Ellevest CEO Sallie Krawcheck on the financial steps women should take now

Sallie Krawcheck, CEO and co-founder of Ellevest and author of Own It: The Power of Women at Work.

Slaven Vlasic | Getty Images Entertainment | Getty Images

Sallie Krawcheck knows what it’s like to be one of the few women in the room.

She ran the wealth management business of a large Wall Street firm, Merrill Lynch, before becoming co-founder and CEO of a venture-backed financial technology company — roles not traditionally filled by women.

Her company, Ellevest, focuses primarily on helping women invest.

Since its inception in 2014, the company has strived to build a client base of investors rather than traders. According to Krawcheck, the company has successfully done just that, with high recurring deposits and net inflows into its digital business every week this year.

Krawcheck admits the odds were great for the company to get where it is today. As other competitors have dropped, it has brought Ellevest closer to its goal of being the “#1 investment platform for women,” she said.

Krawcheck focuses on helping women do the exact same thing with their money — overcome the odds stacked against them — so they can achieve financial security.

CNBC.com recently spoke to Krawcheck about Ellevest’s history to date and how women can better build wealth.

(Editor’s note: This interview has been abridged and edited for clarity.)

Lorie Konish: You previously ran the wealth management business of a large Wall Street firm that was predominantly male, and then you founded this investment platform for women. What inspired you to do this?

Sallie Krawcheck: Shame on me if I hadn’t, given the experience I’ve had and my realization that women just don’t invest as much as men. It was dismissed as, “Oh, they just aren’t risk tolerant. They are risk averse.”

Not going out and at least trying to build something for women to help them close their gender investment gap, the gender wealth gap, to help them make more money, to help them live bigger lives, to help them Leaving jobs they hate, helping them leave relationships that are bad for them after working and running big platforms – shame on me if I hadn’t seen this issue, walked out and something like Ellevest would have built.

LK: What can Ellevest do differently for women than other investment platforms?

SK: We only started at the end of 2016, almost two years after we started. Thorough research was done into what would motivate them to invest and what was missing. And there were things that we discovered were needed. For example recognizing gender in our investment algorithm, maybe not for the reasons you think.

The reason is that she lives longer. She earns less. She takes more career breaks. Your salary peaks earlier. If you assume that she is average, you could assume that she makes too much money and dies earlier, which means she could run out of money.

LK: What surprised you about female investors when building the platform?

SK: You are not risk averse. They will, and should, take more risks than men in some cases because living longer gives them the opportunity to take greater risks. Women are risk conscious, so it’s about explaining to them what that risk actually means. “Am I pursuing my goal? I see the market just went down. Am I still pursuing my goal? If not, what do I have to do?”

On the Ellevest platform we show how people are pursuing them within the parameters of expectations, will they still reach their goal?

LK: Has the Covid-19 pandemic shed any light on these issues?

SK: Oh my god, in many ways – as did the election of Donald Trump, as did some of the moves in various states to restrict the right to vote. All of these things for women helped them realize that Prince Charming is probably not riding the white horse. Prince Charming is a government with social safety nets etc. Women have lost a lot of ground in the pandemic and so it’s hard to ignore at this stage.

LK: You spoke of a “she-cession” in the Covid-19 pandemic. are we still in

SK: There are months when things go better. More women have returned to work. But I think the impact is long-lasting, even for those women who were forced to retire and may have returned. You will never get those earnings back. You will never get back the compounding of those earnings. You will never get back the 401(k) and Social Security you didn’t pay.

wealth grows. Lack of wealth, debts are compounded too. Women haven’t invested as much as men, so they haven’t had the positive effect of compounding. And they had more debt than men, especially credit card debt and student loan debt, so they had the ill effects of that.

More from Empowered Investor:

Here are more articles on divorce, widowhood, income equality and other topics related to women’s investment habits and retirement needs.

LK: What steps can women take to recover?

SK: One step is to recognize all the negative messages she gets around money and not believe them. There is research that states that 72% of men’s money articles or money media are very positive. Growing abundance, trading, investing, bitcoin, meme stocks. It’s debatable whether it’s accurate, but it’s an abundance.

The messages to women are usually scarcity, whether it’s about budgeting and putting a dollar forward. Or it’s “don’t be so reckless”. It’s “if you can do just one coupon clip, you can break free of it.” While men feel empowered when it comes to money, women feel disempowered and feel scarcity and shame.

There is not an amount of money that women make that they are not ashamed of, that they are not ashamed of. You just have to refuse. And the old women don’t buy a house because they think that if they don’t they’ll make a more attractive marriage prospect. This is toxic, misogynist nonsense. And we have to reject that.

LK: A lot of advice for women talks about asking for a raise and starting investing. Where does it go beyond that?

SK: Absolutely everyone should ask for a raise. And if over time you don’t get the raise and you see people being promoted who represent the majority and not you, you might want to ask for another job. I realize this is coming from a privileged place, but if you’re able. From there, it’s a matter of paying off your high-interest debt, investing in your 401(k) to maintain the match if you have one, building an emergency fund, and then investing in a diversified investment portfolio with someone like your elders.

It doesn’t have to be more complicated. It doesn’t have to be your full-time hobby. If you do these things and set aside 20% of your net income to do it, time has shown that you can make it through the economic ups and downs that we typically see.

LK: How can the men in these women’s lives help them move forward?

SK: It’s funny because when we launched Ellevest, we were pushed back by the traditional industry. We got hate mail from some of my Wall Street friends. What has happened over time is that their daughters are starting to age into their first jobs, firstly they send me their resumes and secondly they’re like, “You know what? As I watch the expenses my daughter is facing, I recognize the need for an Ellevest. She comes home from work and says her boss promotes all the boys and invites them all to play golf. Looking through my daughter’s eyes, I see, “I see the money inequalities.”

It is important for fathers to know that their relationship with their daughter is certainly one of the most important ones in their lives. And there’s even research showing that this is where their confidence in business starts. So when she comes across this gender nonsense, she says, “Yeah, but my dad believes in me,” and that builds a lot of confidence.

LK: What advice do you have for younger investors who are just starting out?

SK: The best day to invest was yesterday. If you didn’t do it yesterday, today is the next best day to invest. I don’t think any of us properly conceptualize the power of compounding. It’s quite difficult to explain earning returns and then earning returns and then earning returns and earning returns after earning returns. If you can start investing even small amounts early and grow them through market ups and downs etc., you have been pleasantly surprised at the growth of that money in the past.

I think you just start with whatever you can and think of yourself as an investor. And you don’t have to put yourself under pressure. There’s something like, “Are you into Bitcoin? Are you into all of these things?” If you want, great, but that’s trading. And make sure that’s money to lose and see it that way. Going all in because you think you have to bet is not a good thing. You could have predicted that cars would take our streets and the world and still lose a lot of money betting because there were so many car companies and then so many of them went under. Anything the cops say could come true. You can still lose everything.

LK: A lot of people are on one side or the other when it comes to bitcoin and cryptocurrencies. Do you have an opinion?

SK: Can I be in the middle? The idea of ​​a global currency is tempting. For so long it was gold that has its limits. But which taste will prevail and how ubiquitous it will be, I don’t know. But there is definitely something to it.

https://www.cnbc.com/2022/05/11/ellevest-ceo-sallie-krawcheck-on-financial-steps-women-should-take-now.html Ellevest CEO Sallie Krawcheck on the financial steps women should take now

Gary B. Graves

World Time Todays is an automatic aggregator of the all world’s media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials, please contact us by email – admin@worldtimetodays.com. The content will be deleted within 24 hours.

Related Articles

Back to top button