In recognition of Women’s History Month, The Sunday Paper has been honoring incredible women who are using their voices, their hearts and their minds to Move Humanity Forward.
This week, we honor Sallie Krawcheck as our Architects of Change of the Week. Sally is the CEO and co-founder of Ellevest, a web platform that offers investing tools specifically tailored for women. A former Wallstreet titan and one of Fast Company’s “Most Creative People in Business,” Sallie is taking on the taboo subject of money and working to transform women’s relationship with it so that they can earn more over our lifetime.
1. What’s the biggest challenge that you think women face when it comes to investing and their relationship with money?
Investing may be the last area of women’s lives that feels more 1957 than 2017: financial advisors are 86% male, the industry language is one of war and sports analogies (“pick a winner,” “outperform”), investing tv sounds like ESPN, and the industry symbol is a bull. (Doesn’t get much more male than a bull.) As a result, women report that investing feels out of reach for them and so we don’t invest as much as men do.
So our challenge, and opportunity, is to get ourselves investing to a greater degree. It doesn’t have to be so complicated: pick an investing firm that is a fiduciary; invest in a low-cost diversified investment portfolio; make investing a habit (something out of every paycheck); and consider tilting the portfolio to a riskier stance when you’re younger and / or have longer-term goals and to a less risky stance when you’re older and / or have shorter-term goals.
2. Why are we uniquely positioned to succeed at investing?
When women invest, the research indicates, we are better investors than men and earn better returns. That’s because we tend to take a longer-term view and don’t over-trade. We tend to be more risk-aware, which is a good thing. And we tend to be not as focused on making more money for money’s sake, but instead on establishing and then reaching our financial goals.
3. You’re the author of the new book “Own It: The Power of Women at Work.” What does “owning it” mean to you?
It means recognizing the great qualities we women bring to the workforce (think risk-awareness, relationship orientation, long-term perspective, drive for meaning and purpose, to name a few). And it’s recognizing that these qualities already drive strong company performance — and that will only increase as business rapidly changes. It’s introducing the “courageous conversations” at work about how our companies engage with us (everything from calling out gender biases to calling for fair parental leave policies).
It can also be starting our own businesses; the #1 reason women start their own businesses are to build the companies at which they want to work. Oh, and it’s owning our failures to (we women tend to take failure harder than men), because in a rapidly changing business environment, we’ll all fail more.
And it’s also about making sure we’re in financial control, so that we can have full, engaging careers. (That’s why I call investing “the best career advice women aren’t getting” — because giving yourself the opportunity to earn higher returns through investing means we can have greater career freedom.)
4. What is one of the biggest lessons you learned as a woman on Wall Street?
Success is not final and failure is not fatal. In a career on Wall Street, or as an entrepreneur, you’re likely to experience both. Many times.
Oh, and the power of compounding. Albert Einstein is reported to have called it the eighth wonder of the world because it gives your money the opportunity to grow.
5. How do you feel that Ellevest will help move humanity forward?
I have become convinced that getting more money into the hands of women is a universal positive. We see this in developing markets; and we see it in the US. It’s good for the women themselves, for their families (and particularly their daughters), for the economy and for society. Gender money gaps still exist; and until women are financially equal with men, we will not be fully equal with men. One of those gender gaps (which has historically cost women tens of thousands, hundreds of thousands of dollars– or more — over their lifetimes) is the gender investing gap. Ellevest’s mission is to close it.
And if not for you, then do it for our daughters. We need them to see us investing, and in control of their money, so that they are financially equal with the men in their lives when they grow up.