- Hello.
- Hello everyone.
Today we are going to be talking about a taboo topic.
- Not vaginas.
- Not boobs.
- Not trash men.
- Well they're kind of involved in there
- Yeah they are actually. - They're kind of involved .
- Yeah, yeah, yeah. - Yeah.
(beep)
- We're talking about money.
- Wealth.
- Finances.
- Dollar bills.
Many of them.
- Cash.
(both laughing)
(inquisitive music)
(air whooshing)
- Freddie and I really love taking control of our finances.
- A lot of our friendship actually just
is talking about finances and like home buying.
- Yeah.
- You know all that, sort of like.
- Assets. - Yes.
And it's something that we can control,
we just don't necessarily know how to control.
- Yeah.
- So today, we want to take control and learn how to invest.
(triumphant cry)
- Grab them by the-- (crickets chirping)
- The money clip?
- The what? - The money clip?
- The money clip? - Yep.
- (Female off camera) Grab them by the wallet?
- Grab them by the checkbook.
- Yep. (both laughing)
(beep)
- We're gonna bring in Sallie Krawcheck of Ellevest.
And she's gonna give us the down low
on how to really be (whipping crack) wealthy
(whipping crack) women.
Which is what we both want.
- That's what we want, we want lots of money,
we want to not have to worry about our money.
We want our money to work for us.
- Yeah.
- And that's what investing does.
- Yeah.
- So today, we wanna learn and we wanna get our money right.
- Let's do it.
- I'm Sallie Krawcheck and I'm the CEO
and co-founder of Ellevest.
I spent most of my career actually on Wall Street.
In my 20s, I was an investment banker, which I hated.
My 30s, I was a research analyst, which I loved.
In my 40s, I was in wealth management.
Which is helping people investing.
And all of that led me to founding Ellevest
which is an investing platform.
We focused on women, run by women,
funded by women, helping women invest.
Today the vast majority of the investing industry
is white and male.
But we're seeing increasingly people at Ellevest
are saying, I'm tired of supporting the institutions,
the companies that haven't supported me.
Not only is it good to diversify your investments,
it's good to diversify the people
who manage your investments.
All right so now I'm going to spend some time
with Freddie and Chantel and we're going
to talk about getting them to invest.
(air whooshing) - Hi.
- Hey.
- How are you? - I'm good, how are you?
- I'm good, I'm ready to talk money.
- Okay, me too, always.
- I feel like I'm more of a novice to this than Chantel.
- So Sallie, thank you for coming here
and talking to us about all this stuff
because it's really scary when you don't know anything
and you don't know where to begin.
- I know, we've been taught it's scary too.
Today, we women tend to prefer to talk about anything
rather than money, including our own death.
It starts in childhood and it becomes part of our identity
that becomes difficult to fight our way through.
My relationship to money
has kind of been very like, fear-based
so I've just always been taught like keep your money,
save as much as you can, keep it in a fund,
put it away, don't touch it.
- Right.
So there's this really (beep) interesting research
where when you speak to the genders about money,
both of them tend to think of it as water
and for the guys, it's a river.
And the money's coming in, the money's coming out,
and the level's going up, and the level's going down.
And for women, it's a pond.
And this is my money, and I've gotta take care of my money.
And it goes in one direction and it's down.
And by viewing it as a scarce resource,
right and not viewing as having the ability to grow,
we tend to short change ourselves.
- Right if you live longer
then you need to have money to live longer with.
- And the part of the advice to you that was wrong
is you need to, yes you wanna have your own money,
yes you wanna have some that is safe and protected.
But the money you have in the bank
is losing you ground everyday.
- I just wanna be as confident
as men are with their investing.
- No kidding.
Proactive action is the number one drive
of our confidence in our future.
So today, for so many women the primary emotion
around money is not independence and freedom,
it's loneliness and isolation.
And I receive these messages that I'm not good at it
and I'm confused about investing
and I don't know how to get from here to there.
Oh and by the way and I'm incredibly busy.
Oh I haven't even gone into my favorite, the latte.
Don't buy the latte, invest the money
and become a millionaire.
Oh what effing planet does that math work.
Like, no planet.
So before we get started.
- Okay.
- Where are you on your debt?
- So I still have student loan debt
and then I don't have any credit card debt.
- Great. - Yeah.
- I'm glad to hear that.
Do you know about what the interest rates are
on your student loan debt?
- Too much, that's all I know. - Too much.
- My biggest loan is just from my condo.
I'm done with my student loans.
- Wow, great.
- Yeah. - That's great.
- I was really fortunate to be able to get
a lot of scholarships and grants.
And then I have a car, like a lease.
- Right. - And, so then
I just have that. - Yeah.
- Those are my two main bills.
- Anything below 4%, 5%, let that ride, pay those minimums.
Every once in a while, call the provider,
ask to take the interest rate down.
You don't want any debt outstanding
that's above 10%, that you need paid out right away.
So take a look at that and start to,
you know, chop away at those things.
- Okay. - Okay.
- You know, you need to pay off
your high interest rate debt first,
and once you do, to begin to invest
just a bit out of every paycheck.
So it sounds to me like you're doing a lot of things right.
The thing you're not doing right,
is you have too much of your money in a bank deposit.
- Sitting.
- Sitting and losing you ground.
- Exactly. - Every day.
- Now that I've learned the good habit of saving,
I don't know what to do with my savings.
- I have an answer.
(both laughing)
- I have a pretty robust, for me, savings account.
- Great, okay.
Are you investing in the 401(k) here?
- Yeah. - Okay.
Are you getting the match?
- Yes. - Good.
- Yes.(laughs) - Good!
I keep hitting you, I keep hitting you.
Well I really like what I'm hearing from you.
- Yeah. - Okay good.
Well then lets start in on Ellevest then.
- Okay so I've started making my profile.
And so you've got two choices here
- Okay.
- You can invest in general to build wealth.
Gosh I don't know what my goals are
but I know I want to have more money.
Or we can go into, you know,
quantifying, choosing and investing for a specific goal.
All right, so stocks, bonds.
Stocks, I essentially own part of a company.
Bonds, I have debt in the company
The company has borrowed money from me,
I don't own it, it's an IOU.
Stocks, typically higher returns because higher risk.
Bonds, typically lower returns, lower risk.
Putting together those two broad asset classes,
can put together a way more balanced portfolio for you.
Right so you're not always bouncing up and down
but you have a chance for more return.
- Okay, I mean I do have at least one goal.
- Okay what's that?
- That I wanna work towards and I do want to buy a home.
- Let's do it. - Buy property.
- Okay so my main investment goals
are home and build wealth.
- In general, when you are younger,
and if your goals are further out,
you know, I'm in my 20s and I'm investing for retirement.
You wanna be more in equities.
The reason you wanna be more in equities
is because there tends to be
a little more risk to 'em, a little more upside
and the returns have historically been better.
If you can invest in equities for a 15 year period,
historically your chances of a positive return
have been 99%.
Or, you know, you have a nearer term investment goal,
I wanna buy a home in five years.
You wanna be a little less risky,
you wanna be more what's called bonds
which are debts of company.
If you wanna buy a home in the next few years,
I don't wanna give you too much risk.
Because I don't wanna put you at risk.
- Right.
- And so, you know, one of the things Ellevest does
is thinks about it in that different way
and does a highly personalized portfolio,
investment portfolio for each individual goal.
- So then essentially, I could have, kind of like
different sort of investment accounts?
- I love that! - Portfolios?
- I love that!
The least amount of money you can invest to be worth it.
Well lets just start with the least amount of money
you can invest so at Ellevest, a penny.
It was really important to me as I was building Ellevest,
that we'd be as approachable as possible,
because to be quite honest, these investment minimums
that the Wall Street firms have had, are sexist and racist.
Right if it's the white guys who've got all the money,
then it's the white guys who have access to the investing.
Let's take a look at where we are.
All right, so, there's six years
to get you to that down payment.
You have to start by investing $27 500.
And make a monthly deposit of just over $2200.
- Is that outside of bills that I have to pay?
- Oh yeah, oh yeah.
You know, you gotta make a sizable deposit
in order to get a sizable home.
Okay so what this tells you is,
if you invest with us today.
$11 798 and 97 cents.
- Can't forget that.
- But you start with around $12 000.
- Uh huh.
- You have a monthly deposit of $900.
We put it in this allocation of 36% stocks, 64% bonds.
In six years, we estimate in the
significant majority of markets,
you will have that down payment.
There's been a rule of thumb historically.
Subtract your age from 100
and that's the percent of equities,
some mix of US and international,
that should be in your portfolio.
So to me, it's some combination of what age you are
and what you're looking to use that money for.
The goal that you eventually wanna get to,
is of your take-home pay, 50% is for needs.
Your rent, you know, what you gotta pay for the car,
or your work clothes, et cetera, et cetera.
Let's not forget, 30% should be for fun.
I mean what's the point otherwise.
And 20% should be for future you.
You seem-- - Oooh, this is hard for me.
- Why?
- Is there any possibility
that I could lose money doing this?
- Of course!
There is no way to get any kind of return
without taking risk.
For in any given day, the market can go up and down,
but an equity portfolio over a reasonable period of time,
has typically gone up.
What we see is that for so many guys,
you know their salary can just be the beginning.
And they're talking to each other about investing.
You know, for women, it's the end.
You know and again, since we've received the messages
that we're not good at math and we're not good at money
and we're not good at investing
and we're not good at taking risks.
None of which is true.
And then your build wealth,
because that's a 20 year type of portfolio.
- I guess we can estimate like 12 000 a year.
So then just 12 000 times 20.
- So that comes out to 240.
You're estimated to have 463.
- Wow so by depositing basically $240 000,
I could turn that into $463 000.
- And we talked about the power of compounding.
Well Albert Einstein is reported to have said
that compounding is the eighth wonder of the world.
And what that means is that if you invest a dollar.
And then you earn five cents on it.
Then the next iteration is
you're earning a return on the $1.05.
You're earning money on money,
you earned on money, you earned on money you earned.
And so that dollar that you invest in your 20s
is worth so much more than in your 30s.
And that's how you get to that silent millionaire next door.
- To make $240 000 but to end up with $460 000.
- (banging) Now you're making my point for me.
Let's look at this build wealth goal,
you know, Chantel and I spent time on before.
So this is a over 20 years,
if you make a monthly deposit of $586,
you will have $252 000 in 20 years.
The amount that you would put in
over the 20 years is about $140 000.
We estimate that if you invested instead
in a portfolio with 89% stocks,
you'll have $251 000, $252 000 instead.
So this is what happens if you keep it in the bank.
And this is an estimate for what happens if you invest it.
But here's what I would suggest,
just start investing a little bit.
- Okay.
- You don't have to do all of this at once,
if this is giving you hives.
So I think this issue of women not investing
is many many layered.
And I think we actually have to go back to childhood.
The messages that we give to little girls
are about being careful with money and budgeting,
and little boys about making money and being the CEO.
A reason that we tend to out perform men when we invest,
is because we don't panic.
The people who shouldn't be investing
are the ones who in a moment of downturn,
freak out and take their money out.
Start where you are
and if honestly it's $10 or $100, go ahead and get started.
- (sighing) Okay.
This is an opportunity.
- This is an opportunity. - This is an opportunity.
- This is not, this is an opportunity.
- You're not putting all my money in this bag
and running off into the sunset.
- No!
(both laughing)
- First of all I wouldn't and second of all, I couldn't.
Actually there is insurance against fraud.
- Yeah.
- At any point, should I need to access that money,
- It's yours. - I just--
- It's yours. - Take it out.
- It takes a few days - Right.
- But it doesn't take months.
Your money.
It's not that women don't have money, we've got money.
But there's an industry that has really just
looked right through us.
It's just done a better for job
and they've made so much money from it,
you know, they could afford to ignore women.
And so, that time's over.
- So what we've decided, is that my game plan will be to
put a certain percentage of my savings
into Ellevest every month.
- Okay.
- And that will be for the home.
And then I will get my savings down to an amount
that I feel comfortable with.
As like an emergency fund,
if I lose my job then I could still pay rent, XYZ.
Okay. - Okay.
- I actually don't feel that bad now.
- Good! (laughs)
- I was nervous before. - You're supposed to feel good
- Yeah I feel good now actually.
Yeah I think it all just like depended on the person
and like what is like doable for their lifestyle.
- Fair enough. - You know?
- I feel like my perspective has completely shifted
because I knew that it was something that I needed to do
but I saw it as my money not being liquid
and I saw it as not being that drastic.
I don't know how it took me so long
to have a light bulb moment.
But it happened.
- Yay my work is done here. - Wow.
- Talk about money, talk with our friends
about how much money we're making.
Ask for that raise,
if we don't get that raise and we're able to,
leave the companies that aren't paying us well.
Couple of different job offers,
look up, are there women those senior roles?
Are there people of color?
Are there people in minorities in those senior roles?
If they don't, take your talents elsewhere.
Buy from women in minority-run businesses,
I mean, I think we need to break the wheel.
And we need to invest.
The other thing that's sort of cool here,
that we do at Ellevest,
is we enable you to not just invest
in what we call a core portfolio
but also an impact portfolio.
That's a portfolio in which the money
goes towards more women-run businesses,
companies that are working to advance the environment
as opposed to hurt the environment.
Companies with a social good to it.
These perceptions we've had of ourselves around money,
that society has imposed on us, are killing us!
So to smash through this and have confidence
and a sense of abundance, changes everything for us.
(air whooshing)
- So Sallie, thank you so much for coming
and teaching us so much, and showing us so much.
- So helpful.
- Thanks. - Seriously.
- Learned a lot today. - Yeah.
- Good!
- A lot.
Learning how to invest with Sallie Krawcheck of Ellevest.
- Lady tested.
- (Group) Lady invested.
♪ Money, money ♪