ECONOMIC SILUET: A Wall Street pioneer’s No. 1 money tip for women

Kamis, 18 Mei 2023

A Wall Street pioneer’s No. 1 money tip for women

VIEW IN BROWSER | SUBSCRIBE

CLOSING THE GAP

Thursday, May 18, 2023

Morgan Smith is a Work reporter at CNBC Make It. You can follow her on Twitter @thewordsmithm.

Sallie Krawcheck's biggest piece of advice for women investors is simple: Invest some money, any amount of money.

"Just do it," Krawcheck told CNBC Make It's Tom Huddleston Jr. "Put in $10, or $100, or $1,000, but get in the game."

When it comes to investing, Krawcheck's track record speaks for itself. She began her career in financial services as a research analyst, climbing the ranks to CFO and CEO jobs at places like Merrill Lynch and Citibank. She's regularly been called "the most powerful woman on Wall Street."

In 2014, Krawcheck co-founded Ellevest, a digital investment and wealth management platform specifically geared toward women, to help close the massive gender investing gap in the U.S.

It's "a huge problem" that doesn't get enough attention, Krawcheck said. Women are only half as likely to invest their money as men, an Ellevest study found last year.

If women invested at the same rates as men there would be an additional $3.2 trillion in assets under management, according to a 2022 report from BNY Mellon Investment Management. But 1 in 10 women say they don't fully understand investing, and less than 30% feel confident doing so, the report noted.

"There's a pressure for perfection with women," Krawcheck said. "Women will not invest if they don't understand, [but] men will invest anyway."

She encourages women investors to find a place they trust and just "get in the water." Investing is especially important if all of your money is in a savings account, she explained, because it can make you more money in the long run, even if it comes with increased risk.

"If we don't fix this, it's the women who end up in poverty at the end of their lives [and] who don't live the lives they want to," Krawcheck warned.

While women investors are often dismissed as not being "risk tolerant," Krawcheck previously told CNBC, making careful, calculated investments might actually be working in women's favor.

Fidelity's female customers earned 0.4% more than male customers annually, on average, according to a 2021 report from the financial services firm. One theory to explain it, Huddleston Jr. writes, is that "male investors' overconfidence could actually lead them to make riskier investments that are less likely to pan out."

Closing the investing gap can also help level the financial playing field in the long run. As Krawcheck puts it, men have only been "better off because they were in the game."

Read more financial advice from Krawcheck here.

More articles from Closing the Gap

Why the U.S. government, the country's largest employer, wants to ban the salary history question

Last week, the U.S. Office of Personnel Management introduced a proposal that would bar hiring managers from asking candidates about their salary history. Pay equity advocates say this new rule could help prevent marginalized workers, namely women and people of color, from being underpaid.

This CEO allows herself 5 fails a day: 'It gives you a competitive advantage'—here's why

To quiet what she calls her "inner saboteur," Caroline Wanga, the president and CEO of Essence Ventures, created a high threshold for failure: She gives herself five fails a day. It's only if she reaches a sixth fail that she considers it a bad day.

25-year-old makes $200/hour without a bachelor's degree: 'I work less than 6 hours a day'

Two years ago, Angelina Nguyen decided to turn her side hustle as a notary signing agent into a full-time career, launching her business, Team Signings, in San Jose, California, her hometown. That decision turned out to be a smart bet: In 2022, Team Signings made close to $150,000. Here, Nguyen shares how she built her six-figure business without a college degree.