Financial Feminist - 8. Closing the Wealth & Investing Gap for Women, with Sallie Krawcheck

Episode Date: June 11, 2021

You’ve heard of the pay gap, but there’s an even bigger and more terrifying stat you should be worried about -- the wealth gap. I chat with this week’s guest, Sallie Krawcheck (Ellevest), about the wealth and investment gap between men and women, why women are not investing at the same rate as their male counterparts, and the tangible ways we can begin to close the gap.  Sallie Krawcheck is the founder of Ellevest, a digital-first financial company built by women for women. Our HYSA recommendation [affiliate]: http://sofi.com/herfirst100k Order “Financial Feminist: Overcome the Patriarchy’s Bullsh*t to Master Your Money and Build a Life You Love”: https://bit.ly/3PpHvlC Not sure where to start with your finances? Take the free Money Personality Quiz to get tailored resources for your financial journey: https://treasury.app/herfirst100k/money-journey-quiz Ready to start investing? Join Treasury, our one-of-a-kind investing education platform. Learn more about Treasury and our Investing 101 class: https://treasury.app/herfirst100k/investing-101-workshop Official Financial Feminist Merch: herfirst100k.com/hfk-merch Follow Sallie on Instagram: www.instagram.com/sallie.krawcheck As a gift from Ellevest to Financial Feminist listeners, get your first 3 months free! Visit ellevest.com/financialfeminist to redeem. INSTAGRAM: www.instagram.com/herfirst100k/ TIKTOK: www.tiktok.com/@herfirst100k FACEBOOK GROUP: www.facebook.com/groups/362601367623070/ Learn more about your ad choices. Visit podcastchoices.com/adchoices

Hello, team. Welcome back. Welcome back to Financial Feminist. I'm Tori Dunlap, money speaker and educator, founder of Her First 100K, and that girl who treats trips to Disneyland like her personal Super Bowl. So you've heard of the pay gap, but there's an even bigger and more terrifying stat that you should be worried about, the wealth gap. Today's guest is Sally Krawcheck, founder of Ellevest. Y'all, this was such a pinch me moment. Sally has had a massive impact on my work and getting to sit down with her and talk about financial literacy for women and investing was honestly a dream come true in every way you could imagine. Imagine interviewing one of your role models. That's what this episode is.

Sally shared some of her background in the financial industry, including the time that she was fired very publicly twice, and her experience climbing her way to the top of a very male-dominated industry. We talk about the wealth and investment gap between men and women, why women are not investing at the same rate as their male counterparts, and the tangible ways we can begin to close that gap. So if you haven't started investing, maybe because it intimidates you, this episode is exactly for you. So please take a listen. If you love the show, rate and review, subscribe, tell your friends. We appreciate your support of our mission and this movement. Let's listen to the interview. So Sally, I, I'm going to cry. You are the reason I do what I do legitimately. No,

I found you. I discovered you four years years ago five years ago and was into money was into financial feminism and you were the person who was like oh she gets it she's talking about what the what I want to talk about and so this is such a full circle moment for I'm literally gonna cry this is such a full circle moment for me because my business would not exist in the way it does had your work not existed so thank you for being. I'm so excited to have you. I have a full on pinch me moment. So for any listeners who don't know who you are already, can you tell us who you are and what you do? Yeah, I'm Sally Krawcheck. I am the CEO and co-founder of Ellevest, which I guess I can now say is a digital first financial company built by women for women. And I can now say is the first of its kind to reach a billion dollars of assets under management.

Hell yes. And I spent my career on Wall Street. I ran Merrill Lynch Wealth Management. I ran Smith Barney. I ran the US Private Bank of Citigroup. I was Chief Financial Officer of Citi and some other part-time jobs like that for a period of time before becoming a late blooming entrepreneur. So I want to first start your avoidance of the words empower and risk averse have changed how I run my business. I have taken those two things out of my vocabulary. Can you tell us why you don't use those two words anymore? Yeah. So let's start. By the way, I actually saw you talking on Twitter about this the other day

about empowerment. And we were sitting around at Ellevest a couple of years ago now, and we're saying there was just something about the word that was bothering us. And we couldn't quite figure out what it was. And we were debating back and forth. And we said, well, there's something passive about it, isn't it? That you are being empowered, that it is something that is being given to you. Huh? Huh? Well, wait a second. And as women, we sort of bought, yeah, I want to be empowered. We're going to empower women. We're going to do everything.

You know what? We actually have a ton of power. We are more than, you know, pre the pandemic, more than half of the workforce. We direct 85% of consumer spending. We control $7 trillion investable assets. We have plenty of power. It is a matter of our, you know, deciding at some point having the information in order to use that power and how we choose to use that power. But the patriarchy,

if I could, has sort of convinced us that it's each gal for herself, right? That, you know, in the workforce, they're promoting it. The men are promoting each other and talking each other up and giving each other board positions and hiring each other's kids. And, they're promoting it. The men are promoting each other and talking each other up and giving each other board positions and hiring each other's kids. And so they're playing games, a team sport. And we women are buying all of our, you know, be empowered at work books and playing it as an individual sport. Right.

There's only one seat at the table and we all got to find each other for that one seat. And I'm not, I'm not competing with him or him or other for that one seat. And I'm not competing with him or him or him for that one seat because I was there. I'm competing with you, the woman, because it's the woman's seat. And so we got separated somehow and convinced that it was an individual sport and it hasn't worked for us. So that's number one. The second one, which drives me berserk, is when we say women are risk averse. And it's such just a given. And I worked on Wall Street for forever and 85% of the clients there were men.

And when you talk about women, well, they're risk averse. That's why they don't invest. And the implication is the products we're providing are actually terrific. It's their problem. You know, this mutual fund,

buy that, sell that, this stock, Bitcoin, GameStop, you know, all fund buy that sell that this stock bitcoin game stop you know all those things are terrific nothing bad about them and so it's women are risk averse or aren't good at math or aren't good at investing or need more financial education none of those are true i mean yes we need more financial education but so do men none of that we're as good or better at math we're better investors than men. We're risk averse. And Ellevest, we were really the first to say, huh, well, that is one hypothesis as to why women don't invest. Here's another,

that in an industry where 99%, 99.5% of investment dollars are managed at companies owned by white men. 90% plus of traders are men. 98% of mutual fund dollars are managed by men. 86% of financial advisors are men. Maybe y'all built a business for yourself. He didn't mean to, but maybe. And so maybe women are risk averse. Maybe they're like, I'm not buying what you're selling. It makes no sense to me.

I don't see myself in any of you. I don't want to watch a video. I love Kramer, by the way. He's a good friend of mine, but I'm not in the mood. That was what I grew up with, which is so funny. My dad, this stock market is a hobby for him. And that's part of the reason why I have a financial education I do is he loves, but he spends time looking at all these things and researching all these things. Right. And he loves that. It's like golf.

Golf for him, it's golf in the stock market. Those are the two big hobbies. And I don't have the time my dad does to be in an investment club and watch Jim Cramer yell sell, sell, sell on CNBC. So yeah. No, and it's a little bit, I used to use the analogy, which probably doesn't hold very well anymore. You know, the back in the leave it to beaver days, you know, dad spent the weekend fixing the car and tuning the engine and working on the lights and washing it and all that stuff.

And mom would get in the car and just take me from A to B. And then men tend to love that craft in the middle or the sport of it. And women, what we found when we did thousands of hours of research into women and their money at Ellevast is they're just not interested. I don't want to read Barron's. I don't want to watch CNBC. I'm too busy. I don't consider it to be a sport.

I don't even know that my goal is to even have more money necessarily. My goal is to have enough money to start my business in five years or to have more money necessarily. My goal is to have enough money to start my business in five years or to have enough money to tell my boss to take this job and shove it or to buy a home or to retire. Well, that she very much conceptualizes what she wants and that motivates her,

not I'm owning this mutual fund, but Tori, you've got that mutual fund. Right. Well, and that's what my work and your work is largely about, right? It's how do we get money into more women's hands so they have choices? It's not so you can build wealth and be like Scrooge McDuck and swim in piles of money, right? It's more, I saved $100K so I could quit my job and take my business full time you know or i'm trying

to invest as quickly as i can and grow my wealth because i want to have the agency to leave a toxic situation or you know not being a yeah not being a situation i don't want to be in anymore or buy a house and all of us it's two things it is you know the micro which you're talking about um or the i let me use a better the micro, which you're talking about, or the, let me use a better word, the individual, which you're talking about, which is money today is women's number one source of stress. And Tori, our research says that just as you've done, when you begin to take action about it, that relieves the stress. It's actually not even how much is in my checking account. It's, did I put together a budget? Did I meet my budget? Am I investing a little bit out of every paycheck? That's the number one driver of confidence for women in achieving their future

financial goals. I sort of say, my kids are older now, but I sort of say the old kindergarten, you know, take a frown and turn it upside down, right? So that's the individual level. At the macro level, you know, getting more money in the hands of women which is elevast mission is only good right and it's good for society for our sons for our daughters for our husbands for our partners for the economy for the markets for not i mean it just there's nothing bad that happens usually when i speak some smart ass will raise their hand and say but if women have more money they spend it and you're like yep that's called growing the economy that's also that's the most gendered bullshit I've ever heard in my life well by the way typically comes from a

woman who also grew up in a patriarchal society so she's the internalized misogyny of all yeah yep yep so you work and you know grew your career in one of the most male dominated broey industries on earth yeah and i think you give the example and i often use this example in my own work too that you look at wall street and it's a bull out in front of the financial district right you have this like sculpture that's a bull whose testicles you rub to gain financial prosperity, right? I don't rub the testicles for you. Yeah.

It's good to hear. So, you know, growing your career in this super male-dominated industry, how did this change who you are and how did it change what you wanted? Yeah, well, so, but you're right. I mean, look, the fact that we have the money industry has a phallic symbol as its brand symbol. The fact that, and by the way, what also sort of is notable

is that when the statue that, you know, Demma is for the feminine, right? You've got the masculine which is the bull and then a wall street company comes along and says okay let's do the feminine it's a little girl i'm like it's not even a woman it's a little girl you know we actually the idea came to us first and first they wanted to put a cow up and i'm like yeah i don't think we should house personal personal point of view yeah there's actually I would concur I have the deck from it from the from the PR firm okay so how did it change me I don't you know I don't know I I think

I've actually sort of been the same person since I was 12 and even though if you read about me you'd think I was really quite a different person depending on what job I had when I used used to be quite successful, Tori, it was interesting what a bitch I apparently was when I would read about myself in the press. I'm like, that is a terrible woman. What a jerk. And then when I got fired for doing the right thing for clients, it was amazing how delightful I was again. And so I think I was the same person. I've been this energetic and this straightforward, this analytical for forever. It was interesting. What's always changed was the press. Now, what people do say to me a lot, there's an assumption that it hurt my career being in a male-dominated environment. And there certainly were times it did. Absolutely. Absolutely. I mean,

environment and there certainly were times it did absolutely absolutely i mean what you know i was telling a friend of mine the other day when i remember when um they uh the the strip mall in florida with a brothel and the names of the men including robert craft who you know frequently it came out i'm like i'm gonna know people on this list and sure enough one of the people on the list was my CEO's number two, who he used to send to scream at me. And I'm like, yeah, you know, I had no chance, right? That his number two was such a misogynist. He couldn't even see the humanity of women and then was trying to manage me. But there were times when it was good for me to be a woman in the industry because I stood out. And if my work was very good, which I'm going to be frank, it was, you couldn't forget me. You just like, you

know, you'd say, well, she's got 20 male competitors. So, you know, John, who's John? He's got brown hair. I don't know. He's got glasses. I don't know. But for me, well, she's a woman. So if your work was good, there was a chance that it could be actually a positive or even quite a positive. Yeah. So even before you started your career, when you were moving to New York, your father forbade you from moving, right?

And do you feel like that was a common theme in your life to do things despite people telling you not to? And do you think it contributed to your success? Well, I've been underestimated every step of the way. Sure. You know, and yes, my dad, who is my dear heart, you know, gave me typing lessons to prepare for my career as an administrative assistant. But it's been, you know, just every step and not, you know, in investment banking, you didn't get on the

good deals. You know, I was the one who had to babysit the sort of over the hill banker. When I started in research, they gave me the backwater of life insurance. Sounds thrilling. Yeah, it was amazing. But I actually put out some controversial and correct, as it turned out, research on life insurance very quickly, which then got me promoted to covering Wall Street. So there's been this, yeah, she's not going to manage it. She's not going to do it. And I've just, I know I'm smart enough. And then it just becomes, can I work hard enough? And can I take all the rejection? And if any of you out there who are listening have not had enough rejection in your life for sure start a venture-funded business you'll get rejected you'll get rejected unless

you know maybe unless you're a you know hoodie wearing bro who went to Stanford and codes but for the rest of us it is it is a it is a multiple times a day occurrence. Yeah. I have a background in theater. A lot of people are shocked to discover that. I didn't major in finance. I didn't even major in business. I majored in org com and theater.

And I think that that's part of the reason I can run my business is because I was used to hearing no all the time. I was used to hearing, you know, getting rejections and then you'd get the one yes that would potentially be life-changing, but like accepting that you're going to pitch yourself and you're going to be vulnerable constantly and it might not work out. Yeah, I think that's super powerful. But, you know, you use it as means of, you know, when people say pivot,

they tend to mean this large shift, but it can be small adjustments along the way. So each no provides you with more information content, right? Right, right. So it's a method of sort of groping in the dark in a way to find your way to yes. I mean, if you just keep getting the same no for the same reason, and you don't do anything different, then shame on you. But if you use it as a learning experience, and there are a thousand opportunities a day to be successful, we just often aren't looking for them them and we don't see them.

Wasn't that what the definition of insanity is doing the same thing over and over and expecting different results. For sure. Yeah. Yeah. So you were fired very publicly and how did you navigate that? How did you navigate that? And especially being in the public eye.

Tori, I was fired very publicly twice. So you have just shortchanged me one full firing. I feel like me saying you were fired very publicly is already pretty harsh. I like, I don't know. It's like, gosh, do I say it twice? So yeah, go for it.

It was twice. No, it's not a secret, Tori, when it's on the front page of the Wall Street Journal and New York Times. It's Porsche Magazine. Look, they were both difficult. One was when I was at Citi. I was running Smith Barney in the Citi private bank, and I was really trying to do the right thing for clients, and I was fired for it.

It was the financial downturn of 07-08. We had missold products to our clients that we thought were low risk but were high risk, and they lost all their money. And I said, look, this was our fault. In part, there's, you know, you know, there's small print that says you could lose everything, but we, we blew it, we blew it, let's partially reimburse them. There was a showdown at the board, I never thought I'd be at a showdown at the board. And I won. But of course, my boss fired me. The second one was at Merrill. When I was running Merrill, I'd been brought in to turn it around after Bank of America bought it, was there for two years. The guy who brought me in left after like two months, new boss, offered to leave when he came in. He said, nope, you got to stay and turn it around. And we did. And we had great

results. And two years later, when I'm just like, you know, sort of, you know, sort of wiping the invisible lint off my shoulder for look at that turnaround. He was essentially like, thanks for turning it around. We're going to have a guy who has never run a wealth management business before, but who I like, you know, who I know better than you and work more with you. And you're not a culture fit. And so off you go. And by the way, of course, obviously, we're not going to pay you what your handshake was either just don't let the door hit you you know as you leave and so they were both upsetting for two reasons but the the good part is it you know I hadn't like fallen down on my face and failed in public you know if they're good

firings these were good firings. There was a difference of opinion. You know, there was a different direction or whatever that they were going. But the more important point is regardless of it, I am so damn fortunate. And the way I approached it could be, I'm humiliated, I'm on the front page of the Wall Street Journal, or look at me, hot damn, that I would do anything that would get me on the front page of the Wall Street Journal is pretty incredible, actually. And so, you know, if you recognize your privilege, you recognize your good fortune, and you sort of are centered within yourself, right? For this is not all of me. This is not who I am. Right. And by the way, I'm going to get back up. These are really great experiences. I'm going to incorporate them into what I know, and I'm going to move forward. And, you know,

and Merrill or Bank of America, I do remember first he's first he's like, well, we're reorging, blah, blah, blah. And he said, you're out. And I remember going, me? Like what? Like how about somebody whose business is not doing well? But my second thought after that, or maybe third thought was this is actually the best day of my life. And I don't know it yet because I'm spending more time with these people than I am with my family and if they don't want me here I don't want to be here and so I'm going to use this experience and launch into something else so this is the best day because my god if he hadn't then I you know if he hadn fired me, I'd still be there with people who don't particularly want me. Right.

Do you feel like at Merrill, they were kind of trying to manufacture a glass cliff kind of situation? Both of my big jobs were glass cliffs. Both of them. I'm going to stop you really quick. I should probably define glass cliff. Basically, bringing a woman in or bringing somebody into leadership, expecting, you know, the company to fail and then being able to blame it on this new leadership so instead of the glass ceiling right it's like a glass cliff of like we're going to elevate this woman and it's going to be great but it's secretly we're like hoping that

she fails so that we can blame it on her as this company goes downhill so it's interesting tori i actually think i define it myself differently i I define it as, oh, okay, this business is in trouble. Let's have, you know, let's have a person who's different, a person of color, a woman of color, a woman, white woman, let's give it to them. Right. And then if it fails, you know, it's not one of our own. And so I felt like certainly I was put on glass cliffs. You know, when I was brought into Run Smith Barney, it had been truly damaged by the research scandal of the early 2000s. And so I was brought in because I had run really the largest and the only research business

that had stayed out of the scandal, had stayed focused on clients who didn't have to pay big fines, who'd done the right thing. And so I actually think my boss wanted me to be successful. And part of my being brought in as a woman was see how different it really is. Right? See how different.

Like this is a big signal that it's someone from the outside and it's a woman. Same in returning to El Merrill. This is a statement. But what I'm absolutely sure of, Tori, is had those businesses been in good shape, they never would have given the job to me. It would have been next white guy in line, next white guy in line, next white guy in line. Well, how awful is that, right? You're only going to get promoted or you're only going to get into leadership, C-level suite, if we feel like this is like our last resort, right? It's like a Hail Mary of like, okay, we'll put a woman, we'll put a person of color in charge. Yep. That's right. That's how it has been.

There's another way for us to get into positions of leadership, which is to start our own businesses. You know, I mean, yeah, there's some who make it start, you know, in the mail room and work their way up over 30, 40 years, but it's rare for it to be somebody who doesn't represent the majority. In fact, Goldman Sachs, the CEO there, it was now a year ago or so. Well, it was when we were allowed to go outside. So it was maybe longer than that.

And he was saying when he did some work at Goldman about why women weren't making it to the top, everybody thought women quit. And what he found is actually they stayed. They just didn't get promoted. And so for women to get into leadership, you got to start your own thing or so far you've had to have something tough happen

and we got to change it. So we talk about the wage gap a lot in society, in the press, in public rate, and we should continue to talk about the wage gap, but we are not talking about the investing gap. Why is it left out of the conversation? And can you give us, I talk about this in my work constantly, but I love your explanation of how important it is that we need to start talking about this. Well, the investing gap costs some women as much or more as their gender pay gap.

And it's a we women keep most of our money in cash, in savings, earning nothing. And men historically have invested the majority of their money in the stock market in diversified investment portfolios. And the stock market has returned 9.7% on average annually since the 1920s. So the investing gap is a big one. I'm going to add another one, Tori, the gender wealth gap. So if the pay gap is what comes in, and you mentioned we talk about it all the time, Google it, you get 58 million stories that come up. The wealth gap is what we keep and what we have. If you Google it, it's about 15,000 stories, almost none. The pay gap is 82 cents to a white man's dollar. The wealth gap, 32 cents for black women, a penny for women of color, a penny. The pay gap before the pandemic was

slowly moving in the right direction, the wealth gap in the wrong direction. Now in between the pay gap and the wealth gap is something you mentioned, it's the investing gap. And because you've heard the term wealth begets wealth, you know, compounding, we put your money in the market, you get a return, a return on the return, a return on the return. That in part has opened up the difference in the two gaps. The other thing that's in there is debt.

And women tend to have more student loan debt. Two thirds. We hold two thirds of the student debt in the country. Not because college costs us more, but because the pay gap then drives it. And we, you know, when we have mortgages, they have higher rates than they do for men. There are a number of other things, such as we tend to take more career breaks. But that's where Ellevest really operates, of course.

We now have executive coaches to help women earn more money at work. We have debt coaching. We have debt coaching. We have expense coaching. We obviously have investing. We try to operate all through here to help women close their gender wealth gap. Right. And I know you give this statistic a lot, too. I always tell people we take less money because of the pay gap.

It earns less money because we're either waiting to invest or not investing at all compared to men. And then we're living seven years longer on average. So less money growing at a slower rate and they were expected to live longer on that money. That equation makes no fucking sense. Well, and pre-Ellevest, the investing algorithms assumed

everyone was quote unquote average, which is funny if you're a man, because you're going to earn more, your salary is going to peak later and you're going to die sooner. So you die, you know, worst case scenario, oh, I died. I had too much money. For women, you risk running out of money. So just as the medical industry, all the research was done on men and women's heart attacks are different. Do they crash dummies were built on men. So women tend to get hurt more. So in the financial the financial industry again the men built it for themselves not necessarily because they meant to but it's been harmful to our health yeah so i know from my own research and from

feedback i get from women all the time that the reason they don't invest is fear why are why are we so fucking scared? Like, why are we still fearful? Because we've been told to be, right? We essentially receive messages since childhood. Yeah, you know, since childhood still today, we talk to our sons about growth and abundance and investing and be a CEO and go for it.

And for little girls, it's coupon clip, be careful. Don't go to the top of the jungle gym, watch mommy budget. In only a single digit percent of households, does mom take the sole lead on investing? So we look at dad and junior, we look at mom, then we grow up, Tori. There's a ton of male money media, CNBC, Bloomberg, Cranes, it's all very abundance-oriented, how to make money. Yes. There's no female money media to speak of, right?

There's no money magazine, women money magazine. And the articles in the press for women, two-thirds are negative about how hard it is, how difficult, how we don't want to do it. And the other third are patronizing

or flat-out sexist. Yeah. The reason you're not rich is because you buy too many lattes. That's exactly right. We wrote just buy the effing latte because the math is incorrect, but nobody's saying to the guys, don't buy the tool belt, but it's all gaslighting us that, yeah, you make 80 cents to a man's dollar, but it's all your fault because you bought a latte. That actually is not the issue. No. It's the small little pleasure in your life.

And if it's the small little pleasure in your life, great. That's okay. You can grow wealth and buy coffee. It's not a singular issue. No, it's completely gaslit and so you know for us money's money's this negative whereas for men it's this positive so why are we scared because we don't even talk about it you know and i'm sure you know we talk about this all the time we prefer to talk about literally any other topic right sex death politics all of it before we'll talk about money. We have sex before we talk about money.

I mean, like, what? We can't even settle this country, but we have sex before. Like, what? We get fully naked with somebody. Fully naked. Fully naked. I mean, really? That's where we are.

Money is the dingy thing. And I'd love to say, if men got together 200 years ago and said, how do we keep women from having full equality? This is what they would have done, right? They would have made us feel inferior about money, kept us from talking about it. So we wouldn't have invested because we didn't know how to. We wouldn't have asked for the raise or enough risk. We aren't talking about it. So we wouldn't have invested because we didn't know how to. We wouldn't have asked for the raise or enough risk.

We aren't talking about it. And they keep all the good jobs for themselves. They keep the Wall Street jobs, the venture jobs, but the ripple effect, Tori, then they build the industry for themselves so we don't invest and they build the venture industry for themselves

so they don't invest in our companies. I don't think they meant to do it but it's pretty smart if they did i so the explanation i give all the time is that the patriarchy profits off our silence right because they have built these to your point these institutions that continue to support them and they're talking about money but they're telling us that talking about money is taboo because it keeps them in power so if they can sit there and go golfing and do whatever and talk about money right but they tell us that talking about money is bad or that wanting money is bad

because that's a narrative we hear as women a lot you shouldn't want money that's greedy to want money you should just sit down and be grateful for what you have. We're not even right. That's tacky and unattractive. I know you shouldn't be intimidating. You should not be an intimidating woman. Right. And that's, it's even me.

I was on the death, sex and taxes. There's a podcast a few years ago. Oh yeah. And the woman on it started to ask me about my money and, and the dynamic with my family and all that stuff literally I felt a bead of sweat come from my armpit trickle down my side and I'm like I have to stop this interview like I can't do this I can't do this and I'm like like I'm Mrs. Money

like it's my whole thing right yeah and I think back to what you said about how we raise kids too, the more I think about even the toys we give kids, we give boys Legos and things to build and things to create. Right. And we give women dolls, things to take care of. Right. So we tell boys that their value to society, and I'm putting that in quotes, is, you know, what you build and your innovation and your growth. And we tell women or girls, your value to society is caretaking. And it's not you, it's not developing you or your skills or your, the way you see the see the world it is how are you taking care of somebody else yeah and we we learn that by the time we're like four years old

and yeah it it trickles out for every every aspect of our money in our lives well that's why we talk a lot at Ellevest about caring for yourself, which I know sounds corny, but, you know, there's an exercise in which, you know, you name your future self, you give her a different name. Mine is Esther, which is my grandmother's name. And, you know, to your point, we live longer than men. 80% of us die single, not because we choose to necessarily. And, you know, half of marriages end in divorce and, you know, we live longer. And so someone's got to take care of Esther and it's got to be Esther, you know, it's got to be pre-Esther. And if you can sort of picture that and picture your own grandmother

and put aside, you know, sort of start putting aside for her as well, because you don't want to be living in your son's basement for goodness. I mean, I know I don't want to be living in your son's basement, for goodness. I mean, I know I don't want to live in my son's basement. My good friend, Amanda, who runs Dumpster Doggy, she's an investing expert. We talk about bad grannies. It's the bad granny version of ourselves. And mine is drinking Chardonnay at lunch and flirting with her much younger Pilates instructor named Luca. And that's the plan for my retirement. So census data is telling us that the median woman, they're currently spending more than they're making.

How do they make room in their budget to start investing? So, you know, lots of ways, one of which is, you know, up your skill set and see if you can find yourself a better paying job. Go for that raise. As we come out of our homes and the economy, I think is going to be expanding rapidly. Yeah. Jobs are going to be much more available. You know, bringing more in is always a great way to have more money. And by the way, you know, while we're in these last phases of this pandemic, I hope taking whether it's the,

you know, digital marketing class online or the coding class online or whatever you can do to continue to move your skills forward is always a great thing to do. The second thing, take a hard look at your expenses. If we've learned anything over the past year, it's what's important to us and get rid of the stuff that isn't important. For me, it's clothes now and jewelry. The stuff that I just sort of loved looking at and spending money on and I'm looking at my clothes. I'm like, what am I doing with all these? Oh, and I wear sweatshirts all day.

I don't need the clothes to go on it anymore. This shirt looks like, but it's sweatshirt material. It just looks like a regular shirt. I don't know about this waistband thing, but when we go back to work, but, you know, we've all learned something about ourselves. And so we're spending money in places that are not meaningful to us anymore.

So get rid of that. For sure, get rid of some of those streaming services when we're on the other side of this. And then, you know, just, you gotta make some hard choices and pay yourself first. You know, you probably, Tori, we talk about the 50-30-20 rule at Alabast. 50% of your take-home pay to needs, 30% to fund, 20% for Esther, pay down that credit card debt with that, build the emergency fund, invest.

But if that 20% is not doable, you can find 1%. Talk to me about that 1% because something I hear from women all the time is they go, I only have $100 a month, or I only have $20 a month. And what I tell them is like, that is better than nothing. And it's also to build your financial habits over time. So what would you say to a woman who's like, I can barely find any room in my budget, and it doesn't feel quote unquote worth it? Oh my gosh, this is exactly why we founded Ellevest. So let's be perfectly clear that the investment minimums of the industry that have been in place are sexist and racist, right?

Because who's got the money in order to invest? Men. We have no investing minimum at Ellevest, none. So you can invest with a penny. We can only give you a diversified investment portfolio with a dollar. we can only give you a diversified investment portfolio with a dollar. And so much better to start with that $100 or that $10 for one, to get in the habit and have that amount that you invest grow over time. Two, so you can get used to it. Remember, we're not talking about it. Women tend to think the downside in the stock market is much greater

than it historically has been, much so much riskier much riskier right though can i lose everything you're like well you can well and you don't lose until you sell that's the other thing i think people don't for sure you don't actually lose the money until you sell yeah well and if you lose if you lose everything we got bigger problems you know if you're in a diversified investment portfolio and you lose everything believe me you're not going to be thinking about your diversified investment portfolio it's going to be you're going to think about the zombies that are walking up your street because you got it lady you got it the aliens will have landed lost my train of thought there but it's it's so you can watch it and see it and start to build up

a little bit more and if history is any guide you're going to be surprised in five years, 10 years, how much that turns into. That if you're able to just not watch it all the time, you know, not freak out about it, then when you look again, you're going to say if the market sort of again goes up that 9.7% or even 5% on average a year, you're going to have earned a return that you couldn't have earned anyplace else yeah well on that point about not washing it obsessively yeah i get questions a lot again about short-term investing and for me that's a complete oxymoron there is no thing that's no such thing as short-term investing investing the definition is you're putting time energy blood sweat and tears money to grow for a long time so what do you say to the person who's like oh i have a goal that is two years out that i want to start investing for or you know i i want

to do the the short-term thing what risks do they take on with that because you can we can put you in you know an lfs will put you in a mostly bond portfolio. So everybody thinks investing is only equities in the stock market, but there is the fixed income market, which is a form of debt, which has lower volatility, typically lower returns. So there are ways to invest for the shorter term. But I love that you say it's an oxymoron. You're exactly right. And by the way, I would say, there is no short-term investing. It's called trading. Nobody has traded their way to a comfortable retirement. Nobody. Okay.

Maybe some professionals who do it, but there is no individual trader who's like, yep, I'm sitting here on my back porch in my rocking chair and I traded, you know, in and out of Amazon or IBM or whatever. And let's be clear, when you are trading, you are betting. And the bet that you are making when you trade is that the stock market is wrong. That the stock market, you see something it does not see. It is you versus, let's be perfectly clear, tens of thousands, if not more, of full-time traders, portfolio managers, analysts, junior analysts, senior analysts, institutional salespeople, research analysts, whose full-time job it

is and has been to price the individual stocks. Okay? Yep. We went to school for it and many of them have done it for decades. It is what they do. And somehow we're going to come home. At the end of the day,

we're going to turn on CNBC. We're going to beat everybody. We got it. We got it figured out. Well, and I think too, we see all of these, and the media does not help with this. We see all these public success

stories of millions of dollars for game stop and all this shit and it's like how much risk though did they take on to do that they're not showing the people who lost the money necessarily right they decide to tell that story but here's the other thing tori and this is really important which is that when women outsource money to their partner, for example, the man in their life, and remember that money comes back to them in 80% of cases, right? So when that money comes back to them, 74% of them have a negative surprise. And I've seen it with my friends. The worst week of their life, their husband died or their husband left them. And they've been out of the money.

And then they're like, all right, what do I have? 74% negative surprise. And what I think is happening there, Tori, is that just as we women are taught that we're bad with money, men are taught to be confident with money. Men are taught that they're supposed to be good with money. money. Men are taught that they're supposed to be good with money. And so they're trading GameStop or, you know, paying too much in fees or staying in the wrong mutual fund. Or making these big moves because they feel like that's the sexy thing to do. Or, you know, playing golf with their financial advisor and allowing him to overtrade.

advisor and allowing him to overtrade. And so, you know, it hurts us. The patriarchy hurts us with these bad messages around money. I think it hurts men as much or more because they are isolated. They're not supposed to ask for help. They try to do it on their own. And then, you know, they don't have anybody to lean on. So I think it is the most loving thing a couple can do to both engage with the money. And by the way, the more often a couple talks about money, the happier they report being. And I think, I don't know where my chicken is or where my egg is, but I think it's that we're in it together. We're supporting each other. Right. Well, and it also makes for a more beneficial, healthy relationship in in general but also around money when you're viewing it as a tool again to get these specific things out of life so if you're

like we want to travel internationally that's right two times a year how do we use money as a tool to get there well in every way money is more than just money you know to your point it's how do we spend our free time it's also power right yep no the unhappy couples who aren't talking about it you've probably got one partner who's keeping no you don't need to know we're good so money is never just money money can either be a significant positive or a significant negative one of the things that has really irked me, and I would love your thoughts about it, is when the whole GameStop thing happened. We had the conversation shift to, oh, this is a democratization of Wall Street. Yeah.

And I call full bullshit on that. Because if we're going to have a democratization from straight white men who run hedge funds to straight white men on a Reddit forum, that is not democratization if it leaves out women, people of color, etc. Any thoughts on that? Well, I think everybody who wasn't involved in it, first of all, should be happy to be left out because there was a lot of, you know, there's... Sure, sure. Right? Just completely stay away from it. Look, Ellevest is all about democratization of investing. You know, that was clearly trading. What bothers me in all of that is the view that you are trading for free when nobody trades for free. Right.

And that, you know, there are their payment for order flow, which hurt the price at which you sell stocks that individuals aren't aware of. And, oh, I got it for free. No, you didn't. You got a price very different from what you otherwise could have gotten, theoretically. I've been around for a while and it's just like, these issues keep popping up in different forms where the professionals scrape money that individuals don't know is being scraped and make a fortune off of naive individuals overall. So I'm all for the democratization of investing, not Bitcoin yet, not the GameStop,

but of true investing. And I'm all for greater fairness. And people would say more disclosure, little tiny type at the bottom of a website isn't always the right way. Well, and lofty language that feels like it's not in English. There's so much investing jargon that gets thrown around where people are like, I don't know what this means. If you were to explain a stock, right? It's a piece of a company. Cool. That's a lot easier explanation than... Oh, well, by the way, this is part of the democratization of investing, Tori, which is one of the things we found in our research at Ellevest

is that men will invest through jargon and terms they do not understand. Women will not. Blindly? Well, you know, it's actually been a positive. So when I was running, back in the day when I was running Smith Barney, 84% of our clients had a managed account. Neither gender knew what it was. Neither gender would ask. And I always loved to joke, men don't ask for directions. Women don't want to bother. The men bought it and the women didn't. Now, your reaction, well, they would blindly buy it.

Yeah, but they were much better off. Because even though they didn't know what it was, if the market is upward trending over time, they're at least invested. And what's hurt us as women, we've been socialized to get A's. And so what we see again and again is I'd better, I don't want to bother my financial advisor, but I got to figure out what this is. So I got to go buy a book.

Does Tori have a book? I bought the book. I got to put the book on the table. I didn't read the book. I never read the book. I didn't want to read the book. I started to read the book. Wait till next week.

Oh, wait till next month. I'll figure it out. Like that's what I hear a lot of times. Women, they want to read the book i started to read the book until next week i'll wait till next month i'll figure it out like that's what i hear a lot of times women they want to do it correctly so they're like i'm afraid i will invest wrong i hear that every day and i'm sure you do too i am worried if i get started investing i will quote do it wrong and i'm like you cannot let inaction or paralysis keep you from actually doing the fucking damn thing. And it's not your fault that you're not doing the damn thing. Everybody's told you to not do it. For sure. And it, you know, and, and what we should have is a clock next to the bed that shows her that she can lose, you know, depending on how much money, how long she waits

time, a hundred dollars a day. Right. And I often say to women, so, you know, if you're making 85K a year and you invest and you leave money in cash versus investing as much as a man does over time because of the power of compounding, you could lose up to $100 a day. And I just, I say, you know, if you had a purse and a hundred bucks fell out one day and the next day another hundred bucks fell, like how many days would it take you to fix the purse? Like you might lose 200 bucks, but you wouldn't lose three. And yet investing, because we don't see it and because we perceive it as riskier than it is, and because we perceive it as less, you know, less wealth creating than it's historically

been, we just let it wait. And that's why we founded Ellevest, the only financial company built from the ground up for women which you know even when i say today tori i'm like that really sounds sort of dumb except you know when you get into the details of it and you realize that the industry just wasn't built for us so my final question for you get on your soapbox and tell every single woman who's listening why she is powerful and why she is deserving of money? Because she's a total badass. Because we all are. Everybody deserves to be the star of their own life. And again, I know we've been socialized not to talk about money, but you can't do it without having money, without having the freedom that that brings to take the job you want to take can't get out because they can't afford to.

And if you're not going to do it for yourself, you've got to do it for our children, for our daughters, for our nieces, for our nephews, for our sons. Because we may all be like, you know, I'm okay. And the dad, oh, we're okay. But nobody wants to see their daughter in a position of having a smaller life than their son.

And if we're not modeling that behavior for her, it's going to perpetuate itself. Where she's like, I'm not good with money. And so we have to do it for then that next generation as well. Sally, thank you. Where can people find you? Oh, LFS.com. Find us there. So much amazing information from this episode.

If you want more info about Ellevest, check out the link in our show notes. And we're not done talking about investing. Next Monday, I am giving you an investing 101 episode that will blow your mind, giving you the very actionable steps to finally get started investing and growing your wealth. If you want more information about what we discussed in this episode, Sally, myself, and this show, check out our detailed show notes at financialfeministpodcast.com. Can't wait to see you back here next week, financial feminists. Talk to you soon. Thank you for listening to Financial Feminist. Financial Feminist is produced and hosted by me, Tori Dunlap. Theme song and audio production by Jonah Cohen Sound.

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