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Insight and Influence

This article appears in the 2015 Mackinac Policy Conference edition of the Detroiter Magazine. Click here for more information on the Conference.

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By Jacquie Goetz Bluethmann

Mackinac Keynoter Mellody Hobson’s Humble Beginnings Lead to Focus on Finance

Mellody Hobson’s ascent to financial guru, regular CBS News contributor and chairman of the board of DreamWorks Animation SKG comes on the heels of a childhood that can be considered anything but privileged. The daughter of a single mother and the youngest of six children, Hobson speaks regularly of the financial struggles endured by her family throughout her childhood.

“We had a really crazy life,” Hobson recalled during her TEDxMidwest talk in 2013. “I say it wasn’t boom or bust. It was bust or normal. We’d either have a place to live and things would be fine, or we’d be getting evicted, or our phone would get disconnected, or our lights would get cut off, or our car would get repossessed. In order to get me to school, my mom would go to the gas station and ask the gas attendant if we could borrow $5 worth of gas.”

Using hot plates to warm water for their bath was not uncommon for the Hobson crew. And when it came to birthday parties, the youngest sibling was typically on her own to finance and secure a present for the guest of honor – not to mention a means of getting to and from the party. Despite her family’s seemingly ever present financial insecurity, Hobson’s mother worked hard to provide for her family and to instill a work ethic that has served her youngest child especially well.

“She always taught me that anything was possible,” Hobson has said of her mother. “She was very much about making sure you could stand on your own two feet.”

Hobson couldn’t wait to “be big” and take control of her own finances, never shying away from big dreams. She went on to graduate from Princeton University using summer breaks to intern at Ariel Investments in her hometown of Chicago. Upon graduation, she went to work for Ariel full time, earning an entry-level salary of $35,000 a year.

“I was so excited to be able to pay my bills,” Hobson recalled during her TEDXMidwest talk of her entrée into the professional world. “I would sit on my bed in my little studio apartment, and I would just be grateful that I knew I could pay my rent and my phone bill. Even though it wasn’t a lot, it was enough. I was convinced at that point, from that day forward, I would live my life very differently than how I grew up. I would take responsibility for myself financially, so I’d never be in the situation that I felt before and that level of insecurity.”

Today, Hobson is president of Ariel Investments and is responsible for firm-wide management and strategic planning, overseeing all operations outside of research and portfolio management. Frustrated by the lack of emphasis on finance and investing in most U.S. classrooms, Hobson and Ariel Chairman and CEO John W. Rogers Jr. founded Ariel Community Academy in 1996. The K-8 public school is located on Chicago’s south side and has financial literacy at its core. Each first grade class is given $20,000, money that follows them through their entire grade school career.

“I want to live in a financially literate society,” Hobson said during her 2013 TEDx talk. “It’s amazing to me that in high school today, you can take wood shop or auto as an elective and not take a class on investing.”

The Ariel Community Academy features a saving and investment curriculum covering financial topics, including personal finance, economics and monetary policy. “We want to make kids understand money like I was desperate to understand it as a child,” Hobson said.

Financial literacy is a priority for Hobson, who is also an ardent advocate for investor education. As such, she is a spokesperson for the Ariel/Hewitt Study: 401(k) Plans in Living Color and the Ariel Black Investor Survey, both of which examine investing patterns among minorities.

In March 2014, Hobson delivered a second TEDx talk, this one on race. Even some of her closest friends and colleagues warned her addressing the topic could be risky and position her as a “militant black woman.”

“I realized the first step to solving any problem is to not hide from it,” she said during the 2014 TEDxVancouver talk. “The first step to any form of action is awareness. I decided if I came here and shared my experience, then maybe we could be a little less anxious and a little more bold in our conversations about race.”

Hobson challenged her audience to be “color brave” not “color blind.”

“If you’re part of a hiring process or an admissions process, you can be color brave,” she said. ”If you are trying to solve a really hard problem, you can speak up and be color brave.”

These days, Hobson continues to hone the work ethic for which she has always been known. In addition to her duties at Ariel and her on the DreamWorks Animation SKG board, she’s the director of the Estée Lauder Companies Inc. and Starbucks Corporation. She’s a board member of the Lucas Museum of Narrative Art, the Chicago Public Education Fund and Sundance Institute, where she has been appointed to emeritus trustee.

In April, she was named to the 2015 TIME 100, TIME magazine’s list of the 100 most influential people who shaped the last year.