Student Debt, Handled.

Snowball Wealth is a platform for tackling student loans so you can start savings & investing.

Meet Pamela Martinez, the Co-Founder & CTO of Snowball Wealth. She is empowering the thirty million women in America with student debt to create a personalized plan to paying it off and building wealth. Prior to launching Snowball, Pamela was an Engineering Manager and Software Engineer at the education startups - Seesaw and Clever. She was part of Xbox One’s launch as a Product Manager. Pamela has a degree in Computer Science from Stanford University and grew up in Houston.?

We dive into good vs. bad debt, prioritization and creating a plan to get started investing - even while tackling student loans.

Eve #WealthWednesday Highlight #07: Pamela Martinez, Co-Founder & CTO - Snowball Wealth

How/why did you get into your space?

I think, for me, this stemmed from a pretty personal problem. I'm an immigrant in the United States and I grew up in a working-class family.

My first real exposure to wealth didn't come until I was in college at Stanford and I first realized the amount of privilege that you can get from growing up with wealth.

After graduating, I really realized the power of money. At my first full-time job, I was making 2-3x what my parents were making. Very quickly, I started jumping in and helping my sister pay for her college and then helping my sister pay for her living expenses. My boyfriend and partner graduated with over a hundred thousand dollars in student loans, while I was pretty lucky - I got a full ride. All of these people I love, needed help and stated looking at me for advice.

I actually didn't know anything about investing until someone at work brought it up. I think at that point, I really thought that I had "made it" just because I had a full-time job and was making hundred thousand dollars in my salary. I grew up not learning about investing, without generational wealth.?I had to learn and figure things out on my own.?I started thinking about what happens after you get your college degree, you can do everything right - and still feel stuck financially.

What role do you play in the wealth space and why is it important?

We're really focusing on women, people of color - especially people who are the first in their families to build wealth. I think a major entry point for everyone is their student debt. And for us, I think one of the big things that we're doing is trying to move away from having that be stigmatized. Right now there's a lot of products that help people to start building wealth. But a lot of wealth tech doesn't face the reality that a lot of people who are starting to invest also may have student loans or personal debt. So we are coming in with the assumption that you're coming in with negative net worth when you first start.

What do you believe is the most exciting thing you’ve learned and want others to know?

I think one of the most exciting things that we've learned is that women now represent 57% of college enrollment. We're seeing more women coming into the workforce, starting to tackle that and build wealth. This is a big generational milestone.

On tackling debt - there are a lot of student loan calculators that you can look at that can be pretty helpful in terms of interest percentage on loans. How much am I paying in interest over the long run? If you have something that's really low, like a 2% or a 3%, you might want to just make your minimum payment and focus mostly on investing, unless you really want to just get those loans out of the way. I do think there's a little bit of nuance and personal preference when it comes to this journey. When you have a low interest rate, I think usually it's okay, you can make more money by investing. When you’re more in the medium, I think that's when it could go either way. So, how do you continue to make progress while also starting to get invested in the market? We've definitely seen people take multiple routes. We have some users who prefer to just focus on some of their other goals, but we also have some people who continue to pay off their debt aggressively. They’ll be putting extra money into investing and extra money into debt. A lot of it really depends on how much extra money you are bringing in and if you want to tackle both goals at once or focus on goal at a time.

There’s a stigma around debt and how internalized it has become. A lot of people will try to pay off their student debt before they start paying off their credit card. Sometimes students use their credit card to make up for other living expenses while they’re in school. We've learned how to help people overcome that stigma around debt to pay off their credit cards. Some people are also scared of even taking student loans, when in the last few years, there's about $1.7 trillion in student loans. A lot of people have become worried about that. They ask themselves, “Should I take out loans or should I not?” I think it's something that we should also think about and discuss. For people who are getting ready to apply to college, if you have a plan, you can tackle it. You'll get there. If you don't have another way to pay for college and utilize student loans, there are a lot of people that have them. It doesn't have to be stigmatized. It is something that you can pay off as long as you’re looking for the information and resources around you.?

Debt isn’t always a bad thing. Like you mentioned, Alana, for a lot of real estate investors almost all of their projects and their returns depend on leverage. Debt can actually be an accelerator of returns. Debt can be scary and overwhelming when you don’t have a community and information. And I agree, the information can be hard to find. If you’re feeling confused, lost, or ashamed, don’t be, because it’s really hard for people to find some of this information even when they know what they’re looking for. Snowball’s platform makes the information easier to digest and see.

Who is a person or company that inspires you in the space and why?

One of the companies that really inspires us, even though they're not a FinTech company, is Noom. They try to break down something that's really big and complex - weight loss and building healthy habits. We apply that same thinking to finance. How do we break it down so that your finances are more manageable? How do we help you take it one day at a time and not get too overwhelmed?

We've also taken a lot of inspiration from Credit Karma. They were the first in this space to jump in and give you tools to really help you monitor your credit score and see how that changes over time. They also really got people to understand something that used to be really complex. I think a lot of people didn't really know what their credit scores were before.

What advice would you give to someone getting started?

Finding community is really important. Not feeling like you're on your own. I know when I was helping my sister and working with my partner on this, we didn't talk about it with anyone else. I wish we had been able to find that community and support system. We actually have a community at Snowball where lot of people come in with student loans and go through the journey together.?Celebrating wins is a huge thing here - we have a whole channel dedicated to that.

Anything else we should know?

Don't feel you are stuck. Especially for people who have a hundred thousand dollars or more in debt. Really take it one step at a time. You aren't stuck. You can start investing. You can start saving. And you can and will eventually pay that down. We have a lot of really amazing success stories on our blog. So I think just not letting this take you down and not letting this prevent you from making other big financial moves because you can definitely continue to move forward.??

#fintech #womenswealth #wealthwednesday #studentdebt #investing #investment

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Have thoughts on this week’s topic or questions for me or Pamela Martinez? Post your thoughts in the comment section. Until next week. ??

You can connect with Pamela on LINKEDIN

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