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We have to be honest with you…we’re REALLY big fans of Sallie Krawcheck.

Getting to sit down with her and talk about financial literacy for women and investing was a dream come true in every way you can imagine.

Sallie shared some of her background in the financial industry, including the time she was fired VERY publicly (twice), and her experience climbing her way to the top of a male-dominated industry.

Other topics we cover in this episode include the gender pay and wealth gap, the reasons why women are not investing at the same rate as their male counterparts (and it’s even worse for women of color), and how our perception of “risk” may be keeping us from closing the gap.

Every interview this season has made us teary for one reason or another, and if you don’t feel a renewed fire to start getting your financial shit together after this episode…listen again.

P.S. our super-secret is out –– we’ve officially launched Treasury, the investing education platform for the Her First $100K community that combines non-judgmental discussion, jargon-free educational videos & articles, and tools to easily understand and manage your investments.

All you have to do is attend Investing 101, a live online workshop with Tori to teach you the basics of investing in a way that is fun, simple, and approachable. You’ll get the chance to invest during the workshop.

Afterward? You’ll gain access to Treasury, where you can make investments, ask questions, and participate in daily challenges.

Sallie’s Links: 

Ellevest Website

Instagram

Twitter

LinkedIn

Not sure where to start with your finances? Take the free Money Personality Quiz to get tailored resources for your financial journey!

As a gift from Ellevest to Financial Feminist listeners, get your first 3 months free! Visit ellevest.com/financialfeminist to redeem.

Resources:
Our HYSA Partner Recommendation (terms apply)

And the Number 1 cause of stress is … money

22 Ways to Fight the Gender Wealth Gap

Why Women Hold 2/3rd of the Nation’s Student Debt

Just Buy the F***ing Latte

Sallie Krawcheck-Her Wall Street Ascent

What Wall Street doesn’t understand about Women

Bad on Paper: Investing 101

Sallie Krawcheck-Goop Wellness Summit

Future of Feminism

Road to Somewhere Podcast

What comes after Retirement Investing?

How Ellevest Helps All Women

3 Reasons Women need to be more confident investors

Transcript

Tori Dunlap:

Hello, team. Welcome back. Welcome back to Financial Feminist. I’m Tori Dunlap Dunlap, money speaker and educator, founder of Her First $100K, and that girl who treats trips to Disneyland like her personal Super Bowl.

Tori Dunlap:

You’ve heard of the pay gap, but there’s an even bigger and more terrifying stat that you should be worried about: The wealth gap. Today’s guest is Sallie Krawcheck, founder of Ellevest. Y’all, this was such a pinch-me moment. Sallie has had a massive impact on my work. And getting to sit down with her and talk about financial literacy for women and investing was honestly a dream come true in every way you could imagine. Imagine interviewing one of your role models. That’s what this episode is.

Tori Dunlap:

Sallie shared some of her background in the financial industry, including the time that she was fired very publicly, twice, and her experience climbing her way to the top of a very male-dominated industry. We talk about the wealth and investment gap between men and women, why women are not investing at the same rate as their male counterparts and the tangible ways we can begin to close that gap. If you haven’t started investing, maybe because it intimidates you, this episode is exactly for you. So, please take a listen. If you love the show, rate and review, subscribe, tell your friends. We appreciate your support of our mission in this movement. Let’s listen to the interview.

Tori Dunlap:

Sallie, I’m going to cry. You are the reason I do what I do legitimately.

Sallie:

[crosstalk 00:01:41]

Tori Dunlap:

No, I found you, I discovered you four years ago, five years ago, and was into money, was into financial feminism. And you were the person who was like, “Oh, she gets it. She’s talking about what I want to talk about.” I’m literally going to cry. This is such a full-circle moment for me because my business would not exist in the way it does had your work not existed.

Sallie:

Aw, thank you.

Tori Dunlap:

Thank you for being here. I’m so excited to have you. I have an full on pinched-me moment. For any listeners who don’t know who you are already, can you tell us who you are and what you do?

Sallie:

Yeah, I’m Sallie Krawcheck. I am the CEO and co-founder of Ellevest, which, I guess, I can now say… it is a digital-first financial company, built by women for women, and I can now say is the first of its kind to reach a billion dollars of assets under management.

Tori Dunlap:

Hell yes.

Sallie:

I spent my career on Wall Street. I ran Merrill Lynch Wealth Management. I ran Smith Barney. I ran the U.S. Private Bank of Citigroup. I was chief financial officer of Citi and some other part-time jobs like that for a period of time before becoming a late-blooming entrepreneur.

Tori Dunlap:

I want to first start… Your avoidance of the words “empower” and “risk-averse” have changed how I run my business. I have taken those two things out of my vocabulary. Can you tell us why you don’t use those two words anymore?

Sallie:

Yeah. Yeah. Let’s start… By the way, I actually saw you talking on Twitter about this the other day, about empowerment. We were sitting around at Ellevest a couple of years ago now, and we were saying there was just something about the word that was bothering us, and we couldn’t quite figure out what it was. We were debating back and forth and we said, “Well, there’s something passive about it, isn’t it? Th
at you are being empowered, that it is something that is being given to you. Huh? Huh? Well, wait a second.” As women, we sort of bought, “Yeah, I want to be empowered. We’re going to empower women. We’re going to do everything.”

Sallie:

You know what? We actually have a ton of power. We are more than… pre the pandemic, more than half of the workforce. We direct 85% of consumer spending. We control $7 trillion investable assets. We have plenty of power. It is a matter of our deciding at some point having the information in order to use that power and how we choose to use that power. But the patriarchy, if I could, has sort of convinced us that it’s each gal for herself. That in the workforce, the men are promoting each other, and talking each other up, and giving each other board positions, and hiring each other’s kids. They’re playing the game as a team sport, and we women are buying all of our be-empowered-at-work books and playing it as an individual sport, right-

Tori Dunlap:

And that there’s only one seat at the table-

Sallie:

[crosstalk 00:04:41]

Tori Dunlap:

… and we all got to find each other for that one seat. Yep.

Sallie:

And I’m not competing with him or him or him for that one seat because I was there. I’m competing with you, the woman, because it’s the woman’s seat. And so, We got separated somehow and convinced that it was an individual sport and it hasn’t worked for us. That’s number one.

Sallie:

The second one which drives me berserk is when we say, “Women are risk-averse,” and it’s such just a given. I worked on Wall Street for forever and 85% of the clients there were men. And when you talk about women, they went, “Well, they’re risk-averse. That’s why they don’t invest.” Then, the implication is, “The products we’re providing are actually terrific. It’s their problem. This mutual fund, buy that, sell that, this stock, Bitcoin, GameStop, all those things are terrific. Nothing bad about them. It’s women are risk-averse, or aren’t good at math, or aren’t good at investing, or need more financial education.” None of those are true. I mean, yes, we need more financial education, but so do men. None of that. We’re as good or better at math. We’re better investors than men. We’re risk-averse. In Ellevest, we were really the first to say, “Huh. Well, that is one hypothesis as to why women don’t invest.” Here’s another, that in an industry where 99.5% of investment dollars are managed at companies owned by White men, 90% plus of traders are men, 98% of mutual fund dollars are managed by men, 86% of financial advisors are men. Maybe y’all built a business for yourself. You didn’t mean to, but maybe, and so [inaudible 00:06:16] women are risk-averse. Maybe they’re like, “I’m not buying what you’re selling.” [crosstalk 00:06:19]

Tori Dunlap:

“It makes no sense to me. I don’t see myself in any of you.”

Sallie:

“I don’t want to watch Cramer.” I love Cramer, by the way. He’s a good friend of mine, but “I’m not in mood.”

Tori Dunlap:

That was what I grew up with, which is so funny. My Dad, the stock market is a hobby for him and that’s part of the reason and why I have the financial education I do is he loves, but he spends time looking at all these things and researching all these things.

Sallie:

[crosstalk 00:06:44].

Tori Dunlap:

Right. And he loves that. It’s like golf. For him, it’s golf in the stock market. Those are the two big hobbies. I don’t have the time my Dad does to being in an investment club and watch Jim Cramer yell “sell, sell” on CNBC.

Sallie:

No. It’s a little bit… I used to use the analogy, which probably doesn’t hold very well anymore. Back in the leave-it-to-beaver days, Dad spent the weekend fixing the car, and tuning the engine, and working on the lights, and washing it, and all that stuff. And mom would get in the car and just “Take me from A to B.” And then, men tend to love that craft in the middle or the sport of it. And women, what we found when we did thousands of hours of research into women and their money at Ellevest is they’re just not interested. Just, I don’t want to read barons. I don’t want to watch CNBC. I’m too busy. I don’t consider it to be a sport. I don’t even know that my goal is to even have more money necessarily. My goal is to have enough money to start my business in five years or to have enough money to tell my boss to take this job and shove it, or to buy a home, or to retire well, that she very much conceptualizes what she wants and that motivates her, not “I’m owning this mutual fund, but Tori Dunlap, you’ve got that mutual fund.”

Tori Dunlap:

Right. Well, and that’s what my work and your work is largely about, right? It’s “How do we get money into more women’s hands so they have choices?” It’s not you can build wealth and be like Scrooge McDuck and swim in piles of money. Right? It’s more, “I saved a $100k so I can quit my job and take my business full-time,” or “I’m trying to invest as quickly as I can and grow my wealth because I want to have the agency to leave this toxic situation, or not be in a situation I don’t want to be in anymore or buy a house.”

Sallie:

That’s right. And at Ellevest, it’s two things. It is the micro which you’re talking about or the… Let me use a better word. The individual, which you’re talking about, which is, money today is women’s number one source of stress. And Tori Dunlap, our research says that, just as you’ve done, when you begin to take action about it, that relieves the stress. It’s actually not even how much is in my checking account. It’s “Did I put together a budget? Did I meet my budget? Am I investing a little bit out of every paycheck?” That’s the number one driver of confidence for women in achieving their future financial goals. My kids are older now, but I sort of say the old kindergarten, “Take a frown and turn it upside down.” So, that’s the individual level.

Sallie:

At the macro level, getting more money in the hands of women, which is Ellevest mission, is only good. It’s good for society, for our sons, for our daughters, for our husbands, for our partners, for the economy, for the markets, for not… I mean, it just, there’s nothing bad that happens. Usually when I speak, some smart ass will raise their hand and say, “But if women have more money, they spend it.” And you’re like, “Yep, that’s called growing the economy.” [crosstalk 00:09:49]

Tori Dunlap:

Also, that’s the most gendered bullshit I’ve ever heard
in my life.

Sallie:

Well, by the way, typically comes from a woman who also grew up in a patriarchal society, so she’s [crosstalk 00:09:58].

Tori Dunlap:

Look at the internalized misogyny and all of… Yeah.

Sallie:

Yep.

Tori Dunlap:

Yep.

Tori Dunlap:

You work and grew your career in one of the most male dominated broey industries on earth. I think you give the example and I often use this example in my own work too, that “You look at Wall Street and it’s a bull out in front of the financial district.” You have this, like, sculpture that’s a bull, whose testicles you rub to gain financial prosperity. Right? And it’s the most-

Sallie:

I don’t rub the testicle. Sorry.

Tori Dunlap:

Yeah [crosstalk 00:10:38].

Tori Dunlap:

Growing your career in this super male-dominated industry, how did this change who you are and how did it change what you wanted?

Sallie:

Yeah. Well, but you’re right. I mean, look at how… the fact that we have the money industry has a phallic symbol as its brand symbol, the fact that… And by the way, what also sort of is notable is that when the statue that is for the feminine… You’ve got the masculine, which is the bull. And then, a Wall Street company comes along and says, “Okay, let’s do the feminine.” It’s a little girl. I’m like, “It’s not even a woman.” It’s a little girl. We actually, the idea came to us first, and at first, they wanted to put a cow up and I’m like, “Yeah, I don’t think we [crosstalk 00:11:24] cows.” Personal point of view. Yeah. There’s a… Actually-

Tori Dunlap:

I would concur.

Sallie:

I have the deck from it, from the PR firm.

Sallie:

Okay. So, how did it change me? I don’t know. I think I’ve actually sort of been the same person since I was 12. Even though if you read about me, you’d think I was really quite a different person depending on what job I had when I used to be quite successful. Tori Dunlap, it was interesting what a bitch I apparently was when I would read about myself in the press. I’m like, “That is a terrible woman. What a jerk.” And then, when I got fired for doing the right thing for clients, it was amazing how delightful I was again. I think I was the same person. I’ve been this energetic, and this straightforward, this analytical for forever. It was interesting what’s always changed was the press.

Sallie:

Now, what people do say to me a lot, there’s an assumption that it hurt my career being in a male-dominated environment, and there certainly were times it did. Absolutely. Absolutely, I mean. I was telling a friend of mine the other day when I remember when this trip mall in Florida with the brothel and the names of the men, including Robert Craft who-

Tori Dunlap:

Oh!

Sallie:

… frequently came out. I’m like, “I’m going to know people on this list,” and sure enough, one of the people on the list was my CEO’s number-two, who… he used to send a scream at me. I’m like, “Yeah.” I had no chance that his number-two was such a misogynist. They couldn’t even see the humanity of women and then was trying to manage me. But there were times when it was good for me to be a woman in the industry, because I stood out. And if my work was very good, which I’m going to be frank, it was, you couldn’t forget me. You would say, “Well, she’s got 20 male competitors.” So, “John.” “Who’s John?” “He’s got brown hair.” “I don’t know.” “He’s got glasses.” “I don’t know.” But for me, well, she’s a woman. So if your work was good, there was a chance that it could be actually a positive or even quite a positive.

Tori Dunlap:

Yeah. Even before you started your career, when you were moving to New York, your father forbade you from moving, right?

Sallie:

Yeah.

Tori Dunlap:

Do you feel like that was a common theme in your life to do things despite people telling you not to? Do you think it contributed to your success?

Sallie:

Well, I’ve been underestimated every step of the way.

Tori Dunlap:

Sure.

Sallie:

Yes, my Dad, who is my dear heart, gave me typing lessons to prepare for my career as an administrative assistant, but it’s been just every step and not… In investment banking, you didn’t get on the good deals. I was the one who had to babysit the sort of over-the-hill banker. When I started in research, they gave me the backwater of life insurance.

Tori Dunlap:

Sounds thrilling.

Sallie:

Yeah. It was amazing. But I actually put out some controversial and correct, as it turned out, research on life insurance very quickly, which then got me promoted to covering Wall Street. So, there’s been this, “Yeah, she’s not going to manage it. She’s not going to do it.” I know I’m smart enough, and then it just becomes “Can I work hard enough and can I take all the rejection?” If any of you out there who’re listening have not had enough rejection in your life, for sure, start a venture funded business because you’ll get rejected. You’ll get rejected, maybe unless you’re a hoodie wearing bro who went to Stanford in codes, but for the rest of us, it is a multiple times a day occurrence.

Tori Dunlap:

Yep. I have a background in theater. A lot of people are shocked to discover that. I didn’t major in finance. I didn’t even major in business. I majored in orgcom and theater. I think that that’s part of the reason I can run my business is because I was used to hearing no all the time. I was used to hearing… getting rejections and then you’d get the one, “Yes. That would potentially be life changing,” but accepting that you’re going to pitch yourself and you’re going to be vulnerable constantly and it might not work out. Yeah. I think that’s super powerful.

Sallie:

You use it as means of… When people say pivot, they tend to mean this large shift, but it’s can be small adjustments along the way. So, each no provides you with more information content. Right?

Tori Dunlap:

Right.

Sallie:

It’s a method of sort of groping in the dark in a way to find your way to yes. I mean, if you just keep getting the same no for the same reason, and you don’t do anything different, then shame on you but if you use it as a learning experience… And there are a thousand opportunities a day to be successful. We just often aren’t looking for them and we don’t see them.

Tori Dunlap:

Right. Well, isn’t that what the definition of insanity is, doing the same thing over and over and expecting different results.

Sallie:

For sure. Yeah.

Tori Dunlap:

Yeah. You were fired very publicly. How did you navigate that? How did you navigate that especially being in the public eye?

Sallie:

Tori Dunlap, I was fired very publicly twice, so you have just short-changed me one full firing.

Tori Dunlap:

Right. I feel like, me saying “You are fired very publicly” is already pretty harsh. I don’t know. I was like, “Gosh, do I say it twice?” So, yeah, go for it.

Sallie:

[crosstalk 00:16:38] It’s not a secret, Tori Dunlap, when it’s on the front page of the Wall Street Journal and New York Times.

Tori Dunlap:

Fortune Magazine. [crosstalk 00:16:45]

Sallie:

Look, they were both difficult. One was when I was at Citi. I was running Smith Barney in the Citi Private Bank. And I was really trying to do the right thing for clients and I was fired for it. It was the financial downturn of ’07, ’08. We had missold products to our clients that we thought were low risk, but were high risk, and they lost all their money. And I said, “Look, this was our fault.” In part, there’s small print that says “You could lose everything,” but we blew it. We blew it. “Let’s partially reimburse them.” There was a showdown at the board. I never thought I’d be at a showdown at the board, and I won, but of course, my boss fired me.

Sallie:

The second one was at Merrill. When I was running Merrill, I’d been brought in to turn it around after Bank of America bought it. Was there for two years. The guy who brought me in left after two months. New boss offered to leave when he came and he said, “Nope, you got to stay and turn it around.” And we did. We had great results. And two years later, when I’m just sort of wiping the invisible lint off my shoulder for look-at-that-turnaround, he was essentially like, “Thanks for turning it around. We’re going to have a guy who has never run a wealth management business before, but who I like… who I know better than you, and work better and more with you, and you’re not a culture fit, and so off you go. By the way, of course, obviously, we’re not going to pay you what your handshake was either. Just don’t let the door hit as you leave.”

Sallie:

So, they were both upsetting for two reasons, but the good part is, I hadn’t fallen down on my face and failed in public. If they’re good firings, these were good firings. There was a difference of opinion. There was a different direction or whatever that they were going, but the more important point is, regardless of it, I am so damn fortunate. The way I approached it could be, “I’m humiliated. I’m on the front page of the Wall Street Journal,” or “Look at me. Hot damn!” That I would do anything that would get me on the front page of the Wall Street Journal. It’s pretty incredible, actually. If you recognize your privilege, you recognize your good fortune and you sort of are centered within yourself, for “This is not all of me. This is not who I am,” right?

Tori Dunlap:

Right.

Sallie:

“By the way, I’m going to get back up. These are really great experiences. I’m going to incorporate them into what I know and I’m going to move forward.” And Merrill or Bank of America, I do remember. First, he’s like, “Well, we’re reorging,” blah, blah, blah. And he said, “You’re out.” And I remember going, “Me? What?” Like, “How about somebody whose business is not doing well?” My second thought after that, or maybe third thought was, “This is actually the best day of my life and I don’t know it yet, because I’m spending more time with these people than I am with my family. And if they don’t want me here, I don’t want to be here. And so, I’m going to use this experience and launch into something else. So, this is the best day because my God, if he hadn’t fired me, I’d still be there with people who don’t particularly want me.

Tori Dunlap:

Right. Do you feel like, at Merrill, they were kind of trying to manufacture a glass cliff kind of situation?

Sallie:

Both my big jobs were glass cliffs. Both of them.

Tori Dunlap:

I’m going to stop you really quick. I should probably define glass cliff. Basically, bringing a woman in or bringing somebody into leadership, expecting the company to fail and then being able to blame it on this new leadership. So, instead of the glass ceiling, it’s like a glass cliff of like, “We’re going to elevate this woman and it’s going to be great,” but is secretly “We’re hoping that she fails so that we can blame it on her as this company goes downhill.

Sallie:

No, it’s interesting, Tori Dunlap. I actually think of… I define it myself differently. I define it as, “This business is in trouble. Let’s have a person who’s different, a person of color, a woman of color, a woman, White woman. Let’s give it to them.” And then, if it fails, “Ah, it’s not one of her own.” And so, I felt like, certainly, I was put on glass cliffs. When I was brought into run Smith Barney, it had been truly damaged by the research scandal of the early-2000s. And so, I was brought in because I had run really the largest and the only research business that had stayed out of the scandal, had stayed focused on clients who didn’t have to pay big fines, who’d done the right thing. And so, I actually think my boss wanted me to be successful. And part of my being brought in as a woman was see how different it really is. See how different, like, this is a big signal that it’s someone from th
e outside and it’s a woman. Same in returning around Merrill. This is a statement. But what I’m absolutely sure of, Tori Dunlap, is had those businesses been in good shape, they never would’ve given the job to me. It would’ve been next White guy in line, next White guy in line, next White guy in line.

Tori Dunlap:

Well, how awful is that you’re only going to get promoted or you’re only going to get into leadership C-level suite if we feel like this is our last resort. It is like a Hail Mary of like, “Okay, we’ll put a woman, we’ll put a person of color in charge.”

Sallie:

Yep. That’s right. That’s how it has been. There’s another way for us to get into positions of leadership, which is to start our own businesses.

Tori Dunlap:

Yep.

Sallie:

I mean, yeah, there’s some who make it start in the mail room and work their way up over 30, 40 years, but it’s rare for it to be somebody who doesn’t represent the majority. In fact, Goldman Sachs, the CEO there, it was now a year ago or so. Well, it was when we were allowed to go outside, so it was maybe [crosstalk 00:22:35] longer that. And he was saying, when he did some work at Goldman about why women weren’t making it to the top, everybody thought women quit. What he found is actually they stayed, they just didn’t get promoted. And so, for women to get into leadership, you got to start your own thing, or so far, you’ve had to have something tough happen and just, we got to change it.

Tori Dunlap:

We talk about the wage gap a lot in society, in the press and public. And we should continue to talk about the wage gap, but we are not talking about the investing gap. Why is it left out of the conversation? Can you give us, I talk about this in my work constantly, but I love your explanation of how important it is that we need to start talking about this.

Sallie:

Well, the investing gap costs some women as much or more as their gender pay gap. It’s a, we women keep most of our money in cash in savings, earning nothing. And men, hisTori Dunlapcally, have invested the majority of their money in the stock market, in diversified investment portfolios. And the stock market has returned 9.7% on average annually since the 1920s. So, the investing gap is a big one.

Sallie:

I’m going to add another one, Tori Dunlap. The gender wealth gap. If the pay gap is what comes in, and you mentioned, we talk about it all the time, Google it, you get 58 million sTori Dunlapes that come up. The wealth gap is what we keep and what we have. If you Google, it is about 15,000 sTori Dunlapes. Almost none. The pay gap is 82 cents to a White men’s dollar. The wealth gap, 32 cents for Black women. A penny for women of color, a penny. The pay gap, before the pandemic, is slowly moving in the right direction; the wealth gap in the wrong direction. Now, in between the pay gap and the wealth gap is something you mentioned, it’s the investing gap. Because you’ve heard the term “wealth begets wealth,” “compounding,” “leave… put your money in the market, you get a return on return on the return on return on the return,” that in part has opened up the difference in the two gaps.

Sallie:

The other thing that’s in there is debt and women tend to have more student loan debt-

Tori Dunlap:

Two-thirds. We hold two-thirds of the student debt in the country.

Sallie:

Yeah. Not because college costs us more, but because the pay gap then drives it. When we have mortgages, they have higher rates than they do for men. There are a number of other things such as we tend to take more career breaks, but that’s where Ellevest really operates, of course, is we start with… We now have executive coaches to help people, women earn more money at work. We have debt coaching. We have expense coaching. We obviously have investing. We try to operate all through here to help women close their gender wealth gap.

Tori Dunlap:

Right. I know you give this statistic a lot too. I always tell people, we take less money because of the pay gap. It earns less money because we’re either waiting to invest or not investing at all compared to men. And then, we’re living seven years longer on average. So, less money growing at a slower rate, and then we are expected to live longer on that money. That equation makes no fucking sense.

Sallie:

Well, and pre-Ellevest, the investing algorithms assumed everyone was “average,” which is funny if you’re a man, because you’re going to earn more, your salary’s going to peak later, and you’re going to die sooner. So, you die… Worst case scenario, “Oh, I died. I had too much money.” For women, you risk running out of money. Just as the medical industry, all the research was done on men and women’s heart attacks are different. Do they crash dummies were built on men, so women tend to get hurt more. So, in the financial industry, again, the men built it for themselves, not necessarily because they meant to, but it’s been harmful to our health.

Tori Dunlap:

Yeah. I know from my own research and from feedback I get from women all the time that the reason they don’t invest is fear.

Sallie:

Mm-hmm (affirmative).

Tori Dunlap:

Why are we so fucking scared? Like, why are we still fearful?

Sallie:

Because we’ve been told to be. We essentially received messages since childhood [crosstalk 00:26:51]. Yeah. Since childhood, still today, we talk to our sons about growth, and abundance, and investing, and be a CEO, and “go for it.” And for little girls, “It’s coupon clip. Be careful. Don’t go to the top of the jungle gym. Watch mommy budget.” In only a single digit percent of households does mom take the sole lead on investing. So, we look at Dad and junior, we look at mom, then we grow up, Tori Dunlap. There’s a ton of male money-media: CNBC, Bloomberg, Cranes. It’s all very abundance-oriented, how to make money.

Tori Dunlap:

Yes.

Sallie:

There’s no female money-media to speak of. There’s no women money magazine. And the articles in the press for women, two-thirds are negative about how hard it is, how difficult… how we don’t want to do it. And the other third are patronizing or flat-out sexist.

Tori Dunlap</ strong>:

Yeah. “The reason you’re not rich is because you buy too many lattes.”

Sallie:

That’s exactly right. We wrote “Just buy the effing latte,” because the math is incorrect, but nobody’s saying to the guys, “Don’t buy the tool belt,” but it’s all gaslighting us that, “Yeah, you make 80 cents to a man’s dollar, but it’s all your fault because you bought a latte.” That actually is not the issue.

Tori Dunlap:

No. It is the small little pleasure in your life. And if it’s a small little pleasure in your life, great. That’s okay. You can grow wealth and buy coffee. It’s not a singular issue. Yeah.

Sallie:

No. It’s completely gaslit. And so, for us, money is this negative, whereas for men, it’s this positive. So, why are we scared? Because we don’t even talk about it. I’m sure you know. We talk about this all the time. We prefer to talk about literally any other topic, right?

Tori Dunlap:

Sex, death, politics, all of it before we talk about money.

Sallie:

Anything. Anything. We have sex before we talk about money. Like, what? [crosstalk 00:28:50] settle this country, but we have sex before. Like, what?

Tori Dunlap:

We get fully naked with somebody.

Sallie:

Fully naked. [crosstalk 00:29:00]

Tori Dunlap:

Fully naked.

Sallie:

I mean, really? That’s where we are. Money is [inaudible 00:29:06] the damn thing. And I’d love to say, if men got together 200 years ago and said, “How do we keep women from having full equality?” This is what they would have done. Right? They would’ve made us feel inferior about money, kept us from talking about it, so we wouldn’t have invested because we didn’t know how to. We wouldn’t have asked for the raise or enough risk, we aren’t talking about it. And they keep all the good jobs for themselves. They keep the Wall Street jobs, the venture jobs, but the ripple effect, Tori Dunlap, then they build the industry for themselves so we don’t invest and they build the venture industry for themselves so they don’t invest in our companies. I don’t think they meant to do it, but it’s pretty smart if they did.

Tori Dunlap:

The explanation I give all the time is that the patriarchy profits off our silence because they have built these, to your point, these institutions that continue to support them. And they’re talking about money, but they’re telling us that talking about money is taboo because it keeps them in power.

Sallie:

Right.

Tori Dunlap:

So, if they can sit there, and go golfing, and do whatever, and talk about money, but they tell us that talking about money is bad or that wanting money is bad because that’s a narrative we hear as women a lot. “You shouldn’t want money. That’s greedy to want money. You should just sit down and be grateful for what you have.”

Sallie:

[crosstalk 00:30:24] ambitious. We’re not even supposed-

Tori Dunlap:

Right.

Sallie:

Right? That’s tacky and unattractive. I know.

Tori Dunlap:

“You shouldn’t be intimidating. You should not be an intimidating woman.” Right? And that’s of course-

Sallie:

It’s even me. I was on the Death, Sex & Taxes. There’s the podcast a few years ago.

Tori Dunlap:

Oh, yeah.

Sallie:

And the woman on it started to ask me about my money and the dynamic with my family and all that stuff. Literally, I felt a bead of sweat come from my armpit, trickle down my side, and I’m like, “I have to stop this interview.” Like, “I can’t do this. I can’t do this.” And I’m like, “I can’t miss this money.” Like, “It’s one of my whole thing.”

Tori Dunlap:

Right. Right. Yeah. I think, back to what you said about how we raise kids too, the more I think about, even the toys we give kids, we give boys Legos, and things to build, and things to create. Right? And we give women dolls, things to take care of. Right? So, we tell boys that their “value to society,” and I’m putting that in quotes, “is what you build, and your innovation, and your growth.” And we tell women or girls, “Your value to society is caretaking.”

Sallie:

Yeah.

Tori Dunlap:

And it’s not you, it’s not developing you or your skills, or the way you see the world. It is how are you taking care of somebody else.

Sallie:

Yeah.

Tori Dunlap:

And we learn that by the time we’re, like, four years old. And yeah, it trickles out for every aspect of our money and our lives.

Sallie:

Well, that’s actually why we talk a lot at Ellevest about caring for yourself, which I know sounds corny, but there’s an exercise in which you name your future self. You give her a different name. Mine is Esther, which is my grandmother’s name. And to your point, we live longer than men. 80% of us die single, not because we choose to necessarily. And half of marriages end in divorce and we live longer. And so, Someone’s got to take care of Esther, and it’s got to be Esther. It’s got to be pre-Esther. And if you can sort of picture that and picture your own grandmother, and sort of start putting aside for her as well, because you don’t want to be living in your son’s basement for goodness. I mean, I know I don’t want to live in my son’s basement.

Tori Dunlap:

Right. My good friend, Amanda, who runs Dumpster Doggy, she’s an investing expert. We talk about bad grannies. It’s the bad granny version of ourselves. And mine is drinking chardonnay at lunch and flirting with her much younger Pilates instructor named Luca. That’s the plan for my retirement.

Tori Dunlap:

Since this data is telling us that the median women, they’re currently spending more than they’re making, how do they make room in their budget to start investing?

Sallie:

Lots of ways, one of which is, up your skillset and see if you can find yourself a better paying job, go for that raise. As we come out of our homes and the economy, I think is going to be expanding rapidly. Jobs are going to be much more available. Bringing more in is always a great way to have more money. By the way, while we’re in these last phases of this pandemic, I hope, taking whether it’s the digital marketing class online or the coding class online or whatever you can do to continue to move your skills forward is always a great thing to do.

Sallie:

The second thing, take a hard look at your expenses. If we’ve learned anything over the past year, it’s what’s important to us, and get rid of the stuff that isn’t important. For me, it’s clothes now and jewelry. The stuff that I just sort of loved looking at and spending money on, and I’m looking at my clothes, I’m like, “What am I doing with all these?”

Tori Dunlap:

Oh, and I wear sweatshirts all day. I don’t need the clothes to go on it anymore.

Sallie:

This shirt looks like, but it’s sweatshirt material. It just like a regular shirt. I don’t know about this waistband thing, but when we go back to work, but we’ve all learned something about ourselves, and so we’re spending money in places that are not meaningful to us anymore. So, get rid of that. For sure, get rid of some of those streaming services when we’re on the other side of this. And then, just, you got to make some hard choices and pay yourself first. You probably, Tori Dunlap, we talk about the 50-30-20 rule at Ellevest. 50% of your take [inaudible 00:34:49] paid in needs, 30% to fund, 20% for Esther, pay down that credit card debt with that, build the emergency fund, invest. But if that 20% is not doable, you can find 1%.

Tori Dunlap:

Talk to me about that 1%, because something I hear from women all the time is they go, “I only have $100 a month,” or “I only have $20 a month.” And what I tell them is like, “That is better than nothing-“

Sallie:

Absolutely.

Sallie:

“… and it’s also to build your financial habits over time.” So, what would you say to a woman who’s like, “I can barely find any room in my budget and it doesn’t feel ‘worth it'”?

Sallie:

Oh, my gosh. This is exactly why we founded Ellevest. Let’s be perfectly clear that the investment minimums of the industry that have been in place are sexist and racist, right?

Tori Dunlap:

Yes.

Sallie:

Because who’s got the money in order to invest? Men. We have no investing minimum in Ellevest. None. So, you can invest with a penny. We can only give you a diversified investment portfolio with a dollar. And so much better to start with that $100 or that $10 for, one, to get in the habit and have it grow… have that amount that you invest grow over time. Two, so you can get used to it. Remember, we’re not talking about it. Women tend to think the downside in the stock market is much greater than it hisTori Dunlapcally has been. Much greater.

Tori Dunlap:

Yes. So much riskier. Yeah.

Sallie:

Much riskier. Right? Though, can I lose everything? You’re like, “Well, you can.”

Tori Dunlap:

Well, and you don’t lose until you sell. That’s the other thing, I think, people don’t-

Sallie:

For sure.

Tori Dunlap:

You don’t actually lose the money until you sell. Yeah.

Sallie:

Well, and if you lose everything, we got bigger problems. If you’re in a diversified investment portfolio and you lose everything, believe me, you’re not going to be thinking about your diversified investment portfolio. It’s going to be a much-

Tori Dunlap:

You’re going to think about the zombies that are walking up your street because-

Sallie:

You got it. You got it. You got it. The aliens will have landed. Lost my train of thought there, but it’s so you can watch it and see it and start to build up a little bit more. If history is any guide, you’re going to be surprised in 5 years, 10 years, how much that turns into. That if you’re able to just not watch it all the time and not freak out about it, then when you look again, you’re going to say if the market sort of again goes up that 9.7% or even 5% on average a year, you’re going to have earned a return that you couldn’t have earned any place else.

Tori Dunlap:

Yeah. Well on that point about not watching it obsessively, I get questions a lot again about short-term investing. And for me, that’s a complete oxymoron. There is no thing… that’s no such thing as short-term investing. Investing, the death definition is you’re putting time, energy, blood, sweat, and tears, money to grow for a long time. So, what do you say to the person who’s like, “Oh, I have a goal that is two years out that I want to start investing for,” or “I want to do the short-term thing.” What risks do they take on with that?

Sallie:

[crosstalk 00:37:37] fine because in Ellevest, we’ll put you in a mostly bond portfolio. So, everybody who’s investing is only equities in the stock market, but there is the fixed income market, which is a form of debt, which has lower volatility, typically lower returns. So, there are ways to invest for the shorter term. But I love that you say it’s an oxymoron. You’re exactly right. By the way, I would say there is no short-term investing. It’s called trading. Nobody has traded their way to a comfortable retirement. Nobody. Okay, maybe some professionals who do it, but there is no individual trader who’s like, “Yep. I’m sitting here on my back porch in my rocking chair and I traded in and out of Amazon or IBM,” or whatever.

Sallie:

Let’s be clear. When you are trading, you are betting. And the bet that you are making when you trade is that the stock market
is wrong, that the stock market, you see something it does not see. It is you versus, let’s be perfectly clear, tens of thousands, if not more, of full-time traders, portfolio managers, analyst, junior analyst, senior analyst, who’s full-time institutional sales people, research analysts whose full-time job, it is and has been to price the individual stocks. Okay?

Tori Dunlap:

Yep.

Sallie:

We went to school for it. And many of them have done it for decades. It is what they do. And somehow, we’re going to come home. At the end of the day, we’re going to turn on CNBC. We’re going to beat everybody.

Tori Dunlap:

We got it. We got it figured out. Well, I think, too, we see all of these… and the media does not help with this. We see all these public success sTori Dunlapes of millions of dollars for GameStop and all this shit. And it’s like, how much risk, though, did they take on to do that?

Sallie:

Yeah. They’re not showing the people who lost the money necessarily told they decide to tell that story, but here’s the other thing, Tori Dunlap, and this is really important, which is that when women outsource money to their partner, for example, the man in their life. Remember that money comes back to them in 80% of cases. Right? When that money comes back to them, 74% of them have a negative surprise. And I’ve seen it with my friends.

Tori Dunlap:

Hmm.

Sallie:

The worst week of their life, their husband died or their husband left them. And they’ve been out of the money, and then they’re like, “All right, what do I have?” 74% negative surprise. What I think is happening there, Tori Dunlap, is it just as we women are taught that we’re bad with money, men are taught to be confident with money. Men are taught that they’re supposed to be good with money. And so, they’re trading GameStop, or paying too much in fees, or staying in the wrong mutual fund.

Tori Dunlap:

Or making these big moves because they feel like that’s the sexy thing to do.

Sallie:

Or trade, playing golf with their financial advisor and allowing him to over trade. And so, it hurts us. The patriarchy hurts us with these bad message around money. I think it hurts men as much or more because they are isolated. They’re not supposed to ask for help. They try to do it on their own. And then, they don’t have anybody to lean on. So, I think it is the most loving thing a couple can do to both engage with the money. By the way, the more often a couple talks about money, the happier they report being. I think, I don’t know where my chicken is or where my egg is, but I think it’s that we’re in it together. We’re supporting each other.

Tori Dunlap:

Right. Well, and it also makes for a more beneficial, healthy relationship in general, but also around money when you’re viewing it as a tool, again, to get these specific things out of life. So, if you’re like, “We want to travel internationally two times a year, how do we use money as a tool to get there?”

Sallie:

Well, in every way, money is more than just money. To your point, it’s how do we spend our free time? It’s also power, right?

Tori Dunlap:

Yep.

Sallie:

The unhappy couples who aren’t talking about it, you’ve probably got one partner who’s keeping, “No, you don’t need to… No, we’re good.” So, money is never just money. Money can either be a significant positive or a significant negative.

Tori Dunlap:

One of the things that has really irked me, and I would love your thoughts about it, is when the whole GameStop thing happened. We had the conversation shift to, “Oh, this is a democratization of Wall Street.” I call full bullshit on that, because if we’re going to have a democratization from straight White men who run hedge funds to straight White men on a Reddit forum, that is not democratization if it leaves out women, people of color, et cetera. Any thoughts on that?

Sallie:

Well, I think everybody who wasn’t involved in it, first of all, should be happy to be left out because there was a lot of… there’s [crosstalk 00:42:36].

Tori Dunlap:

Sure.

Sallie:

Right? Just completely stay away from it. Look, Ellevest is all about democratization of investing. That was clearly trading. What bothers me in all of that is the view that you are trading for free, when nobody trades for free. That there are their payment for order flow, which hurt the price at which you sell stocks that individuals aren’t aware of. And, “Oh, I got it for free.” No, you didn’t. You got a price very different from what you otherwise would’ve could have gotten it theoretically. Just been around for a while and it’s just like, these issues keep popping up in different forms, where the professionals scrape money that individuals don’t know is being scraped, and make a fortune off of naive individuals overall. So, I’m all for the democratization of investing, not Bitcoin yet, not the GameStop, but of true investing. And I’m all for greater fairness. And people would say more disclosure, little tiny type at the bottom of a website isn’t always the right way, but just-

Tori Dunlap:

Well, and lofty language that feels like it’s not in English.

Sallie:

Yeah.

Tori Dunlap:

Right? There’s so much investing jargon that gets thrown around where people are like, “I don’t know what this means.” If you were to explain a stock, it’s a piece of a company. Cool. That’s a lot easier explanation than-

Sallie:

Oh, by the way, this is part of the democratization of investing, Tori Dunlap, which is one of the things we found in our research at Ellevest is that men will invest through jargon and terms they do not understand; women will not.

Tori Dunlap:

Blindly?

Sallie:

Well, yeah. It’s actually been a positive. Back in the day when I was running Smith Barney, 84% of our clients had a managed account. Neither gender
knew what it was. Neither gender would ask. And I always loved to joke “Men don’t ask for directions; women don’t want to bother.” The men bought it and the women didn’t. Now, your reaction exactly what they would blindly buy. Yeah, but they were much better off because even though they didn’t know what it was, if the market is what we’re trending over time, they’re at least invested in what’s hurt us as women. We’ve been socialized to get A’s. And so, what we see again and again is, “I don’t want to bother my financial advisor, but I got to figure out what this is. So, I got to go buy a book. Does Tori Dunlap have a book? I bought the book. I got to put the book on the table. I didn’t read the book. I never read the book. I didn’t want to read the book. I started to read the book-“

Tori Dunlap:

“I’ll get to it on next week. I’ll wait till next month. I’ll figure it out.” That’s what I hear a lot of times. Women, they want to do it correctly. So, they’re like, “I’m afraid I will invest wrong.” I hear that every day and I’m sure you do too. “I’m worried. If I get started investing, I will ‘do it wrong.'” And I’m like, “You cannot let inaction or paralysis keep you from actually doing the fucking damn thing. And it’s not your fault that you’re not doing the damn thing. Everybody’s told you to not do it.”

Sallie:

For sure. And what we should have is a clock next to the bed that shows her that she can lose depending on how much money [crosstalk 00:45:57].

Tori Dunlap:

Right. How long she waits.

Sallie:

… over time, a hundred dollars a day. Right? And I often say to women, “If you’re making $85k a year and you leave money in cash versus investing as much as Amanda’s, over time, because the power of compounding, you could lose up to a hundred dollars a day.” And I just, I say, “if you had a purse, and a hundred bucks fell out one day, and the next day another hundred bucks fell, how many days would it take you to fix the purse? You might lose 200 bucks, but you wouldn’t lose three.” And yet, investing because we don’t see it, and because we perceive it as riskier than it is, and because we perceive it as less wealth creating than it’s hisTori Dunlapcally been, we just let it wait. And that’s why we founded Ellevest. The only financial company built from the ground up for women, which even when I say today, Tori Dunlap, I’m like, “That really sounds sort of dumb,” except when you get into the details of it and you realize that the industry just wasn’t built for us.

Tori Dunlap:

So, my final question for you. Get on your soapbox and tell every single woman who’s listening why she is powerful and why she is deserving of money.

Sallie:

Because she’s a total badass. Because we all are. Everybody deserves to be the star of their own life. Again, I know we’ve been socialized not to talk about money, but you can’t do it without having money, without having the freedom that that brings to take the job you want to take, or not take the job you don’t want to take, or leave the… I mean, every one of us knows a woman, or a sister, or a cousin who’s caught in a relationship with a jerk and they can’t get out because they can’t afford to. And if you’re not going to do it for yourself, you’ve got to do it for our children, for our daughters, for our nieces, for our nephews, for our sons because no… We may all be like, “I’m okay,” and “Ah,” and “Duh, we’re okay.” But nobody wants to see their daughter in a position of having a smaller life than their son. And if we are not modeling that behavior for her, it’s going to perpetuate itself where she’s like, “I’m not good with money.” And so, we have to do it for them, that next generation as well.

Tori Dunlap:

Sallie, thank you. Where can people find you?

Sallie:

Oh. Ellevest.com. Find us there.

Tori Dunlap:

So much amazing information from this episode. If you want more info about Ellevest, check out the link in our show notes. And we’re not done talking about investing. Next Monday, I am giving you an Investing 101 episode that will blow your mind, giving you the very actionable steps to finally get started investing and growing your wealth. If you want more information about what we discussed in this episode, Sallie, myself and this show, check out our detailed show notes at financialfeministpodcast.com. Can’t wait to see you back here next week, Financial Feminists. Talk to you soon.

Tori Dunlap:

Thank you for listening to Financial Feminist. Financial Feminist is produced and hosted by me, Tori Dunlap Dunlap. Theme song and audio production by Jonah Cohen Sound. Administration and marketing by Olivia Kolkana, Sophia Cohen, and Kristen Fields. Research by Ariel Johnson. Promotional graphics by Mary Stratton and photography by Sarah Wolfe. A huge thanks to the entire Her First $100K team and community for supporting the show. For more information about Financial Feminist, Her First $100K, our guests and our sponsors, go to financialfeministpodcast.com.