that school and work weren’t my top priorities. I now know that it was a tough decision for them to make—especially at a time when I wasn’t inspiring confidence in my ability to take care of myself—and it was even tougher for me to take. I had friends who were supported by their parents and I was totally envious. It seemed unfair to me that some kids were able to do whatever they wanted while I spent my afternoons at a costume shop, helping “burners” find their goggles and stupid hats for Burning Man. However, forcing me to figure out how to provide for myself was probably one of the best things my parents ever did for me.

I come from a long line of hustlers. My dad has worked in home loans for as long as I’ve been alive, my mom sold houses before becoming a writer, and they have both worked entirely on commission since before I was born. In short, how much money they brought home was a direct result of how hard and how smart they worked. Sometimes we rented single-story houses; sometimes we owned two-story houses. My dad always said, “You’re only as good as your next month,” and in Nasty Gal’s early days that was how I lived as well. No matter what, I had to get my auctions listed. Otherwise I was devoid of dinero.

When Nasty Gal first opened, I had little to no overhead aside from my sweat (daily), tears (regularly), and blood (sometimes vintage has sharp things hiding in it!). In 2010, after Nasty Gal moved off eBay and was a full-fledged business, I had almost $1 million cash in the bank. When sales spiked around the holiday season, I kept taking screenshots every time the account balance would go up, because I never knew if I’d see more money than that in one place, at one time, ever again. I wanted to remember what that many zeros looked like, forever.

Another big no-no is increasing your spending as soon as your income increases. I have always been careful to avoid this pitfall. For a long time I was so focused on growing the business that spending money on myself didn’t even cross my mind. Even if I had wanted to drop $500 on a pair of shoes, I was just too busy. #GIRLBOSS, when your time spent making money is significantly greater than your time spent spending money, you will be amazed at how much you can save without even really thinking about it.

Though today I would prefer to look back and call myself practical and resourceful, the truth is that in the early days of the business, I was a total scrooge. If we absolutely needed something, I bought it. But if it was just nice to have, I didn’t. When we finally went to IKEA and bought desks, it felt like a shopping spree to my inner anarchist (who was growing ever quieter as the years went by) who knew that we could have built desks with a free door and some milk crates from Craigslist. But as Nasty Gal hired up a storm and became a real business, we had to act like a real office.

In 2011 I took my first vacation since starting the company, and went to Hawaii by myself. It was heaven, and I extended my trip from a week to a week and a half. At the time, we were in the process of moving Nasty Gal from Emeryville to Los Angeles, and when I returned from Hawaii, in a state of semi-Nirvana after spending eleven days in paradise, I found out that someone had ordered brand-new Herman Miller Aeron chairs for the entire office. At that point, yes, IKEA desks were totally necessary. Aeron chairs, however, were not.

I happened to have a Herman Miller Aeron chair in my office. To me, it was a rite of passage. But I’d bought my chair with my money, not Nasty Gal’s, and you wanna know where I got it? You guessed it—used, on Craigslist. There was no way that I was going to have interns rolling around on these things! It sent the wrong message to the company to preach frugality while balling out on twelve grand worth of chairs. You can’t act like you’ve arrived when you’re only just receiving the invitation.

We couldn’t return the Aeron chairs, but after we were settled in our new LA offices, our poor office manager, Francis, spent six months selling them . . . on Craigslist.

In the eBay days, when vintage was selling for ten times what I paid for it, it felt like I was printing money. But instead of buying out the bar or heading to Prada, I started saving, investing every cent back into the business. As much as I liked the shoes I could afford, I liked having the money more.

Nasty Gal didn’t have a budget until 2010 because we didn’t need one. I always knew how much cash was in the bank, and designated chunks to spend on buying trips, ensuring there was always a healthy cushion for the business. As uneducated buyers, we bought much the same as anyone who had a small business would. “Okay, so we bought twelve of that dress last week and it sold out, so maybe this week, we’ll buy twenty-four?” We trusted our instincts, and stuck to the two tenets of my philosophy: Sell things for more than you pay for them, and save more than you spend. Simple, yes, but that is the philosophy that ultimately led to a really big business.

One of the best books I’ve read was George S. Clason’s The Richest Man in Babylon, which offers financial advice in a collection of parables. My ex-boyfriend read it, and it kicked him in the butt enough that he got himself out of debt and went on to save thousands of dollars. The average American only saves 6.5 percent of his or her income, which is barely keeping up with inflation. But you, dear #GIRLBOSS, should save 10 percent at the bare minimum. I know it’s a lot easier to talk about saving money than it is to actually save it. Here’s a tip: Treat your savings account like just another bill. It has to be paid every month, or there are consequences. If you have direct deposit, have a portion of your paycheck automatically diverted into a savings account. Once it’s in there, forget about it. You never saw it anyway. It’s an emergency fund only (and vacations are not emergencies).

If you’re tempted to buy something, just imagine that those new shoes were actually made out of crisp $20 bills. Do those $20 bills look good getting dirty on the sidewalk? No, they do not. That’s because money looks better in the bank than on your feet.

The Art of the Ask

To many people, talking about money is awkward. They think they have either too little or too much. As you now know, I’m pretty shameless, so from haggling the price of a sweater to negotiating with investors, talking about money doesn’t bother me. Once, when looking for an apartment, a landlord insisted on keeping my nonrefundable credit-check fee even after I’d told him not to run my credit. I had called him five minutes after submitting my application to make sure of that. So I fought. On the phone, something came over me. My voice got low and threatening and I growled, “Fifty dollars means a lot more to me than it does to you, and I have alllll the time in the world to get it back.” I meant it and he knew it, seeing that I was unemployed. And guess what? I got my money back.

A friend and I once stuck our thumbs out in a half-serious attempt to hitchhike on a Greyhound bus. Lo and behold, the bus stopped, the door opened, and we climbed on. Wet with rain, we were met with faces of equal disbelief among our fellow passengers. You don’t get what you don’t ask for.

You’re in luck, #GIRLBOSS, as this mantra applies even better to money than it does to Greyhound buses. Some people may say that I was a horrible person for haggling at a thrift store, but I was just another person trying to get by. By the end of the week, those seemingly insignificant tiny discounts had made a material difference, and I could put the money I’d saved toward something else in the business.

If you’re frustrated because you’re not getting what you want, stop for a second: Have you actually flat-out asked for it? If you haven’t, stop complaining. You can’t expect the world to read your mind. You have to put it out there, and sometimes putting it out there is as simple as just saying, “Hey, can I have that?”

That being said, if you don’t like talking about money, I get it. There are ways to make the whole thing less traumatic. The first piece of advice I can give you is to learn to separate your money from your emotions as much as you possibly can. Whether someone is asking you for money, you’re asking someone else, or you’re contemplating a significant purchase, approaching financial decisions as calmly and as rationally as possible will make everything a whole lot easier.

It also quite literally pays to be as unemotional as possible when you’re asking for a raise. First, be really honest with yourself and make sure that you deserve the raise that you’re asking for. You do not automatically deserve a raise just because you’ve been somewhere for a certain amount of time. But if you can articulate the reasons why you deserve a pay increase, then schedule time to meet with your boss and let her know in advance what you want to talk about. This can be as simple as “I’d like to schedule some time with you to talk about my salary. Is it okay if we put something on the calendar?” Talk to your boss about this in person. Hitting him up on Gchat is not appropriate. If your company does regular yearly reviews, that can also be your chance to talk about money.

When you do meet to discuss it, skip the personal sob stories. The only factor that affects your chance of getting a raise is whether or not you’ve earned it. It doesn’t matter if your car broke down or that your landlord’s raising your rent. Those facts are not your boss’s problem. All she needs to know is that you’re kicking ass, like a #GIRLBOSS should.

Put That Money to Work

While I still don’t blow my money, I am now comfortable with buying expensive stuff. It is natural, at some point, to realize that it’s worth it to spend a little extra (if you can afford it) to get something that’s just right. This is true when it comes to buying clothes and it is true when hiring employees—sometimes it pays to spend a little more than you bargained for on real quality.

Spend money because it’s an investment in your own well-being, not because you’re bored and have nothing else to do. Don’t get all Versace-Versace-Versace and buy things just because you can. Luxury can be a great experience, and the things around you should represent the life that you’ve made for yourself, as long as you are taking the time to appreciate those items. I bought silverware recently, and when I was eating my yogurt this morning, I couldn’t help but think, This spoon is serious!

Don’t live like a CEO when you’re still a sandwich artist. The first car I bought after the Volvo wasn’t a Porsche—it was a used Nissan Murano. I loved this car. I put half down (around $10,000), financed the rest with an 11 percent interest rate (my first loan!), and was so excited about the horrible deal I had just gotten that I hugged the car salesman when he handed me the keys. I paid it off in full within the next year.

Last year I decided it was time to upgrade. One great thing about Los Angeles is that you can get away with being flamboyant with little consequence. It’s a car-centric city, where driving can be rush-hour hell or a hedonistic romp. Cruising down Sunset Boulevard with the Cramps blasting and palm trees silhouetted by the neon signs of strip clubs can sometimes repair the worst of my moods. When I went to buy the Porsche, I was ready to splurge. But me being me, I wanted to again put half down.

The dealership, however, put a kink in my well-laid plans for a financially responsible splurge. They wouldn’t give me a loan or a lease. Who would have guessed that Porsche had stingier financing than Nissan? And, as it turned out, even though I was now running my own company and had enough money to put down a hefty deposit, my credit was still only mediocre. It was a WTF moment that drove home to me how screwy the credit system is. I was reminded again that the common way is not always the best way. Therefore, I paid cash for that Porsche. A #GIRLBOSS has gotta do what a #GIRLBOSS has gotta do.

This time, when I got my keys, nobody got a hug. And no, it wasn’t because I was bitter about the financing. It’s that buying the Porsche, in all of its German-engineered perfection, just wasn’t as special. Nothing will ever compare to the first time I bought myself a car, because it simply can’t be done again.