Personal Finance

What author Stephanie Kiser learned as a nanny for the ultra-rich

Published

3 months ago

August 24, 2024

Business Finance News

Stefanie Kiser Book: “Wanted: Toddler’s Personal Assistant”. Cover design by Jillian Rahn/Sourcebooks.

Courtesy: Stefanie Kiser

Stephanie Kiser came to New York City in 2014 as a new college graduate, hoping to become a screenwriter. Instead, she spent the next seven years as a nanny for wealthy families.

Kiser’s new memoir, “Wanted: Toddler’s Personal Assistant: How Nannying for the 1% Taught Me about the Myths of Equality, Motherhood, and Upward Mobility in America,” details her unexpected career detour.

Her seven years as a nanny saw her escorting one client’s daughter to $500-per-lesson literacy tutors on the Upper East Side, driving Porsches and Mercedes for everyday errands and sheltering in place at a family’s home in the Hamptons during the Covid-19 pandemic. Her clients included families with dynastic wealth as well as those with high-paying jobs such as doctors and lawyers.

In Kiser’s first nannying job, she was paid $20 an hour, far more than the $14 an hour she estimates she would have made as a production assistant under a short-term contract. Plus, she often ended up working extra hours.

“It usually ended up being like $1,000 a week with everything that I was doing,” Kiser said.

That first job opened doors for higher-paid positions through nanny agencies. In Kiser’s final year as a nanny during the pandemic, she estimates she took home about $110,000.

“Even though I had the least respected job of my friends, I definitely was making the most,” said Kiser, who is now 32 and works at an ad-tech company in New York City.

CNBC spoke with Kiser about some of the financial lessons she learned during her time as a nanny, and why she ultimately left the role.

(This interview has been edited and condensed for clarity).

No prospects for job growth: ‘I was very stationary’

Scarlett Johansson on Location for “The Nanny Diaries” on May 1, 2006 at Upper East Side in New York City, New York, United States.

James Devaney | Wireimage | Getty Images

Ana Teresa Solá: When I first saw this book, I thought of “The Nanny Diaries,” a novel published in the early 2000s and then adapted into a movie. What made you decide to turn your story into a memoir instead of a novel?

Stephanie Kiser: I read “The Nanny Diaries” when I started my first job. It definitely hit home at the time, but I did feel like it was sort of a satire. I didn’t want to villainize the rich or the poor because I have people I love very dearly on both sides.

The intention of my book was to make a social commentary. It was my hope that I could bridge this understanding a bit between the two sides because there’s this thought that poor people just aren’t working hard enough and rich people are just inherently bad.

I don’t think that’s necessarily true, but I think that people who are wealthy, who are employing these people who really need these jobs, they do have privilege and an opportunity to either make someone’s life better or worse.

A contract as a nanny is important because there’s no HR.

ATS: You mention that you could not afford to work in a professional job in New York because the pay was much lower than you were making as a nanny. Did you feel trapped?

SK: When my last boss read this book, she felt sad and was like, ‘I didn’t realize you were so miserable doing the job.’ I said, ‘No, I wasn’t miserable doing the job. I loved your kids so much, but this was not the job I wanted.’

I did feel trapped. I felt like there’s nothing else I could possibly do, and it got a little bit worse as time went on.

All my friends were growing in these jobs and they were getting more experience in their resume, and I wasn’t. I was very stationary in this position.

It wasn’t a good feeling to feel like there’s nothing else I could possibly do. Now I have a different job and this is the first year that I’m earning more than I did nannying, which is great, but the first couple of years after nannying were definitely really hard financially, making that shift.

‘There’s no HR … the contract is really all you have’

ATS: A family offered you a salary of $125,000, plus full health and dental, a monthly metro card and an annual bonus. But you went with a different family for less pay. You mentioned you were waiting on a contract. Why is that so important in the business?

SK: A contract as a nanny is important because there’s no human resources; there’s no laws protecting you. Your employers are fully in charge of everything and they determine everything. [New York State does have a “Domestic Workers Bill of Rights” with a few protections.]

At a regular job, you can be like, ‘I worked 60 hours already this week, and I’m not going to work more.’ You can’t do that here [with a nanny position.]

The contract is really all you have, and to not get the contract was really worrisome. Your whole life was going to be a nanny for this family. And I was coming off of a job where that had been really tricky, feeling like I wasn’t really a person, and I didn’t want to accept a job where that was the case again.

Stefanie Kiser Book: “Wanted: Toddler’s Personal Assistant”. Cover design by Jillian Rahn/Sourcebooks.

Courtesy: Stefanie Kiser

ATS: Can you describe the differences between an au pair and a nanny?

SK: An au pair is allowed to work a certain number of hours, like up to 30 hours a week or 40 hours a week, but there is a clear boundary because they often work for an agency. The agency that has sent them has told you very clearly they cannot work more than this.

They get a very small stipend, but they do get specific accommodations, maybe they have their own room. They have all their meals paid for, transportation. An au pair has more things in place to make sure that they’re not taken advantage of. Nannies often don’t have these protections.

Nannies who come from agencies are slightly more protected and those are typically the ones who get contracts. But these are the best of the best nannies; these are career nannies who have been doing this for 50 years; they’ve raised so many kids and they have amazing references. Or it’s a young nanny that just got here after graduating from a great university and has like 10 skills that they are able to offer. So this is a luxury, honestly.

Childcare bill gains momentum on Capitol Hill

ATS: You also describe the uncertainty associated with this job. It seems like nannying work can have a low barrier to entry, with salary growth potential, but then there are all these other risks.

SK: I’ve known nannies who’ve gotten pregnant and they tell their boss. There’s no, ‘We’re going to pay you three months maternity.’ there’s no, ‘We’re gonna let you leave on month eight so you can rest.’ There’s none of that.

You can never really feel safe in the job. If you have a medical emergency, if anything goes wrong — I’m sure there’s exceptions, but for the most part, you’re sort of just out of luck. It is a really risky career in that sense.

‘That’s how you know they’re wealthy’

ATS: According to the Pew Research Center, about 47% of childless adults under 50 in 2023 said they are unlikely to ever have children. What would that mean for nannies?

SK: I wonder if that applies to the sort of people that I’m writing about. I wonder if for them this is a decline we’ll see or if they’re sort of outliers.

If it is the case, I think it’s a really serious problem. There are a lot of people in New York who come here and they need something to get by, who babysit, maybe it’s their after work job and that’s how they do it. Or there’s people who don’t have papers that are really limited in what they can do, and a lot of times, housekeeping and nannying is the only option.

ATS: At the end of the book, you write that you received an offer as a personal assistant for a CEO with a $90,000 salary and benefits. Was that starting point below what you had been earning as a nanny at the time?

SK: For sure. As a nanny, I had made $110,000 … So it was a significant decrease.

I had to work very quickly and very hard to get promoted. I was a personal assistant and I was an executive assistant, I changed companies last July and I became a senior assistant, and that was the role where I finally made more than I did nannying. And I don’t think I could have done this, made this transition, if my student loan payments weren’t paused because of Covid.

ATS: You write in your book that some families signal their wealth by having many children. I’m curious to hear more about that.

SK: I think about where I was born and where I came from, and anytime there was a family that had like five or six kids, it was sort of like, ‘Well that makes sense, because they weren’t wealthy.’ And then you come to New York and you see someone on Park Avenue that has five or six kids, and it’s like, ‘That’s how you know they’re wealthy.’

Here, if you do have three kids, you start sending them to preschool at $40,000 a year, and then they’re going to these elite schools from kindergarten to 12th grade that are $60,000 a year, and then you’re sending them to Harvard for four years.

And it’s not even just the schooling, it’s most of the time you’re sending three kids to this school, then you’re employing a full-time nanny after they have private guitar lessons.

ATS: What would you tell women in their 20s who are in the shoes you were in a few years ago?

SK: Do things in parallel. I don’t think I would have been happy if I had done just the nannying. I couldn’t have survived on just writing, but I think that by doing this in parallel, things turned out exactly how they were supposed to be for me.

Nannying was so important for me because not only was I able to make money to live, but it allowed me to get a foundation. When I moved to New York, I had nothing. Now I have a fully furnished apartment, things that you need to be a fully functioning adult. I have a dog, I’m able to take care of him and I have a car. These are things that I couldn’t have done without being a nanny.

Personal Finance

Why Trump’s tax plans could be ‘complicated’ in 2025, policy experts say

Published

20 minutes ago

November 19, 2024

Business Finance News

U.S. President-elect Donald Trump speaks during a meeting with House Republicans at the Hyatt Regency hotel in Washington, D.C., on Nov. 13, 2024.

Allison Robbert | Via Reuters

Congressional lawmakers will soon debate expiring tax breaks and new promises from President-elect Donald Trump.

Agreeing on cuts and spending, however, could be a challenge.

With a majority in the House of Representatives and Senate, Republican lawmakers can pass sweeping tax legislation through “reconciliation,” which bypasses the Senate filibuster. Republicans could begin the budget reconciliation process during Trump’s first 100 days in office.

But choosing priorities could be difficult, particularly amid the federal budget deficit, policy experts said Tuesday at a Brookings Institution event in Washington.

Legislators will be “representing their districts, not their party,” Howard Gleckman, a senior fellow at the Urban-Brookings Tax Policy Center, said Tuesday in a panel discussion at the Brookings event.

“This is a lot more complicated than just the reds against the blues,” he said.

‘Political divisions’ could be a barrier

With a slim majority in Congress, Republican lawmakers will soon negotiate with several blocks within their party. Some of these groups have competing priorities.

Enacted by Trump in 2017, the Tax Cuts and Jobs Act, or TCJA, is a key priority for the next administration.

Without action from Congress, trillions of tax breaks from the TCJA will expire after 2025. These include lower tax brackets, higher standard deductions, a more generous child tax credit, bigger estate and gift tax exemption, and a 20% tax break for pass-through businesses, among other provisions.

The more things you try to bring in, the more potential political divisions we have to navigate.

Molly Reynolds

senior fellow in Governance Studies at Brookings Institution

Tax bill could take longer than expected

Since budget reconciliation involves multiple steps, policy experts say the Republican tax bill could take months.

Plus, Congress has until Dec. 20 to fund the government and avoid a shutdown. A stopgap bill could push the deadline to January or March, which could take time from Trump’s tax priorities.

“The idea that they’re going to do this in 100 days, I think, is foolish,” Gleckman said. “My over-under is Dec. 31, 2025, and that might be optimistic.”

However, the bill could get through by Oct. 1, 2025, which closes the federal government’s fiscal year, other policy experts say.

Don’t miss these insights from CNBC PRO

Personal Finance

Why it helps to file early

Published

2 hours ago

November 19, 2024

Business Finance News

We are overly reliant on student loans to fund higher education, says NACAC CEO Angel Perez

This week, the new Free Application for Federal Student Aid expanded its “phased rollout” so all students can now apply for aid for the upcoming academic year.

Up until Monday, the 2025-26 FAFSA was only available to limited groups of students in a series of beta tests that began on Oct. 1.

Now, the form is open to all and the Department of Education has said it will be out of testing entirely by Nov. 22 — which puts the official launch ahead of schedule.

Typically, all students have access to the coming academic year’s form in October, but last year’s new simplified form wasn’t available until late December after a monthslong delay.

This year, the plan was to be available to all students and contributors on or before Dec. 1.

Students who submit a form during this final “expanded beta” phase before Nov. 22 will not need to submit a subsequent 2025–26 FAFSA form, the education department said.

There are still some issues with the new form, some of which also plagued last year’s college aid application cycle, but they all have workarounds, according to higher education expert Mark Kantrowitz.

Altogether, this year’s rollout is “much better than last year,” he said.

Last year, complications with the new form resulted in some students not applying at all. Ultimately, that meant fewer students went on to college.

Why it’s important to file the FAFSA early

“Students should take full advantage of the early rollout and submit their FAFSA as soon as possible,” said Shaan Patel, the CEO and founder of Prep Expert, which provides Scholastic Aptitude Test and American College Test preparation courses.

The earlier families fill out the form, the better their chances are of receiving aid, since some financial aid is awarded on a first-come, first-served basis, or from programs with limited funds.

“The earlier you apply, the better your chances of securing more aid that doesn’t need to be repaid,” Patel said.

“Submitting early also means you’ll receive your financial aid award letters sooner,” he said. “This gives you ample time to compare offers from different schools and make an informed decision without feeling rushed. Finally, knowing your child’s financial aid status earlier reduces stress and allows your family to focus on other important aspects of college preparation.”

For many students, financial aid is key.

Higher education already costs more than most families can afford, and college costs are still rising. Tuition and fees plus room and board for a four-year private college averaged $58,600 in the 2024-25 school year, up from $56,390 a year earlier. At four-year, in-state public colleges, it was $24,920, up from $24,080, the College Board found.

The FAFSA serves as the gateway to all federal aid money, including federal student loans, work-study and especially grants — which have become the most crucial kind of assistance because they typically do not need to be repaid.

Submitting a FAFSA is also one of the best predictors of whether a high school senior will go on to college, according to the National College Attainment Network. Seniors who complete the FAFSA are 84% more likely to enroll in college directly after high school, according to an NCAN study of 2013 data.

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Personal Finance

89% of Americans do not consider themselves wealthy, Fidelity finds

Published

5 hours ago

November 19, 2024

Business Finance News

Why so many young adults are still living with their parents

Inflation is cooling and wages are rising. Yet, few Americans — including millionaires — feel confident about their financial standing.

Across all income and asset levels, 89% of Americans said they do not consider themselves wealthy, according to Fidelity Investments’ State of Wealth Mobility study. Fidelity polled 1,900 adults in August.

“Only one-tenth of Americans consider themselves wealthy today — despite many having considerable wealth,” said Rich Compson, head of wealth solutions at Fidelity Investments.

For most Americans, the definition of what it means to be wealthy is relatively modest, with 71% saying being wealthy is simply the ability to not have to live paycheck to paycheck.

Roughly 57% said wealth also entails traveling and taking vacations, while 56% said it’s being able to pass down money to the next generation.

Nearly half — 49% — said feeling wealthy meant the ability to own a home, Fidelity found.

For high-net worth individuals, or those with $1 million or more in savings and investable assets not including real estate or retirement funds, more households associated wealth with traveling and fewer said a major criterion for feeling wealthy was not living paycheck to paycheck.

Surprisingly, the same share — 49% — said being wealthy meant owning a home.

Obstacles to feeling wealthy

Housing affordability has become a major hurdle.

High home prices and higher mortgage rates along with low inventory have put ownership just out of reach for many households.

One “silver lining” is that affordability has improved somewhat since October 2023, when mortgage rates were near 8%, according to a new analysis by Freddie Mac.

Jose Luis Pelaez Inc | Digitalvision | Getty Images

Although vacationing has also gotten more expensive, Americans are still determined to travel.

Travel spending among households continues to outpace its pre-pandemic levels, some reports show.

However, concerns about high prices are playing a larger role in keeping some would-be vacationers home. Those that are travelling have had to adjust their budgets accordingly, spending roughly 10% more compared to 2023, according to another study by Deloitte.

Rising debt is another threat to wealth

At the same time, rising consumer debt has weighed on household balance sheets. Nearly half, 44%, of Americans said credit card debt is the biggest threat to their ability to build wealth, according to a separate report by Edelman Financial Engines.

Americans now owe a record $1.17 trillion on their credit cards, and the average balance per consumer stands at $6,329, up 4.8% year over year, according to the Federal Reserve Bank of New York and TransUnion, respectively.

“High interest rate credit card debt, more than other sorts of debt, is a savings killer, because when you have it, you have to feed the beast. You can’t save, you can’t invest,” Jean Chatzky, personal finance expert and CEO of HerMoney.com, told CNBC in September.

“That stands in the way of people building actual wealth and therefore feeling wealthier,” she said.

What it would take to feel rich

Most people — roughly 65% of those polled — said they would need $1 million in the bank to consider themselves wealthy, although 28% said it would take at least $2 million and 19% put the bar at $5 million or more, Edelman Financial Engines found.

Among current millionaires, 68% said they would need at least $3 million and 40% said feeling wealthy would require $5 million of more.

Edelman Financial Engines polled more than 3,000 adults over age 30 from June 12 to July 3, including 1,500 affluent Americans with household assets between $500,000 and $3 million.

When it comes to their salary, 58% of all of those surveyed said they would need to earn $100,000 on average to not worry about everyday living expenses, and a quarter said they would need to earn more than $200,000 to feel financially secure.

In most cases, feeling financially secure is not based on how much you earn, but rather a commitment to save more than you spend, maintain a well-diversified portfolio and work with a financial advisor, experts often say.

“Having confidence in being able to invest strategically is what often separates those who feel they are wealthy from those who don’t,” said Fidelity’s Compson. “Improved confidence starts with education and planning.”

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