Well with Arielle Lorre - 261: How to Save, Invest, Build Wealth & Change Your Money Mindset with Ellevest CEO & Co-founder Sallie Krawcheck

Episode Date: July 26, 2023

Sallie Krawcheck, CEO and co-founder of Ellevest, is a Wall Street trailblazer with more than 25 years in the financial services industry. Sallie has led Merrill Lynch, Smith Barney, and Citi Private as CEO. She’s been named “The Last Honest Analyst” by Fortune and one of the “Most Influential People in ESG Investing” by Barron’s. She joins the show to discuss her career, what it was really like being a woman on Wall Street, how she stood out and achieved success and why she doesn’t have time for imposter syndrome. We explore the gender pay and wealth gap, why women and men’s attitudes are different around money, how to change limiting financial beliefs and how to build wealth. Sallie explains how to allocate money from paying off debt, to saving, to investing and so much more. Please note that this episode may contain paid endorsements and advertisements for products and services. Individuals on the show may have a direct or indirect financial interest in products or services referred to in this episode.Sponsors:Go to SundaysForDogs.com/blonde or use the code BLONDE at checkout for 35% off your first order of Sundays.AG1 is giving you a FREE 1 year supply of Vitamin D and 5 FREE travel packs with your purchase. Head to drinkAG1.com/blondefiles to redeem. Get 20% off your first purchase of Vegamour at vegamour.com/blonde and use the code blonde at checkout. New customers get $5 off Lume’s Starter Pack with the code BLONDE at LumeDeoderant.comListen to Better Tomorrow every Wednesday wherever you get your podcasts!Produced by Dear Media.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

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Go to your rice-adviseur or Sunnycars. The following podcast is a dear media production. Welcome to the Blonde Files podcast. I'm your host, Ariel Lori, and I'm here to talk all things wellness. From how to achieve optimal health and well-being to the best beauty tips and everything in between, no topic is off

limits. I know there's so much information out there, so I'm bringing on expert guests and sharing my own experiences to help you sift through all the wellness stuff without the BS. Enjoy the show. Hi, everybody. Welcome to the show. I am very excited about today's episode. I shared a little bit about it last week when I recorded it. But for so many reasons, I just am so excited for you guys to hear this one. And I was so excited to have the opportunity to sit down with my guest today. So I'm talking to Sally Krochek. I will get to her career and who she is in a minute. But sometimes in my career, I've had moments where I'm just very present and very grateful for the opportunities that I have and where this has all gone. And I just feel like I'm really in the flow. And that was how I felt the entire time that Sally and I were recording. She is such an incredible woman. And I was just so grateful that she wanted to sit down and talk to me. And it was a conversation that is going to benefit so many listeners. And I just,

remember sitting there and feeling like this is what it's all about. You know, you hear people say it's not about a destination. It's about the process. And I really felt so grateful for the process or the part of the process that I am currently experiencing in my career and just the chance to meet and talk to so many cool people and hear feedback from you guys and know that you are, you know, resonating with these conversations. So all of the that aside, obviously, I'm talking to Sally Krodcheck. She is the CEO and co-founder of Elavast. She is a Wall Street trailblazer with more than 25 years in the financial services industry. She has led Merrill Lynch, Smith Barney, and City Private as CEO, and we get into her career

a little bit in this episode. It's really fascinating. She's been named the last honest analyst by fortune and one of the most influential people in ESG investing by Barron's. She has also been called one of the most powerful women on Wall Street. And she is just indomitable. She's such a great person to sit down and have a conversation with because she is whip smart. But she also is really funny. She's kind of self-deprecating. She's in on the joke. So she joins the show today to discuss, of course her career. We talk about what it was really like being a woman on Wall Street, both the good and the bad things that came out of that experience. We talk about how she stood out and how she achieved such massive success. We talked about why she doesn't have time for

imposter syndrome. And then, of course, we explore the gender pay and wealth gap. She's all about financial feminism. We talk why women and men's attitudes are different around money. We talk about how to change limiting financial beliefs and the shame that a lot of us have around money. And we talk, of course, how to build wealth, how to allocate money between paying off debt to saving to investing and so much more. It is an absolutely fascinating conversation. And something that we talked about that I had never really thought about is just the difference in approaches to saving and investing and financial planning that women have from men. Our lives are different. We live longer typically than men. I think she said in the episode, 80% of women die alone and we need to account for all of these things when it comes to

managing our finances and planning for the future. So this is why she started Elavest. We talk about this in the episode. And after we recorded, they were kind enough to give you guys a code. So you can use the code blonde. You can go to elvest.com. Use the code blonde and you guys will get one month of Elvest's digital offerings for free. I personally have a meeting this week with an Elvest financial planner as well. I just think everything that Sally said in this episode really clicked for me and I think what they are doing over at Elvast is incredible. So definitely go check them out and please enjoy this episode with Sally Crotchick. Okay, welcome, Sally.

Thank you. Thanks for having me. Very excited to have you here. I was just telling you before we started recording that I've been doing a Sally deep dive for the last few days. And, no, it's all very good. I feel like you're one of my new idols, honestly. And one of the things that I really admire about you is that you seem completely unflappable. I flap.

Are you flappable? I'm flaffable. I try to contain it. you know, to distinct periods of time and only within the confines of my own home. But I've had some career ups and downs and I said, you know, every time I get fired, I like to give myself a day to recover. And what do you do? I drink. I don't shower. I wallow in self-pity. I think of it is sort of a global day of self-pity and then try to pick myself back up immediately thereafter. Well, it seems like you rebound quite nicely. You've had an incredible career. But I'm curious,

who were some of your idols when you were younger? Did you always want to work in finance? Was there anybody that you could look up to in that way? Who were the people that you admired? Of course I did not want to work in finance. I grew up in Charleston, South Carolina, in a pretty patriarchal community where the idea and concept of working and investing or Wall Street just didn't exist. Moving to New York, that idea didn't exist. So I went to typing school to become what was then called a secretary now an administrative assistant. And at some point in high school and college had one or two different individuals who said, you can, you can go. You know, my high school guidance counselor caught me by the arm one day in my mind. You know, she sort of shook it and maybe

it hurt a little bit. But she is like, you're acting like a silly little cheerleader. You know, look at these SAT scores. You know you've got, you know, a future ahead of you if you want. I'm like, what? I do. And then went to the University of North Carolina, which felt very north to me. And then sort of almost went on a personal dare to New York. But there weren't a lot of idols for me or mentors for me in the industry because I was the most senior woman at the age of 26 at the investment bank I worked at in the London office, the most senior. And so it was a matter of, I've got to figure this out myself, recognizing that nobody else has figured it out before me. You majored in journalism. I did. Correct?

So how did you make the transition from journalism to finance? Well, the idea, which wasn't a terrible idea, was let me go learn something about something so I can write something about something I know. The other reason was the offer I had, I think it was like the Miami Herald was for like 12,000. But Wall Street was paying 31. And I said, I'm pretty good at math, and I know 31 is more than 12. So I'm going to head there. And kept trying to get back into journalism, but really couldn't find a job that made sense at that point in my life.

And ended up sort of merging the journalism with the ability with numbers into becoming a research analyst, et cetera. And there are a lot of people on Wall Street who are very good at numbers, they're not as many. who are good with numbers and good with words as well. What exactly does a research analyst do? I know nothing about finance. I just want to put that out here before we delve into all of this. I mean, my listeners probably know up until a few months ago, I had all my money sitting in savings accounts spread out across different banks and a considerable amount of money.

And then I had Rameet Citi on my podcast. I don't know if you're familiar with him. And he's had the same reaction. Oh, dear. And after that, I invested a lot of it, the majority of it. And then he came back on my podcast and I showed him my investments. And then he had that reaction again. Oh, no. Oh, no. Okay, we should chat. Well, as soon as we finish rolling, we'll chat. So a research analyst's bottom line works to help people make money by choosing which investments to invest into in the stock market or the bond market, etc. You know, at this stage of my life, picking stocks, the watching CNBC, the trading, the I think IBM is going to beat estimates this quarter. To me, waste of time. That investing in a diversified investment portfolio, a broad range of stock.

a broad range of bonds, maybe some alternatives, has actually been a winner historically, overwhelmingly over periods of 10 years, 15 years, 20 years, historically. It's worked better than picking those stocks. So is that like the SMP 500 or? Yeah. S&P 500, which is U.S. stocks.

It could be some smaller cap stocks, so more emerging companies. Stocks in Europe, stocks in Asia, bonds in Europe, bonds in Asia, diversifying has been a key tenet of investing by reducing risk. If you put all your money, think about it in one stock. If it goes down, you've got a problem. It could go up, but it could go down a lot.

If you go into a range of stocks, then it's much less likely to have the volatility and historically has been provided a better risk-adjusted return. Can you give us some numbers? I mean, what does that look like historically? just meaning that over time it fluctuates, but it's always pretty stable. Well, it does. So I'll tell you something I was sharing with some women the other day. Their jaws dropped.

You know, we, I think particularly as women, we receive negative messages around money. Yes. Men receive positive messages. Think again, CNBC Bloomberg, all about growing money, growing wealth. Men, you know, you talked about money and the synonyms for them are power, strength, and independence. For women, we get all these articles that are. such downers. Financial planning doesn't have to be really, really hard. Don't buy the latte,

which is coded language to women, don't get the facial. Carrie Bradshaw bought too many shoes. We're portrayed to ourselves as spendthrifts. Forget about the fact we only make 80 cents to a white man's dollar, right? So we start behind. We're portrayed as spendthrifts. And so we feel loneliness, we feel isolation, we feel uncertainty. So it is really quite typical. for us to husband the money. That when men think about money, they think about a river and water coming in and water going out.

And women think of this stagnant pond. And this is what I have, so I'd better keep it. We also, therefore, when we think about the stock market and investing, we tend to think it does this. And I'm moving my finger up and down flat. And there's a lot of volatility

and it's up and down. What's actually been the case historically is it's been this. volatility around an upward trending curve. And investing for the short term in equity in stocks, is that risky? Sure. If you and I said, we're going to invest for one day, the stock market could go down today. In fact, it is going down today.

And then we lost money. If we're investing for a week, it could go down for a week. But if you're investing as you should, which is for 10 years or 15 years in the stock market, do you know what your chances of a positive return were if you invested any day? since the early 1900s and kept the money in for 10 years? You want to guess? No. No, I don't want to guess. 98%. Wow. 98%. You know what it was for 15 years? 99%. You know what it was if you have a recurring deposit, which is what we recommended L of us, a bit out of every paycheck? A hundred percent. Wow. So if I said to you, now, the future can be different from the past. Right. We should, you know,

acknowledge that and maybe this is going to be the 10-year period. But historically, because the U.S. economy is this powerhouse, and it grows, and because people are entrepreneurs and they start new businesses, betting against the U.S., betting against the global markets, betting against, therefore, the stock market, over 10 years has been a losing bet every time. And when you're keeping money in the bank, you're losing money every day. Because that doesn't keep up with inflation, whereas equities have. If you are a dog owner, I'm sure you want to give your dog the absolute best of everything, including food. I know for me, nothing makes me quite as happy as seeing Harvey get

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So unlike some deodorants that try to mask odor with a fragrance, Loomie is formulated and powered by Mandelic Acid to stop odor before it starts. So it's more like a preotorant than a deodorant. And they have unscented, but they also have a lot of really amazing scents. and it doesn't smell like other scented deodorant where it's kind of like you're just putting deodorant and fragrance on top of sweat. It really does block it. I love the P&E Rose. And I also like the unscented and it really is super effective. It's also aluminum-free, baking soda-free, and paraben-free, and pH-balanced for safe use below the belt. They also have amazing body wash and they have these really great deodorant wipes, which I love. And you can get a loamy starter pack, which is perfect

for new customers. So it comes with a solid stick deodorant, a cream tube deodorant, two free products of your choice. So you can get the mini body wash or deodorant wipes or choose whatever else you want and free shipping. And as a special offer for listeners, new customers get $5 off a loomie starter pack with the code blonde at loomidotorant.com. That equates to over 40% off. your starter pack when you visit loomidoterant.com and use the code blonde. So again, that is loomidotorant.com and the code is blonde for $5 off a loomie starter pack. Okay, I want to get into all the specifics on how to invest, how much to allocate where. But I want to rewind a little bit and talk about your experience on Wall Street. I'm sure you've talked about this with so many people.

But what was that environment like and how did you navigate that to, you know, kind of break those ceilings? Like you said, at 26, you were the highest that anybody was. And, you know, you had a really flourishing career up until you transitioned to Elvest and now it's still flourishing. But what was that like? Terrible. It was awful. You have the Sunday scleries. I had the Sunday super duper scleries. There was no unconscious bias at the time. It was. women don't belong here. And it was gross and it was obnoxious and it was adrenaline fueled and it was no sleep. But you know business is an extreme sport. Those were the first years. I found my way to a company called Sanford Bernstein as a research analyst where it wasn't so extreme where people appreciated you for your analytics in your intellect and your hard work as opposed to where you're sort of on the right team.

But the way I navigated it was a little counterintuitive because when I looked up and said, gee, I'm senior at 26, hmm, what should I do? I think some folks, their immediate reaction would be keep your head down. Like keep your head down. Cross the street in a crowd. Do not make any noise. I instead said, I'm going to make a lot of noise. I am not going to be the type of research analyst who says, I agree with everybody.

Oh, IBM just reported earnings and they were a penny ahead of consensus. Let me analyze why. Like, who cares? I'm going to be the one. I remember talking about this with my director of research who said, big calls on big stocks. And what that means is be off a consensus, be different from the industry, and do it on things that matter, on investments that matter. And if you don't have anything to say, don't say anything.

And as a result of doing that, and not necessarily always being right that the stock price was going to go up, but providing our clients with something, huh, I remember saying to myself, if I go to a meeting and I get a, huh, any of those that start with the H, then that's a successful meeting. Because what that says is I brought something to that client that they didn't, hadn't heard before. And so I did that as an analyst. When all the analysts in the run-up to the Internet bubble were positive, I was negative and ended up being right. And I've done it as a business manager and a business leader too. You know, why have the same strategy as everybody else? Let's have a strategy that sees something different.

So for Alavast, the entire investing industry, in my opinion, and I think the facts bear it out, was built by men for men. 98% of mutual fund managers are men, even though women have been shown to be better at it. 86% of financial advisors are men. Women don't invest as much as men do. These things go together. So we built Elevest is the only invest tech and wealth management company that centers women, built by women for women, which is not just different. It is unique.

We are the only ones in the industry that do that. And it's in part that, hey, I'm not even, interested in doing what everybody else does. I'm not interested in forming just another investing company. I want to build the best, the number one, the preeminent company that helps women build wealth because when we do, we're changing everything. Where do you think that contrarian spirit came from? I mean, was it just born out of the circumstances when you were in that environment? It's a good question. I grew up in a crowded house. My parents married young. They had four kids in three years and 11 months, which there are no twins. It was, I know, it's mathematically

doable. It took me a second. Yeah, I know. It does take a moment. It does take a moment. And, you know, when I was young, I didn't want to live like that when I grew up. I wanted money. I wanted to be successful. I wanted to break out of that. And, you know, as kids who were close to the same age, we fought and we battled with each other. And so I was pretty used to, I'm not going to be a shrinking violet. I'm going to stand out. And then I think on top of that, I do sort of have this view because of, because I'm so privileged, is this is a little bit of a game. And why not play to win? Yeah. Right. If you're going to do it, and particularly as we're changing women's lives, you got to play to win.

And the playing to win is not being in the crowd and not doing it like everyone else because we've already demonstrated that investing to date has not worked for women. That's why they're staying away. So you've got to do something different and something else. When you had the idea for L of us,

because just to kind of run through everything really quickly, you were at Stanford and Bernstein, and then you went to some other company. I mean, I can't even remember, but CFO of City Group, right, 40,000 people reporting to you. A lot of other major roles. A couple public firings. Yes.

Good times, good times. Thanks for reminding me. After going through all of that, did you just have this aha moment where all of a sudden it clicked? And how did you trust that? Because sometimes I feel like if I get a really great idea, I need to pause because if it feels really urgent or really good, sometimes I'm not headed in the right. It is so funny. You say that. I literally sent a text from the car this morning on the way down here.

I was brainstorming with somebody yesterday, and I emailed them and said, I have 10 new ideas. I just need to let them settle in and figure out which ones are good and which ones are bad. So I can be the same. But it's interesting because when I was leaving traditional Wall Street, having run Merrill and Smith Barney, as you mentioned, CFO of City, first of all, I got pushed out in a business brawl. The first thing is I refuse to go away. I just refuse that I've got many years left in me of the ability to build something important. And I'm not going to let a little, you know, being fired on the front page of the Wall Street Journal, get in my way. And at the time, I had any number of individuals say to me, you've had this career in investing,

why don't you start an investing company for women? To which I said, F you, that is so condo. descending. Like, I was in the varsity, and now you're telling me, I'm supposed to do like, we're girls infesting together. And, you know, you think about all the little razors for women that are pink and the, you know, the notebooks for women that have seen writing cursive. And just had this reaction, you know, which was internalized misogyny, living in this society of four women is lesser. It's, you know, not as cool. And then one morning, I'm putting on my mascara, getting ready for a day of meetings, and just had this, like,

tingling feeling. Like, I'm about to have a thought. And the thought, which is sort of weird, was the retirement savings crisis is a woman's crisis. That, you know, and as what started tumbling into my brain after that is 80% of women die single. We live six to eight years longer than the men in our lives. Half of marriage is ended in divorce. If there's not enough money to fund retirement, and there's not, it's a woman's issue. It's a woman's issue. Well, wait, how do we solve that? Well, a lot of people working on the gender pay gap,

but the way to build wealth, the scalable way has been investing. Buying a home also, but it's only really been those two ways. And as I began to dig, nobody was talking about a gender wealth gap or a gender investing gap. But the gender investing gap costs some women more than the gender pay gap over their lives.

And so my industry has a, you know, we know what's going on. It's women's fault. They never say that, but women are risk-averse. Everybody knows that. Well, how do you know? How do you know women are risk-werex? Well, they're not investing. Well, yeah, that's a possible explanation. Let me give you another one. They ain't buying what you're selling. That's another possible one. What if we built something that centers women? And that was sort of the idea for Alvest. And by the way, I didn't want to be an entrepreneur. I went to a number of the big banks and said, here's, here are the numbers. Let me lay it out. Here's the hypothesis. Here's what I think we can build around it. Should we partner?

And I remember sitting with a bank CEO, one of the largest banks in the world and him saying, yeah, but don't their husbands manage their money for them? And thinking, yeah, we have to build this from scratch. If we try to build it within the construct of an existing financial institution, I'm sure there's some out there that get it, but I don't have time to go pick through and figure out where these tired notions about women and money, you know, are rampant and where someone's open. So that was it. How does being an entrepreneur compare to working in finance and in the male-dominated industry and being in that environment? So it's, they're both, it's worse. It's worse. Although when you phrase it that way, you're like, yeah, I feel like I'm

serious to say it's better. Oh my gosh, I can finally be myself. It's just hard. You know, I don't have to tell you, starting something from scratch is almost impossible. 90 plus percent of startups fail. I'm shocked. It's not more. And it's because everything about it is hard. Problem identification is hard. Solution identification is hard. Making the solution 10 times better than anything else out there is hard. Getting the right team is hard. Raising money is hard, but you can't get the team until you have money. You can't get the money until you have the team. You got to get the, you know, then you can have a great, then you got to build the product. Maybe that works or not. Then you have to tell people about it. You know, a lot of people build the product, but they don't do the marketing. And for women, you've got to build a brand as well.

So everything is hard. And even with when our results were good, are good, our top of the class, we still had trouble raising money because everybody at the time was looking for Bitcoin, which we were staying away So, you know, it's hard. You know, when you're in big corporate America, yeah, you have a bad day. Yeah, we only made a few million today. What a terrible, terrible day. This is the world. And the politics are bad and all that stuff.

But you are with a startup, and we're, of course, past this now. But in those early days, you're one bad decision from being out of business. And I make bad decisions all the time. Mm-hmm. I'm sure a lot of people ask you about the worst parts of working on Wall Street, but what were some of the assets that you gain from that that you use now? Yeah. The grit. You know, when I was in my early 20s, they were trying, they didn't want us there. They didn't want women there. And they were trying to throw you out. They put you on the bad deals. They put you with the worst managing directors and how many nights could you stay up all night.

and how often could they scream at you. How much cocaine was there? I'm just curious. None that I saw. Really? None. But I wasn't in the in crowd. Oh.

Right? I was for sure on the out crowd. There was a lot of Liger's poker being played, which was a game in the time. I did see some of that. But I had no choice. I couldn't quit and I couldn't get fired because I would have had to declare bankruptcy. I had a one-year lease on an apartment in New York that my parent, I could afford without a job and my parents certainly could afford. So you quickly learn just put your head

down and do the work. A lot of people who sent in questions on Instagram asked about imposter syndrome and how do you avoid imposter syndrome? No, I don't have that. I heard you say that in an interview and I was like, that's amazing. I don't have time for it. You've heard Michelle Obama talk about this a little bit where she said she's been at the table and I've been at different tables for but I've been at the table. And are people smarter than me? Sure. Are they that much smarter than me?

No. Do they work harder than me? Absolutely not. They do not. You know, do they sometimes have more privilege than I do? Sure. But when you get at the table and you recognize these are people who through some combination of hard work and luck and privilege, serendipity made their way to the table,

then, you know, I have every reason to be at that table too, particularly if I'm focused on bringing others along with me. Are you ready for a better tomorrow? Join TV personality Hannah Brown from The Bachelor and Dancing with the Stars on her captivating new podcast as she delves into life's most pressing questions. With her relatable experiences as the ultimate every woman, Hannah explores topics like confidence, love, and self-care all while challenging and inspiring herself and her audience. You can tune in each week for intimate emotional exploration.

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it. And it was so good. So it's such a great way, especially in the summer, to get everything that you need in that one drink. So basically one scoop of AG1 is packed with 75 vitamins. minerals, probiotics, and whole food sourced ingredients of high quality that give major benefits like gut and mood support, boosted energy, and even healthier looking hair, skin, and nails. What I love about AG1 is that it kind of eliminates the need to take a lot of different supplements. I started taking it for gut health a few years ago, which is how AG1 originally came to fruition. And I never stopped because I love the little buzz of energy that it gave me. the fact that it's just so convenient, especially when traveling, there's nothing easier than

just bringing those travel packs, drinking it in the morning, and then you can go out and enjoy your day. So if you want to take ownership of your health, try AG1 and get a free one-year supply of vitamin D and five free AG1 travel packs with your first purchase. Go to drinkag1.com slash blonde files. Again, that's drinkag1.com slash blonde files. Check it out. So I want to get into some of the more specific financial questions. I want to start with what are some of the biggest mistakes women make without putting the blame on women like we've been talking about. Well, let me start with one thing I don't think we recognize as women fully because of the messages we've been given is how important financial wellness is. Yes.

And I know wellness is the topic with you. I would say there is no wellness without financial wellness, that it is foundational, that it's hard to achieve emotional wellness if you're worried about money. It's hard to achieve physical wellness if the stress is corroding your health around money. I would actually say on the hierarchy of needs, it's foundational for it. Women today spend typically more than a week a year worrying about money, some significant double-digit percent of women worry about money every day. And so tackling this is really important. And again, get through those corrosive messages we're being given, which is money is really not for you. Wanting money is unattractive, right? Negotiating for money

is really unattractive. Being rich is, you know, not cool, et cetera. We're in such a place where we've been given such, you know, bullsh around money that there's no amount of money a woman makes. She doesn't feel sort of bad about. Like, it's too much and my friends and they work hard too or it's too little and I feel like such a jerk and how come I'm not keeping up with them. And so we're sort of wrapped in this negativity around money and think of it as scarcity, which for some it is, many it is, rather than men tend to think it's abundance. And so and then the other big mistake, which really comes from the first one is not recognizing that building wealth has the path to build wealth has been through investing. We spend so much time on how to get a raise and how to do well at work

and how to get ahead. All of that is important. That does not build wealth. That does not build wealth. Building wealth, you've got to get your money, earning money on your money. Right. So, you know, you've got to earn the returns and then earn the returns on the returns and the returns. returns on the returns and the whole thing snowballs from there. That's how you build wealth and that's how you build generational wealth. So with investing, people say, what are the biggest investing mistakes women make? They're not the ones you read about. It's not that we overtrade or fall in love with stocks or, you know, forget to sell our winners or blah, blah, blah, blah, blah, blah. It's so we don't invest or we don't invest enough. And we tend to believe it's more complex than it is. And we tend to believe

because we all strive to be, get A's and to be perfect and learn what we should, we tend to think we need to know so much more than we do in order to get ourselves investing. Yeah, I want to go back to something that you said. I feel like for women, there's so much shame around money. There's shame around not having money and there's shame around having money. And I remember I shared a few months ago, I had a seven figure year last year. And I was very proud of that. And I got so much pushback.

And I felt like, you know, I get inspired when I see that. When I see somebody like yourself building something and being successful. And I kind of look at someone like you and other people who are open about that as expanders and something that I can aspire to. But I feel like we're kind of damned if we do, damn if you don't. I know. And we need to change our society. So the analogy I often think of is sports. when I was younger, I mentioned I was a cheerleader. My other choice was volleyball.

I'm like, no, cheerleader, cute skirt, cute little tight sweater, think I have a better chance of dating the quarterback, which, in fact, I did. So, mission accomplished. But, you know, it was volleyball that's a little masculine, a little unattractive. I think sometimes they grunt when they hit the ball. No. Well, along come the Williams sisters, Megan Rapino, the U.S. women's soccer team. Billy Jean King, and they change that stuff. And now physical wellness is such a key part of all of

our lives. Money's in the same place, right? You get shamed for money. You know, money is unattractive. We need to change it so that it's aspirational, that building wealth, having wealth is part of a well-lived life. One, because it's so good for society. I mean, you've probably seen the research that families are better off, communities are better off, society's fair, nonprofits are better off. Everything is better if women have money, but we've been losing ground to men. The ripple effects of it are tremendous. You know, because we don't think we're good with money, fewer women go into venture capital. What does that mean? Well, two percent of venture dollars go to women, CEOs. Two. Wow. Two. Think of all the businesses that haven't been started because women,

entrepreneurs are not being funded. The same is true over on Wall Street, which is the lifeblood of our economy, not very many women go there, not very many women go into investing. And so as a result, not many women invest. So these are corrosive for ourselves personally and for society. In fact, Gloria Steinem has said that this was the miss of the feminist movement of the 1970s, that we didn't focus on building wealth. And as a result of it, have lost ground. Okay, so how do we build wealth? Well, the main questions that I got were, like I said before, how to allocate money. say that somebody has $1,000. Where does, how much goes to saving, how much goes to investments.

Yeah. Well, let me start off, you know, everybody's different. Everybody's financial situation is different. But in order to build that foundation and build that financial wellness, what you want to shoot for is first to get any credit card debt paid off. I don't even want to talk about investing until you do that. Those interest rates are high. Probably everybody listening has had that.

experience or many listening of I bought this dress it cost me X you know I paid the minimum I ended up paying two X for the dress by the time it was all said and done so that you know really sucks away at your wealth so one get the credit card debt paid outstanding and very much to the extent that it is possible try not to buy anything on credit card debt that if you can't afford it without putting it on the credit card and rolling it over then I hate to say it you can't afford it obviously emergencies, et cetera, et cetera, so no judgment there, but you really want to work on getting that paid down. You also want to build a bank account, not as much as you had in the bank,

my friend, but three to six months of take-home pay. You lose your job, you move out from your boy or girlfriend, you need to have a cushion there. The third thing is investing in your 401k at work or an IRA. I know this sounds boring. I know it sounds like a drag, but you've got to take care of old lady you. You know, old lady Sally, you know, if she's going to die single, as the majority of women do, we need to put something aside for her. And the tax benefits of retirement savings are really significant. So putting that money in, if you have a match at your company, that's free money, putting in the amount you need to get that. Then you come to an hell of vest and begin to invest or begin to, you know, work on a financial plan.

Of the flows in, so that's the order in which you do it. Of your take-home pay, what you want to do is, you know, think about the 50, 30, 20 rule. 50% goes to needs. That's, you know, you've got to, you have the gas to get to work. You got to buy the clothes for work, get rent, you know, those crazy things. 30% to fund, going out to dinner with friends. you know, buying the feather boa, whatever it is, 20% goes to old lady you. And then you start with paid on the credit card debt, the savings, et cetera, to give her a firm foundation.

And then there, wait, so 50, oh, 50, 30, 30, 20, 20, got it. 50, 20, 20, 20, future you. And what about savings? Just have the three. Three to six months. And then after that, just invest everything. Now, yes, that's right. Now, for some people, you're, whoa, you know, I don't know, I don't about that. But let's back up. So with the investing, you know, what, what should I invest in? What, you know, for how long, et cetera, very dependent on your personal circumstances and your goals. And so at Elavest, when we put together an investing plan and a financial plan for you,

we take into account your age really matters where you are in the country, what your industry is, so that we can build a career, a money trajectory, a wealth trajectory for you. you. We are the only investing firm out there, wealth firm out there, that takes into account that you're a woman. Why does that matter? Well, it matters a lot because women earn less. We, our salaries peak sooner. We take more career breaks and we live longer. And so, you know, if I think you're a man, then you risk running out of money or more likely risk having a really poor, unfun, not great, blah retirement as opposed to the VESPA driving, you know, retirement with the hottie on the back of the Vespa that we are looking for. And, you know, it depends on what your goals are. Investing to

buy a house in four years. We'll give you a very different investment portfolio than investing to retire when you're 68. We'll have different levels of risk, maybe different categories of investments for you, all personalized to you. I have been getting a lot of of compliments on my hair lately on the internets. And you guys know I'm fully transparent. I have some extensions for length and I also take care of myself from the inside out. However, I do have to say that since I have been paying a little more attention to my scalp, I've noticed that my hair seems shinier and healthier and really good hair starts with your scalp. So I have have been loving vagamore's grow serum. I've been using it for months. I actually want to say since

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at a great savings. Or if you sign up for a monthly subscription, you can save more. You'll never run low on the products that you need to take care of your hair. So give yourself the hair you never thought you could have with Vagmore. For a limited time, the blonde files, listeners get 20% off their first order by going to vagamore.com slash blonde and use the code blonde at checkout. That's V-E-G-A-M-O-U-R.com slash blonde, code blonde to save 20% on your first order. Again, vagamore.com slash blonde, and the code is blonde. Okay, I got a lot of questions about 401k versus traditional IRA versus like a Roth IRA. She's saying no. Okay. What about high yield savings accounts? Yeah. Yeah. Look, the great news today is after years of earning close to zero percent on savings, you can now earn four percent, five percent, four and a half

percent, et cetera. So that's great. The reason those rates are high, though, is because inflation has increased. And so the rule of thumb, which is you're not really making money on your savings in an inflationary environment still holds. It's just you're earning something, but inflation's eating away as opposed to before you weren't earning much and there wasn't much inflation. So what still holds, it's better, but what still holds is investing is really the place where you've been able to build wealth. Let's talk about investing in real estate versus investing in a portfolio? Yeah, yeah.

Well, investing in real estate, i.e. buying a home has been the other great way to build wealth historically. I like investing better. Let me tell you why. To buy a home, you need to take on debt. You have to have a mortgage, typically. There's risk to that. To buy a home, you've historically had to put down a damn payment.

So that means you have to have money before you can make that money. Buying a home has not been available to large groups. of people in the United States because of redlining, old racist policies, and it's been a liquid. If you want to sell your home, boy, I need that money, you can't do it in an afternoon. You've gotten about across the country, about a 3% return annually by buying home, different in different areas of the country, but about 3%. Ups and downs. Investing, on the other hand, you don't have to take on any debt.

You don't have to have a big down payment. you can do it in Elavest with dollars, not hundreds of dollars, though that's good too, or thousands of dollars with dollars. You've been able to sell that stock any day of the week. You might not like the price, but it is liquid. It has gone up on, it's available to everybody. There's no redlining. And the stock market has gone up on average, call it 9% a year since the early 1900s

annually. So I look at this and say, now look, I love a home. I love thinking. about real estate. I love looking at real estate. I love going on websites. I love looking at other people. So like I'll love everything about it. I typically have preferred the risk and return characteristics of investing as opposed to real estate personally. Something that Ramey talked about when he was on the show also were the hidden kind of the phantom costs with buying a home. I think a lot of people think, okay, this is the home's price. This is the mortgage. And that's that. But really, if you compare

buying versus renting in a lot of cases, it's way more beneficial to rent because there are so many additional costs over the years, too. For sure. For sure. I guess it's right. You don't have to paint a stock, do you? No. Nor does the plumbing on a bond ever tend to give out for sure.

Yes. When is it necessary for somebody to get a financial advisor? Is it necessary? Yeah. It can be. I've used and used financial advisors and financial planners. So, and this is something we offered at LVest financial guidance, we really started to lean into it because we're getting to ban.

And let's say you're getting married. What is that going to look like for you? You know, how are you going to split expenses? How are the two of you going to bring the budgets together? You know, how are you going to interact? Let's say you just got a raise. What should you do with that additional money? Let's say you just got fired.

How are you going to manage you? that through. Let's say you're thinking about moving in with somebody. I mean, have a kid, buy a home, all of these things to have someone who, you know, has a certified, is a certified financial analyst, a CFA, which is the highest accreditation, who is conversant in all of these, who can give you a lay of the land for what others are doing and give you a plan for, you know, this is how you can do X and Y, you can't do Z, but then you can still retire. Let's make some trade off. You know, those things that I, you know, I probably capable, I am capable of if I sat down and did it, but I don't do it. Having someone who's conversant in it can only ever help, only ever help.

You mentioned marriage and I did get some questions both about combining assets and then pre-ups. I'm a big fan of a pre-nup, which might surprise people. You know, my husband is incredibly wealthy. and I was in a different position when we got married. But in my experience, the pre-up protects both of us. It's not a negative thing. This misconception, I think, that it kills the romance and it's a contract. Well, marriage is a contract too, essentially.

So do you have any tips for how somebody can navigate combining assets and the pre-up process? Well, look, it's very personal. And the farther in advance of the wedding, you can do it, the better. You know, doing it a few days before the wedding is it will take the romance right out of things. And recognizing that with all things money, it is both the analytics and both the nuts and bolts. And it's all the emotion. I mean, money is not just money. Money is power.

Right? Money is hopes and dreams and aspirations. You know, on the very negative side, not, we're talking about getting married. So I'm going way dark, way fast. But there's no domestic abuse without. financial abuse. And so, you know, on the one hand, it can be that negative power. And on the other hand, building wealth together and building a home and a family together is positive power. So look, prenupts are personal decisions and something that needs to be worked through. My best advice

for women who are in relationships is do not give up control over the money. Do not. The numbers are just astounding. So I mentioned early 80% of women, you know, die single. when they outsource the management of the money to their partner and that money comes back to them in what is typically the worst week of their lives. Right? You've given it to him and something happens so it's yours. It's not a positive.

Right? He's leaving you for this. You're leaving him for that. He passed it. Whatever. Worst week of your life, when that money comes back to you, 74% of women have a negative surprise.

Not 50%, not 30%, 74 and it's in the worst and it's too late often right so 98% of widows say the number one piece of advice they would give to other women is stay involved with the money wow 98% not i mean like it's overwhelming and i know what human nature is i get it not my bobby or steve or todd or joel or no he's the And like, sure, but managing the money can be, you know, tough and lonely. I always think about while she has been socialized to let him manage the money, he has been socialized and given the corrosive messages that it is his, but it is his responsibility to take care of the family.

And so if he had some bad trades in Bitcoin, that's a lonely thing because all of his friends are talking about the wins they've had. And if you're not so good at it or it goes wrong, it's a very, very lonely thing. So stay involved with the money. In most U.S. households today, the man is still in charge of the investing and the woman is in charge of the budgeting. Even if she's the breadwinner. I've heard you talk about that.

Yeah. Even if she's the, well, by the way, the shame around money is so significant that when she makes more money than he does, they both lie about it. Even to the IRS. It's been too emasculating. Yeah, of course. Of course. Do you have any tips on how somebody can kind of modify or outgrow their limiting beliefs around money? It's a really good question. I think talking about it. Yeah. You know, in, you know, making it not such a taboo topic, talking about it with your partner. And it doesn't have to be, I'm bringing in this year doing that. It can start with these are my dreams. You know, these are my values. This is a, how my values express themselves through money. This is what I'm saving for. This is what I'm

investing. This is the home. It can start like that, you know, and then get into more of the nuts and bolts. And same with friends as well. I mean, still, your generation is much better than mine, but women are still much more likely to talk with their friends about sex than money. This is true. Of course it's true. That's what I talk to my friends. Of course, which just really slays me because obviously, like, money is more intimate than sex. sex. Yeah. Who would have guessed that? Mm-hmm. Yeah, sometimes. In a capitalist society, by the way. Yeah. In a capitalist society. Yeah. I'm thinking of times when, you know, I have incredible girlfriends, but I'm thinking of times when I've shared big wins and I feel shame about sharing. And then afterwards,

I think, oh, I shouldn't have said how much that deal was for him. Blah, blah, blah. And you're right. It's so much easier to just talk about men and sex. I don't know why we're so socialized to compare ourselves to each other. Yeah. And it's a, it's a recipe for misery, quite honestly, right? Well, tell us how you enjoy your success and your money. Putting you on the spot. It is putting me a little bit on the spot. You know, I'm, I just know how fortunate I am. I've just dissed real estate here at nauseam. I love my home. You know, we've got a home that we bought. I was not allowed. I'm putting in quotations. but I was not allowed to sell my Citigroup stock when I was at a senior level over there.

It was sort of an handshake agreement we all had. We'd keep the stock and, you know, we're all in it together. And I wanted to buy a home. And so I went and got permission from my boss to sell some of the stock. Citigroup stock, by the way, later went from the mid-50s to less than one. So the greatest financial decision I ever, again, I was overly concentrated in one stock. If I'd been in a diversified investment portfolio, that would have been better. but I took the money and bought a home for my family with it.

And every day, I just love it. I just feel better in it. And it's, you know, because it's been a while ago, we've built up these layers of memories when the kids were younger and then a little bit older and a little bit older. And, you know, my daughter is now going to get married there this summer. So I know, I have chills. I mean, it just, it's these little layers of memory

for something that I wouldn't have been able to access if I had not been successful and made the money. Somebody asked, and I think this is a good question that we can maybe close on, are there any financial milestones to aim for each decade of life? Or is that a little bit arbitrary? I don't love that. You know, it comes from such a position of privilege of the you should have X million by this and Y million by that and Z.

It's just defeating, which is why I'll go back to, I think, what works better is that 50, 30, 20 rule because that grounds you on where you are, right? And if you're investing, you know, that 20% in the credit card debt paid and then investing in an L of S portfolio, for example, what that will do is it starts from where you are and it builds over time. And so not everybody, you know, can get to a million bucks by X age. Right.

And not everybody needs to either. If you're, you know, living the life and you want to do the private jet thing, that's not nearly enough. And if you're living a more modest life, which, you know, everybody is, then maybe that's too much. And so sort of you ground where you are and you begin to invest some amount out of every paycheck. And again, with an L-Avest, we tell you how much that is. You go through, you know, the onboarding flow and you say what your goals are. And we're like, okay, this is how much you need to, we know what your paycheck is.

This is how much you need to put in. You know, we'll invest it for you. And this is where we think it should come out. You know, that I think is a better approach as opposed to these rigid shaming rules. Yes. How can people get started with L-A-Vest? Come over and visit us at L-O-VS.com. You know, we are the only InvestTech and Wealth Management firm that's funded by, founded

by, built-by-built for investing in investing with women. We are a majority-owned by women. We help women invest to build their own wealth and also help them invest oftentimes in other women and for a positive impact. And we do that from her first dollar of investment through to we're helping women with multiple millions, fell with tens of millions of dollars as well, wanting to be there for her through her whole life.

So you can come over and visit us at L ofS.com. You can follow us on Instagram. You can follow me on LinkedIn. We have tons of education and really the only magazine and set of education that centers women because the financial realities are just different, whether we wish they were or not. They're just different. Incredible. Well, thank you again so much for coming on. Such an honor to talk to you. And I know

this is going to be so helpful for so many people. So thank you. Likewise. Thank you. Thank you. I hope you enjoyed that episode. And if you liked it, and if you liked the show in general, please take a second to rate review and subscribe. It goes a long way. And it's actually the best way to support the show. Also, if you want to see more about each episode, you can head over to the Blonde Files podcast on Instagram. You can go to Arialore.com. And I'm always posting about each episode over on my personal page at Arial Lori. Please note that this episode may contain paid endorsements and advertisements for products and services. Individuals on the show may have a direct or indirect financial interest in products or services referred to in this episode.