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Ellevest CEO Sallie Krawcheck Wants To Close The Gender Investing Gap

Each month, Bumble Bizz taps an influential entrepreneur to have a private conversation with a user looking for advice. So far, we’ve heard from luminaries including Wharton professor and management expert Adam Grant and Reshma Saujani, founder and CEO of nonprofit Girls Who Code. This month, Bumble Bizz spoke with Sallie Krawcheck, a former Wall Street leader and now the CEO of Ellevest, an investing platform for women. Sallie wants to help close the gender investing gap and help women unleash their financial power.

Stay tuned to the Let’s Talk Bizzness series to see who’s offering their valuable time and knowledge next.

Bumble Bizz: You had a long, successful career on Wall Street, where you were one of the most senior women. How did your experiences in that world lead you to found Ellevest?

Sallie: It was a mascara moment. I’d been working in the financial services industry for more than 20 years at the time, as CEO of Merrill Lynch Wealth Management and Smith Barney. But that morning, I was putting on my mascara and I just had that “a-ha!”

I knew that, as a country, we’re undersaving for retirement by trillions of dollars. It’s a big deal. And in between mascara layers one and two, what hit me is that it’s really a women’s crisis. That’s because women live 6-8 years longer than men, and we retire with ⅔ the money that men have. It’s really our problem.

That’s in part because we’re paid less, and we take more career breaks. It’s also because the “by men, for men” investing industry just hasn’t worked very well for women. And that has cost us the money to plan our futures and live the lives we want. 

B: Why do you think the gender investing gap exists? Is it connected to the gender pay gap?

S: In part. The gender pay gap absolutely plays into the gender investing gap: If you make less money, you have to put more of each paycheck to the bills, and you have less to invest. 

But women also invest less of the money we do have. Women hold 71% of their money in cash, while men invest more of it. And that cash can cost you, big-time. We calculate that cost at about $100 a day for some women. $100. A. DAY.*

B: What’s your “investing 101” advice for women who have never previously considered investing, or might be confused by various options?

S: My advice? You don’t need an “investing 101” course. Seriously. Here’s all you need to know to get started:

  1. First things first: pay off any high-interest debt (like credit card debt) first. Then build an emergency fund. Now it’s time to invest. 
  2. Start investing now. Start with what you have, but start as soon as you can. And make it a habit. 
  3. When you invest, work with a fiduciary. That’s someone who is obligated to put their clients best interests ahead of their own. Kind of important.
  4. Diversify. Invest in a mix of different types of securities. Investing in a single thing, even if it’s “hot”? Bad idea. (Helloooo, Bitcoin.)
  5. Keep your costs and fees low. We usually advise investing in low-cost exchange-traded funds, aka ETFs.

B: What about advice from the trenches for women working in finance or other largely male-led industries seeking to get ahead? Is there any wisdom you learned on the job on how to prosper in a world not designed with women in mind?

S: The research tells us that we women have too many mentors and not enough sponsors. Mentor = someone to answer your questions. Sponsor = the senior person advocating for you when you’re not in the room. You need the person in your corner in that room where they’re making decisions. So get to know people across teams in your company, show them who you are and what you do. Chances are you’ll find a sponsor along the way.

B: If you could dispel any stereotype or misinformation on investing for our audience of millennial women, what would it be?

That it’s all about picking individual stocks to try to “outsmart” the market every year. It’s so not. In fact, that rarely works (as in “just 0.1% of “active managers” actually outperform over a five-year period” rarely works.) It’s about having a diversified investment portfolio, thereby giving yourself the opportunity to earn returns and have compounding take effect — and help you hit your longer-term money goals, like retiring in full badass-grandma style, saving up for a splurge vacation, or buying that dream home. And the sooner you start, the more of that opportunity you’ll have.


*We compare the wealth outcomes for a woman who begins investing at age 30 with one who began investing at age 35 and another who began investing at age 40 after having saved in a bank for 5 and 10 years, respectively. All women began with an $85,000 salary at age 30 and all salaries were projected using a women-specific salary curve from Morningstar Investment Management LLC, a registered investment adviser and subsidiary of Morningstar, Inc., which includes the impact of inflation. We assume all women save 20% of salary each year. The bank account yields a 1% average annual cash return and a 17% tax rate on the interest earned, with no account fees. The investment account assumes an investment with Ellevest using a low-cost diversified portfolio of ETFs beginning at 91% equity and gradually becoming more conservative during the last 20 years, settling at 56% equity by the end of the 40 year horizon. These results are determined using a Monte Carlo simulation—a forward looking, computer-based calculation in which we run portfolios and savings rates through hundreds of different economic scenarios to determine a range of possible outcomes. The results reflect a 70% likelihood of achieving the amounts shown or better, and include the impact of Ellevest fees, inflation, and taxes on interest and realized capital gains. The results presented are hypothetical, and do not reflect actual investment results, the performance of any Ellevest product, or any account of any Ellevest client, which may vary materially from the results portrayed for various reasons. We divided the calculated cost of waiting 10 years to invest, $337,657, by 3,650 (the number of days in 10 years). The resulting cost per day is about $92.50.

The results presented are hypothetical, and do not reflect actual investment results, the performance of any Ellevest product, or any account of any Ellevest client, which may vary materially from the results portrayed for various reasons.

Investing entails risk including the possible loss of principal and there is no assurance that the investment will provide positive performance over any period of time.

Diversification does not ensure a profit or protect against a loss in a declining market. There is no guarantee that any particular asset allocation or mix of funds will meet your investment objectives or provide you with a given level of income.

Forecasts or projections of investment outcomes in investment plans are estimates only, based upon numerous assumptions about future capital markets returns and economic factors. As estimates, they are imprecise and hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results.

The practice of investing a fixed dollar amount on a regular basis does not ensure a profit and does not protect against loss in declining markets. It involves continuous investing regardless of fluctuating price levels. Investors should consider their ability to continue investing through periods of fluctuating market conditions