Financial guru Sallie Krawcheck’s mission is to help women reach their financial and professional goals, to get more money into the hands of women to unleash a positive ripple effect for our families, our communities and our economy.
Sallie is the CEO and co-founder of Ellevest, a digital-first, mission-driven investment platform for women, listed on CNBC’s top 50 “Disruptor” list, LinkedIn’s 50 “Most Sought-After Startups,” and one of Entrepreneur Magazine’s Top 100 Brilliant Ideas.
Sallie is also Chair of Ellevate Network, a global professional women’s network with 135K+ members, and the best-selling author of “Own It: The Power of Women at Work.”
Her Wall Street career included becoming the CEO of Merrill Lynch, Smith Barney, US Trust, Citi Private Bank, Sanford C. Bernstein, and CFO for Citigroup.
She spoke at Ellevate Network Orange Country’s Anniversary event in early 2020, which I had the pleasure of attending with a few of my fellow Ellevate Network San Diego chapter leaders.
Judith Lukomski, Chief Evolution Officer at TTi and Chapter President of Ellevate OC, started the evening with a story about how seeing Sallie speak five years ago inspired her and another audience member to start an OC chapter of Ellevate Network.
“There’s a passion that I have for seeing women in leadership, closing the gender achievement gap, and closing the pay gap. Because when women thrive, communities thrive,” she said.
Judith spoke about the progress of generations of women, from when her grandmother immigrated here and couldn’t vote so then she became a suffragette. Only 50 years ago her mother couldn’t get a line of credit because she didn’t have a male cosigner. Judith said it wasn’t until the 1960s when women started to have access to the same jobs, jobs that were illegal for women to previously hold. For example, women were prohibited from being lawyers up until 1970. The Lilly Ledbetter Fair Pay Act wasn’t passed until a decade ago and we’re still fighting to close the gender pay gap, which is 20% nationally for white women and up to 62% for women of color.
Judith spoke about the recent meeting of the World Economic Forum which concluded that global gender parity wouldn’t happen for 202 years.
“That is too long to wait,” she said.
“There are a couple of things that we can do right away. And the first thing that we can do is start to hardwire gender parity into what we do. And that’s number one.
Number two is advance more women into management leadership positions. Does that sound hauntingly familiar? Like why we’re all here? Let’s make that pipeline work.
Close the gender gap in remuneration and my personal favorite: investing.
And number four, increasing women’s participation in the workforce.
So with all of that, we can have an impact right here right now. And that’s the beauty of this group coming together,” Judith said.
Judith then introduced a few other team members to speak, and then introduced Sallie. The moderator questions appear in bold below.
When you look back at your career, what would you tell your 30-year-old self and what will you tell your 70-year-old self?
Sallie said, “I feel like I’m supposed to say, I would tell my 30-year-old self, ‘Keep at it, girl, you got this, give me a hug, it’s going to be okay, work hard, lean in, know your worth, ask for that raise’….[groans].
I think the narrative that we tend to construct around women who’ve been successful is their ownership of that success. ‘How did you do it? How did you get ahead? What were your tricks?’ There’s a lot of ink that has been spilled on that topic.
I would say to this group of women, speaking to each other frankly: there’s a lot of luck.
And what I would also tell myself is: you’re going to be super lucky.
Yeah, I got fired twice publicly. It was sort of a bummer. I did keep going…When I look at myself versus my business school peers, a group of about 10 of us, now I’m the only one who’s still working. I look back and say, was I smarter than them? No. Did I work harder than them? Some of them, but some of them not. Did I take more smart risks than they did? Some of them, some of them not.
I think what’s important to acknowledge in this day and age, is that what really sets us apart is I never worked for Les Moonves.
And it’s funny but it’s not funny, right? I never ran across a Harvey Weinstein.
I never got caught in middle management, working for a Todd.
What’s a Todd? Todd is a man or a woman, a person of any gender, who’s just a nice guy. He went to unconscious bias training, he’s got a daughter, he talks the talk, everybody wants him on the foursome. But he just never promotes anybody except for junior Todds.
And the problem is, it tends to take us years to figure it out because we never get that message in our society. And two, it’s probably just two people, Steve and Joe [who get those promotions]. So 5-7 years in [to your job] you think maybe it’s not me, maybe it’s him.
In society today, our being successful has been too much about luck, whether we work for people who fought for us and whether we got ourselves out of the bad situation. I just don’t think we talk about that often enough.
So to my 30-year-old self, [I’d say], you’re going to have all that stuff, you’re going to have grit, you’re gonna have determination, but you should also recognize you’re going to be lucky, which means you’ve got to pay it back.
It means that even though you defined yourself for most of your career as a guy’s gal…I got bullied in middle school, I didn’t particularly understand women, I don’t get groups of women. I’m actually very shy. I wasn’t socialized that way. But then when I got to a certain age and realized all my luck and good fortune, and recognized the power disparity driven by the money disparity between the genders, I realized I had the means to try to make some dent in fixing this. I just had to do it.
So I hope when I’m 70, and I’ll be like: get back up there.”
I hope you’ll expand on this, the aspect of resilience when you hit a barrier, how do you rebound? What were the tricks that you used?
Sallie said, “I’ve sort of carried two major emotions in my head simultaneously all the time.
One of them is, I am so angry.
I cannot believe we’re still here.
I cannot believe my daughter started her first job out of college and that the environment is what it still is. I can’t believe it.
I cannot believe the amount of harassment that was going on that I didn’t recognize.
By the way, the research is clear that women who have not been harassed underestimate how widespread it is in the workforce. I was in senior-level positions at places where this was happening and it wasn’t being reported. I am so angry about it. I know women aren’t supposed to be angry, it’s not ladylike, but I’m to the point where it motivates me [to do something about it].
I mean, I love men. I’ve been married to a couple of men. But if they were going to do something, they would have done it. If the next piece of research about the power of diversity was going to turn this around, it would have already done it. And so I’ve got to do something.
We are driven by, ‘how can we as leaders do something?’ So I’m driven by an anger.
And I’m driven by a deep sense of gratitude. Like, can you believe how cool this is? Honestly, that we have had the privilege and good fortune that we’ve had, which is pure dumb luck, that I’m sitting here.
The fact that I’m sitting here is less about what I did, and frankly more about the fact that I was born to my parents in this era, who invested in my education. I had a stable family life. So I had a strong foundation. I had good bosses who weren’t Todds. It’s that.
So recognizing that we’re playing with house money, that’s the tough thing. ‘Oh, Sallie, you got tossed out of Citi for trying to do the right thing. What a bummer.’ My kids weren’t going to go hungry. We weren’t gonna lose our home.
And so that deep sense of, ‘How cool is this? How lucky are we? How fortunate are we?’
And I get to wake up tomorrow with my good fortune and be angry again. This is amazing.”
I believe we can use that anger to create change, and you’re creating a wave of change, you’re creating a platform of change.
Sallie said, “I have a very talented team who has fun and loves what we do.
The great thing about being involved in Ellevate and Ellevest, getting more money in the hands of women, is we can have this very broad-based discussion and conversation. We operate with real latitude. Part of what we are trying to do, not only at Ellevest where we’re running a successful business with that venture capital money invested in the company. But we recognize that we also need to change the underlying narrative.
I’ve got about 6 money lies we’re told as women. There are two that I’ll share tonight.
One of the money lies that plays right into the work of Ellevate is, ‘You got this, girl. Go get the raise like this, buy this book, dog-ear it, underline it, yellow it, know your worth, take the seat at the table, ask for the raise this way, no, no, that way, be aggressive, don’t be too aggressive, cry at work, don’t cry at work, bring your full self to work, no never cry at work…’ I mean, what?
Men promote each other, throw each other business, put each other on boards, talk each other up, fund each other’s projects. And we as women, on the contrary, when we have worked in big companies, and we’ve looked at the board, and we see there’s one woman on the board and there’s one woman in the leadership team. We have taken sort of a calculation and said if there’s only one woman then I’m not competing with him or him or him, I’m competing with that one woman [for what seems like only one space for a woman].
Instead of collaborating, we’re socialized to compete [against other women].
We’ve been given a message that success is an individual sport, and it hasn’t worked.
So remember what we knew in high school and in college, which is traveling in packs.
We didn’t go to the ladies’ room by ourselves for eight years.
But when I got into the business world it was me as an individual.
So I think that is one lie we’re implicitly told, is ‘You got this, girl.’ Uh-uh. We’ve got this.
In fact it’s worse than that, we’ve been penalized for promoting other women, that’s what the research shows.
So we need to break through that, fund each other, support each other. Networking is the number one unwritten rule of success in business. For men to be successful, typically it’s a broad, diverse network in which they are active. For women it’s that, and it’s a squad. A group of women to whom you’re close, who you can lean on.”
Sallie said, “The second money lie is for much of our lives we essentially hear that men are better at money. Money is for men.
Today in the U.S. household, we still give different money messages to our sons or daughters.
For sons, it’s become a CEO, earn a lot of money, grow, go to the top of the jungle gym.
For girls, it’s budget, coupon-clip, etc.
For boys it’s abundance and for girls it’s scarcity.
When we grow up, and the male money media: CNBC, Barrons, Crains, Bloomberg, Alpha, Grow, Invest…There is no female money media.
And when [that male money media has] articles about money for women, it’s ‘financial planning doesn’t have to be very, very hard.’ Or ‘don’t buy the latte, invest in the market instead.’ On no planet does that math work.
‘Take this money quiz, are you a Carrie or Miranda when it comes to money?’ [said mockingly]
The representation of women in the media [is a problem]. Carrie Bradshaw, the savviest woman in TV history, is shown to have bought too many shoes so she couldn’t afford to buy her apartment.
So still today, we as women have that sense of money is for men. When you talk to a man about money, the words that come into his mind are power, strength, and independence. For women, it is loneliness, isolation, and uncertainly.
As a result, there’s no amount of money we make that we don’t feel embarrassed about. We make too much and [we think that] our friend is going to feel bad. Make too little, [then we think about] our student loan debt and I should be achieving more and I’m not where I should be.
So we prefer to talk about literally any topic than money. Certainly sex. Also our own death. We would rather have a conversation about us dying than how much money we make. How crazy is that?
What it’s done is it’s kept us from the money.
And we just say, ‘Oh, I’m not good at math. I’m not gonna invest. I need more financial education. This is for him.’
I’d love to say that the guys got together 150 years ago, which I don’t think they did, but I’m not sure… [and they said] how do we keep women from having full power, how do we put them in a position where #TimesUp and #MeToo have to happen. Oh, I got it. Let’s make money a source of shame. Let’s make it actually attractive in 2020 for females to be bad with money. That’s a good idea. Let’s do that. Because if we do that, how are they going to know what kind of raise to ask for if they’re not talking about money — they won’t.’
Therefore in the research we’ve done on the gender pay gap, everybody knows it exists, but nobody thinks they suffer from it.
And so if you can’t talk about money, you won’t know it’s you [suffering from the gap].
[Continuing that imaginary conversation of men 150 years ago]…’Oh, here’s a good one. Because of what we made women think about money, they won’t go into the money industries. They won’t go on Wall Street, they won’t go into venture capital. 95% of venture capital decision-makers will be men. So women only get 2% of the money, even though they’re startups outperform men’s.’
‘I’ve got it, over on Wall Street, let’s make 86% of financial advisors men and 98% of mutual fund dollars will be managed by men. Even though women are better money managers. Then women won’t invest as much. The gender investing gap will cost them a million dollars over the course of their lives, ha, then they can’t afford to leave their job. They can’t afford to leave the relationships that don’t work for them. When we tell them, will you give me a little twirl, they will feel like they have to twirl.’
I know there’s not one of us who believes we would be in this #TimesUp and #MeToo moment, if we had not bought into the money lies that are our society’s given us.”
Women invest with their values, and the financial industry seems to be changing. I would love to hear you speak around impact investing, investing in your values, and how can we do that intentionally.
Sallie said “At Ellevest we have something called Intentional Impact Portfolios. So I do hope the industry is changing.
As of a couple of years ago, there was a huge mismatch between what women are looking for as part of investing and what the industry was providing. And it isn’t just that we are not reflected in that industry. This is an industry, that I ran, that two decades ago had to pay multi 10s of millions of dollars fines for discrimination and had to put aside 10s of millions of dollars to make their businesses more diverse and they did not. And so we’ve still got this deal where the vast majority of the industry does not look like us.
One part of it is that as of a couple of years ago something like 86% of women say they’re interested in learning about impact investing. Just 8% of financial advisors had ever discussed the topic with them and oftentimes it was to tell them, don’t bother, you have to give up on your return.
It is no surprise that businesses I used to run, in the year after their husband’s death, women leave their joint financial advisor at a rate of 80-90%.
These are wealthy women. These are women with a million-plus in assets. It’s really why when I founded Ellevest, first it was just going to be a digital offering. In an industry that has been exclusive, I wanted it to be inclusive, I want no investing minimum. I want young women to be able to invest from their first dollar or penny. That’s what we’re going to do.
But then I had women come to me and say, ‘Sallie, you ran these [big] businesses, [could Ellevest] have a high net worth business or private wealth business?’
I said, no, we’re good.
Then I heard one of them say, ‘I’m tired of supporting institutions and companies that haven’t supported me, and I’m tired of having my money manager at the company I wouldn’t let my daughter work at.’
And I’m like, oh, we’re done. So I hired people like Ashley and Alison [in the audience] from top firms and said we are going to have a private wealth offering, and it’s going to be for those who are interested around impact and what we call intentional investing.
Now, let me just throw something out there. You do not have to give up return in order to invest for impact.
You do not have to give up a return in order to invest for impact. [repeated] You just don’t.
You did a handful of years ago, but not any longer.
Your money is your power. What do you want it to support?
For us, at Ellevest, one of the things we wanted to support was women. Not surprisingly.
I was involved with the Pax Elevate Global Women’s Leadership Fund, which is a terrific job. It’s all based on investing in companies where the boards are a certain percent of women and the management team has a certain percentage of women. What we’ve done with intentional impact investing is you use that as the foundation. Then use technology data sources, etc. and really expand out what it means to put women first.
It is putting more women on the board. It’s also avoiding companies that are harming the environment. Why? Because that disproportionately impacts women.
It’s also pulling money out of companies that have online privacy issues, which disproportionately impact women and the LGBTQIA community.
It is keeping our money [away] from companies with product safety issues, which disproportionately affect women. I could go on.
But at the end of the day, if you put women first with your investments and with your money, you put people first. You put our families first. And so it’s really important to me.
By the way, I’m all about investing in women these days. I actually had my own investment portfolio diagnosed with our tool and found out 45% of my investments were in companies that I don’t want to support.
And so we’re providing these capabilities, where you don’t give up the sharpness, the smartness, any of it, but using our money for good.
Everyone says we want to empower women. Fine. We’ve got the friggin power.
Actually, we control $7 trillion dollars of investable assets with our spouses. It’s not enough, the guys have more, but you can do a lot with $7 trillion.
So making this available to us so we can use the power we’ve got could change the world for a good way.”
At this time of our lives, there’s a thing called the generational transfer of wealth and it’d be really interesting to hear you speak to that because you said women are taking ownership of family wealth.
Sallie said, “Yes, all that is happening. It’s a little early to see those changes.
What’s interesting at Ellevest, we get asked what our average client is like. And Ellevest is one of the fastest-growing digital-first investment platforms. We have now well past half a billion in assets under management. We’ve been growing double-digit percent month over month. All this, by the way, while the entire industry is like, ‘Oh that’s cute. Investing for women. Adorable.’ And that was just the women who said it. In fact, when we launched, many of you probably have the idea that this is really not a smart idea. That women don’t need this.
Well, in fact, you know the gender investing gap is telling us that we do. And then what we suffered, when we launched is a double-digit percent, it was like 40% of women said when they saw us [said the idea of an investment platform just for women] ‘is offensive. It’s sexist. We don’t need some dumbed-down remedial financial education.’
That was the reaction by double-digit percent of women because we’ve been socialized this way. Not one woman said that because it’s for women, it must be better. Not one.
And then when women went in and saw this is actually a sophisticated investing algorithm, the only one that takes into account that women live longer and their salary peaks sooner, thought, ‘Hold on. Wait, this is actually the most highly personalized investment portfolios by goal out there.’
But we had to fight through the fact that we women have been told we’re not good with money, we’re not good at investing, and ‘for women’ is inferior, in order to become this rapidly growing business.
What we’re seeing at Ellevest which is interesting is the message is resonating not with an age group, in fact, we’ve got clients from 18 to 87. It’s typically women and our allies, who have agency over their money.
Where we seem to be resonating most strongly are women in their 20s, who are like, ‘I saw what happened to my mom or my older sister or my aunt. They didn’t have the flexibility, didn’t live their fullest life. Hell no. That’s not happening to me.’
And women in their 50s, who were like me, I mean, obviously not me I’m in my 30’s [jokingly] but I see what you older, more mature women are like, ‘No, I’m just not [interested in traditional male investing].’
So we’re really seeing this demand for it and open across the board in a way that just blows me away.
Why we’re doing all of this is important. Money is the number one source of stress.
For all the talk in this country of emotional wellness, spiritual wellness, physical wellness, if you don’t have financial wellness it will eat at those other things.
The act of saving and investing is women’s number one driver in confidence in our future.
So we’re operating right here at the core and I hope we’re beginning to have some traction.”
One of the questions that came up was how do you define a good partnership? What are the things that you look for?
Sallie said, “So we start with our investors. Raising money, I don’t wish it on my worst enemy. Maybe my ex-husband, but not my worst enemy.
It’s grueling, it is uncertain, it’s difficult, the sexism we talked about, and the ageism…
On the one hand, I can get to them. I can find my way to people. I can get in the room. But when I’m in the room, nobody in there is like, ‘I’m a venture capitalist and the entrepreneur I really want to invest in is a 55-year-old white woman who’s been successful on Wall Street.’ Yeah, that’s gonna replace the hoodie-wearing Stanford graduate. No, it’s not.
And so, the ageism is not something we talk about very much. So it’s tough.
I don’t know how those two things offset each other, on the one hand, I get in the room but on the other hand, when I’m in the room you can just feel them write you off right away.
We got the money raised, we’ve raised like $77 million dollars for Ellevest. What I tried to do before every raise was think if I could have any investor who would I want? Rather than schlep from Sand Hill Road firm to firm, though I’ve done my share of that. I’ll be honest with you.
When we did our Series A, I was asking myself that question before I went to sleep and I woke up at three o’clock in the morning and thought, ‘Penny Pritzker, former Secretary of Commerce, she knows about building businesses.’ I was actually in her office two days later, saying that.
Melinda Gates, I’ve been hounding that woman since the beginning of time, Pivotal invested [in Ellevest] before their billion-dollar announcement.
When we approach corporates, my rule of thumb is they have to publicly disclose the gender pay gap. So Salesforce is an investor, Paypal is an investor, Mastercard…we’ve really gotten some great investors.
But I have to tell you, you don’t know how long a night can be until you’re raising money and in comes the offer of money from someone who is not mission-aligned. Who’s saying they want to take the whole round, let’s go.
And you’re like, ‘Oh my gosh’ because you want the money. You want to live to fight another day, and it’s bird in the hand and two in the bush and we never know when. These raises are horrible, every one of our raises has been terrible up until the moment it’s been oversubscribed.
I don’t know why anybody would want to be an entrepreneur. It is really awful.”
Judith said, “There are good things, there are some good things.”
Sallie said, “Maybe. My stepson’s partner, she is a working mom and she’s dying to be an entrepreneur. So I told her, OK, here’s the way you gotta raise money, if you’re doing venture capital, but you can’t raise money to get a great team you can’t get a great team until you raise money. You make one wrong hire in the early days and you are done. You make one big wrong product, and you’re done, you run out of money. Yes, fail fast, all that stuff, but besides my friend Julie Wainwright at The Real Real, you’re not seeing women who are allowed to fail several times.
It’s starting something from dirt. In order for a new product, a startup product, to take off it needs to be 10 times better than what’s out there. Think about the stickiness.
I’ve talked to feminists. I was at a dinner with a flat out feminist. And she’s with Ken Fisher’s asset management company. This guy, one of the largest asset managers in the country, got up on the stage, and talked about winning business like getting into a girl’s pants… And I’m sitting next to the woman and she’s like, ‘well, but the performance has been good.’ I’m like, ‘Actually no, it hasn’t been. It hasn’t been.’ She said, ‘Well, he apologized.’ You’re an active feminist, it’s just the inertia. And so this guy makes these comments, and he has more assets under management today than he did when he made the comment a few months ago.
So the inertia. It’s like after this [event when you think] I’m gonna move my money to Ellevest. A week’s gonna go by. In two weeks, you think, ‘I really should get around to that.’
In the building of a business, the inertia, overcoming it is just such a tough thing to do. So if you ever want to become an entrepreneur CEO just come talk to me, I’ll talk you out of it.”
Judith said, “I can fully appreciate that and I would also say that this is the opportunity for women to stand together, and to remind each other because just what you described. It’s not OK to leave your investment with a company that is so out of line with your values.”
You talked about a money mindset for women. I’m curious about other mindset or skill that you need to really see?
Sallie said, “I hate to answer this question because I don’t think there’s anything wrong with you… [Sallie talks about the general advice given to women over and over about money, including advice she’s given in the past]…And I’m just sort of over it.
I want to build a company where people can cry, where you can really bring your full self to work. Where we’re not being told to contort and change. The problem is not us. We all got A’s in school. We did. We know how to do the work. Where we didn’t learn as much is in networking. Therefore Ellevate Network and coming together, etc.
But it’s not that our work isn’t excellent. It’s that the system doesn’t work for us.
I’m hopeful companies will change, I want more Marc Benioffs…at the same time, I’m hopeful that with the cost of starting businesses coming down so much…that we do build cultures that are the companies where we want to work, where we really do you feel like we can be ourselves as opposed to having to change ourselves in some way that’s unnatural.
I worked on Wall Street for forever. And absolutely women don’t cry. But nobody ever told men, ‘don’t get mad at work.’ Nobody told them not to be their true authentic selves. And so we need more workplaces where we have that level of comfort.”
How do you determine which factors to use in impact investing?
Sallie said, “Nobody’s perfect. Data sources aren’t, either.
For me, it was having a diverse board and who I would rather have my money. Historically, [for me it mattered to put money] in a company with a diverse board, as opposed to a company that was helping the environment. [There are other parts of the company that are not ideal, that I don’t like] But I’m also married to someone who I don’t love every part of him, either.”
Sallie talked about using the more data sources, the better, and how we sort of already know the companies to avoid who are dangerous to our lives, who hurt the environment, who affect data privacy. “Technology is enabling us to bring it all in and be able to rank through an algorithm, those things that are most important to you,” she said.
She talked about the work her team was doing highly customizing these portfolios, having people really have a personal mission statement, and then having their investments aligned with it.
“What I would say is whatever you’re dealing with your mind has an impact today. Whether you know it or not. And the moment for me was, after one of these school shootings, that Ellevest was the only investment firm out there that put out for everybody to see, in our newsletters on our site, the maximum percent of your investment portfolio that could be in gun manufacturers. It was something like .02 percent. We’re the only ones who did,” she said.
Sallie had one woman ask if she could go below .02 percent and in the ETFs, the building blocks for our portfolios, she was not about to get below point 02 percent. The woman replied that she would move out of Ellevest because that is too much for her and Sallie said she understood and asked what is she going to do with the money instead. The woman said she’d put it in her bank…a bank which Sallie knows is the number one lender to the gun manufacturers, and that is what they use their [customers’] deposits for. It was an eye-opening moment, she said.
“Everything I’m doing with my money has impact. So today, if we’re not investing positively with our money, and we may be investing negatively, and it may be in things {we don’t support[. There’s a classic story. Talking to Melinda Gates, I love it when I say that, Bill Gates was anti-impact investing. [He thought it was better] when you invest for the highest returns and give the money away later, [such as] when they’re in Africa cleaning up a river in their foundation. And then later find out they’re the biggest owner of in a company that is polluting Africa’s rivers…And that’s why we all need to be there,” she said.
Judith said, “You bring up a really good point and I think it’s also an opportunity to talk about where you spend your money, because that impacts.”
Sallie said, “Everything you do with your money, where you invest it, where you spend it, where you save it.
I am sick and tired of having my money supporting institutions and companies that don’t support me.
I’m really looking for women-, minority-, people-of-color-owned businesses that I can support with my money. It just matters to me.
We have an investment advisor, an investment committee that works on it. We work with outside managers, we use data sources. We still keep the broad diversification, because what we’re not about, what I don’t believe in, is stock picking. Those tapes on CNBC, screaming at each other, buying low selling high.
The percent of active managers who consistently outperform the S&P 500 over a five-year basis, and trading stocks, is 0.1%
I’m just not cocky enough to think that we or anybody I know is smart enough to outperform the entire market.
All of the traders. All of the portfolio managers, all of the analysts consistently. I mean, we’re smart. We’re not that smart, and so is nobody else except for one: Warren Buffett. If you’re financial advisor Jeff was so much better than the market then we would know the name Jeff. Jeff, if you’re so good at this, why aren’t you Warren Buffett?
…Now we’ve internalized all of it, that women are inferior in the market with money, you are my competition, if you do well that somehow reflects badly on me,” Sallie said. She spoke about how sisters who worked full-time and really struggled with what each of their decisions said about the other, and they got to a place where they actually say nothing about the other than her choices are different from my choices.”
Sallie also had been thinking about word choices women use.
“I was on a podcast the other day with a delightful woman. Very Midwestern, very nice, and sweet and kind. And then I almost had to attack her.
Because we were talking about the money gaps and the pay gap [near] Equal Pay Day…she was saying to her that the gender pay gap really takes off when a woman has her first baby… Then she wanted to talk about really the ‘choices that we women make when we have that baby, it means we earn less.’ And I can just feel my blood pressure starting to rise. And I said, ‘We need to be very careful about the framing of that word choices, because when we use the word choices, and the woman doesn’t make as much money going in doesn’t have a choice to stay home with their child, or they have no paid parental leave and they have to go back to work two days after the child was born…For those of us who’ve had kids, we all know, that is not the time you want to be going back. Is it not a choice.
As everybody in this room knows, we are the richest country in history of the world and the only one without mandated paid parental leave. We are not talking about this nearly enough. It is not a choice.
When that kid has developmental issues or goes through a rough patch, and you feel like someone needs to be home. And because of what our society has dictated to us and told our husband, if we’re in a relationship with a male, [that staying home with kids is not] masculine.
When we are so damn exhausted, that we are working for Todd, no man works for Todd, we’re not getting the promotion, we’re doing two times the childcare three times the housework, is that a choice when you finally say, uncle?
This doesn’t make sense. Is that a choice? We don’t have safe and affordable childcare, is leaving the workforce the choice? And it’s the little things that add up over all the years. I was talking about the 15 minutes a day hair and makeup that we’re all required to do, is that a choice? Well no, it’s not a choice. If you know how much it adds up to 15 minutes a day, an hour and 15 minutes a week, five hours a month, 60 friggin hours a year, one full work week a year and I haven’t even shaved my legs yet.
Is it a choice when we leave the workforce, after all that, when the research tells us that the bar is higher for us, that we have to be better? And this is not my opinion, this is not what I observed, this is research. That white men are promoted based on potential, and women and people of color are promoted based on achievement. Those are not choices, that is an uneven and unfair playing field.
And so I think we have to be really careful when we frame this for ourselves. Are there things that are not choices that we’re forced into by our society?”
What are your next choices, your next goals going to be?
Sallie said, “I don’t know. I’m just so tired. I’m just trying to build a successful business and change the narrative.
I’m trying to do with all my heart, because I’ve been so privileged. I’ve seen in my research, and I’m trying to learn every day. The stuff I thought five years ago is not what I think today.
And I’m just tired of waiting on it and so I’m trying to solve this simultaneous equation.
I’m now an empty nester which is not as bad as I thought it would be, it’s really sort of nice. I’ve been married to my husband since the beginning of time so I’m alright [always being] on a plane, to try to amplify the message and get validation.
If we can just get one young woman to invest at the age of 22, as opposed to the age of 32… because here’s something else. So I do want to share one thing that I think really matters. And you’re going to see us write about this so when we come up to Equal Pay Day, it’s going to be a lot about the 82 cents on the man’s dollar and 200 years till we all get to a point [or earning equally]…at least it’s kind of sort of moving in the right direction. We’re not focused on it enough because the gender wealth gap is 32 cents on the dollar and moving in the wrong direction. The gender wealth gap… we don’t have as much time in the workforce because of these ‘choices.’ But also the fact that we’re not investing as much as men.
And this is really important, wealth begets wealth, because of the power.
And so they invest more than we do and they invest sooner than we do. And while one of the mental mistakes we make about investing as we think the stock market does this [hand motion up down]. It actually has done this [hand motion up].
And that if you had invested in the stock market on any day since the 1920s, your average annual return, ups and downs and crashes, is 9.7%.
Your chances of a positive return if you stay in the market for 15 years is 99%.
If you invest $1000 at the age of 22, by the age of 65 you have $55,000. If you invest $1000 at the age of 30, at 65 you got $30,000, still good. [Your money gets] compounded. We so underestimate that.
The reason the gender wealth gap is opening is because men are investing more than we are, and it’s compounding.
It’s the reason the racial pay gap, the racial wealth gap is increasing. And the other thing that’s going on, we [women] have more debt.
So compounding [interest on debt] gives us the opposite, as well. We have more student loan debt. Why? It’s not that our university degree costs more so we don’t earn as much. We have more credit card debt, because we don’t earn as much. We get higher rates on small business loans.
What we’re trying to do and I’m trying to bring attention to, is that the pay gap absolutely [is an issue]. But it is 99.9% of the discussion, including things we need to do differently. it is all the things in between that 82 cents on the dollar and 99 cents on the dollar that is to some extent controllable and we can take action on.”
Have you thought about doing a small business loan division?
Sallie said, “We’ve thought about all of it. Yes, the challenge with financial services businesses is they are capital intensive and so they take a lot of money. So there’s a lot of capital upfront because in order for you to invest your money with us, you’re not going to be like, ‘Oh, Sallie, I know you’ll get revenues from my business over 30 years so it’s OK if you just have 1/30th of a financial advisor. Or 1/30th of a compliance department. Or 1/30th of data privacy. Or 1/30th of marketing. So you have to spend the money upfront and then the assets come over time. Same with lending. It’s capital intensive. And venture capitalists in general prefer capital-light businesses for the obvious reasons.
So we’ve got to get this business to be successful so my flywheel can kick in, so that we can do more. We’re getting tremendous demand for it from women. ‘You get me, you’re the only one who gets me. The other guys don’t get me. [They other guys] made a nice ad, but you’re the one who built a product around me,’ they say.
So I would love to find a way to partner with someone [on small business loans]. But we’ve got to be careful about because of their reputation, our reputation, etc.”
What words of advice would you give those of us in this room to encourage us to share how much we’ve made as easily as we share when we buy a new pair of shoes?
Sallie said, “I go for alcohol. [laughs] I think it’s a wine situation. Look, it’s weird for me, too. I was on a podcast, and I have spent my entire life in the money industry, and [the host] started to talk about my net worth, ‘So you’re a multi-millionaire, Sallie,’ and I pitted out. I could feel the perspiration down my side. ‘How do your siblings feel about your success,’ [the host said]. So I had to stop the interview. It was so painful for me. So alcohol is the way to go…and then warning them. Say, ‘We’re getting together Tuesday night, we’re opening a bottle of wine, let’s just have this conversation.’ So everyone can know. You could also write it down and put it in a basket or something, whatever you need to do to get comfortable.”
A lot of women here work in the financial industry, and I don’t think you can hire us all, [Yes, I can, Sallie says]. In the future could other RIAAs send money Ellevest’s way?
“You can send money my way now,” Sallie joked.
“My firm would not appreciate that…” the audience member said.
“As Gloria Steinem said, ‘No group eve age up power willingly.’ And if not us, then who? If not the women in this room? To do something different. Not contort ourselves but support other women.
The reason this is so important and I’ll leave you with this is, for some of us the majority of our careers are done, but there is not a single one of us who wants our daughters to have less money than our sons. There’s not a single one of us who wants our daughters to have fewer opportunities than our sons. That’s true of ourselves, and our spouses, and our partners, and our brothers. So I think it’s really important that we do this for the next generation.
The one group that is hurt more than this than our daughters is our sons. Because of the burden they have to carry. Today when a woman outsources her money to her male spouse, when that money comes back other, she has a negative surprise 74% of the time. That’s not chance. That’s not half the time. That is the majority of the time. That is terrible for her, and I think in some ways it is worse for him because he is carrying that burden on his own. Burdens are lighter when we carry them together.”
Thank you, Sallie!
See more about Sallie in the Ellevate Network Mobilize Women Summit recap from 2019.
Mobilize Women is a virtual event this year in August.