Former Queen of Wall Street Wants Women to Take Control of Their Finances

And she wants you to do it now!

#money

#money (Photo: Ray Moreton/Keystone/Getty Images).

In 2016, more women are going to college than men, outranking them in earning advanced degrees and they are on the rise as the family breadwinner. But one area where women fall short next to men is with investing. The wage gap has been well publicized, but what often flies under the radar is the very important investment gap. A recent study by Fidelity Investments reports that eight in 10 women have refrained from discussing money with family and friends, partly because the subject is “uncomfortable” or “too personal.”

Only 47 percent said they feel confident when they talk about money and finances with a financial advisor or other financial professional. And millennial women in particular seem to eschew anything that has to do with finance. A recent Bankrate Money Pulse survey found that just 46 percent of Americans are willing to invest their money, while 54 percent stay far away from stocks, mutual funds, or retirement accounts. Only 18 percent of millennials (ages 18 to 25) are willing to risk their money in the market thus earning them the title of the generation least likely to invest.

Sallie Krawcheck

Sallie Krawcheck (Photo: Courtesy).

But Sallie Krawcheck wants to change all that for women. The former Queen of Wall Street who acquired the professional women’s network 85 Broads, renaming it Ellevate a year later, wants to help women take control of their futures. That is why she launched Ellevest, the first digital investment platform designed specifically for women. “No one was talking about the gender investing gap. I wanted to build something that is smarter than anything out there and geared toward women in a substantive way. We live longer. We need to plan for it.” She created it because she saw, through hours of research, that women were intimidated by all the jargon and the traditional approaches to investing.

“We just thought ‘What if we took away all the jargon?” Krawcheck told the Observer. “What we want to build is something that won’t take a lot of time, [in] a woman’s language rather than a man’s. So it’s not about buying a large cap fund versus a small cap ETF. It’s about do you want to buy a house? Do you want to start a business?”

And with help from a lead designer at Vogue.com, Krawcheck wants you to go through your financial plans while enjoying a nice glass of rosé after work. Some of the biggest names in finance are backing the platform, including Morningstar, Ajay Banga, CEO of MasterCard; Karen Finerman, co-founder of Metropolitan Capital Advisors and Mohamed El-Erian, the former CEO of Pimco. They clearly believe that Ellevest is a pivotal way to capitalize on this untapped market.

How smart is your banking?

How smart is your banking? Getty Images

So what can women do right now to start empowering themselves financially (besides signing up for Ellevest today)?

1. Don’t Wait Any Longer

Krawcheck says the overwhelming mistakes women make when it comes to investing is waiting. “Women wait for lots of reasons. One reason is they don’t recognize how powerful compounding is and how much they are losing by waiting. Another reason we wait is that we have been trained to think that investing is hard and it takes a lot of hand holding,” she said. She said picture a hypothetical woman in her late 20’s who has been working for a while and is making around $85,000. She’s saving about 20 percent of her paycheck every month and puts it in the bank instead of investing it.”You know they’re all doing this. They are saying,  ‘I’ll [invest it] do it later. Do you know how that much costs you a day? $100 a day! If you had a hole in your pocketbook and lost $100 a day, wouldn’t you do something about it?”

2. Always Remember Beyonce

“For years I said if my husband can cheat on me, your husband can cheat on you and no one believed me. But if Beyoncé can get cheated on, none of us are safe!” By taking control of your own finances you are giving yourself so much more freedom, says Krawcheck.

3. Make Investing a Regular Habit

Krawcheck says you should invest on a weekly, monthly or quarterly basis. Always be dedicating some of your paycheck to investing. Make it part of your routine like a weekly spin class or going to brunch every Sunday. You can set up recurring deposits on Ellevest.

4. Don’t Get a Credit Card If You Can’t Afford one

A recent survey from Bankrate.com shows that millennials are using credit cards less and less with only 63 percent owning one. Krawcheck actually believes this is a smart tactic. “Save yourself. Pay rent on time, pay back your student loans. There’s so much bad advice out there around credit cards. If you can’t afford something without putting it on the credit card it means you can’t afford it!”

5. Investing Gives You Career Freedom

Taking control of your money gives you freedom to do what you want both professionally and personally. “The dudes are investing so they have more money,” she said. “If you invested and built up a career cushion think about the career freedom you have. If you want to become an entrepreneur you can do it! You can also tell your boss to take his job and shove it,” she said.

Former Queen of Wall Street Wants Women to Take Control of Their Finances