Fortunately, there’s a lot of career advice out there these days from successful women looking to lift other women up with them. Ask for the raise. Negotiate from the moment you get your job offer. Get a mentor; get a sponsor; build a personal board of directors.
I could go on.
But one of the most important pieces of career advice for women isn’t being shared. It isn’t really being talked about at all. And that’s to invest the money you earn. In a diversified investment portfolio. Some amount from every paycheck, like clockwork.
In theory, investing money is a no-brainer: You put a percentage of your money away and let time (and compounding) turn that loose change into a small fortune.
Why wouldn’t you do it?
Unfortunately, the truth is the majority of women aren’t investing their hard-earned cash, and it’s a hugely costly mistake.
The recent market lurches can be enough to give any investor pause: Maybe just keep your money in the bank? Nice and safe. Wait to invest. Ok, but.. there’s a price for that safety.
That’s according to Sallie Krawcheck, the co-founder and CEO of Ellevest, the only women-focused investment platform. The seasoned Wall Street veteran asserts that the gender investing gap — the notion that women invest less than men — costs women at least $750,000 over the course of their lives. ** Depending on your salary and the market’s performance, the real cost of the investing gap over a 35-year career span could be more than $1 million. (Yes, I just said a million).**
Not having as much money as men can keep us in relationships we may not want to stay in, can make us stay in a job we don’t like, and can cause us to miss out on opportunities (like buying a house or starting a business).
To help women (and men) attain that financial freedom, Krawcheck found Ellevest, which follows a goal-based model of investing. What is goal-based investing? It’s when users’ investment portfolios are customized based on the specific goals they set for their lives, such as having a baby, buying a house, or starting a business.
If this is your first-time investing, we’ve done the hard part for you. We asked Krawcheck, to explain exactly what you need to know to multiply your savings with minimal risk, starting with $5, $500, or more.
Here’s how to get over your fear of investing and turn your savings into a small fortune.
1. The Facts and How You Can Start
Here are the facts: women live longer, we earn less, and we need to account for that when preparing for the future. So, ask for that raise you deserve (how to do that here), negotiate when you’re applying for that job, set a budget for yourself, talk about money with friends, partners, colleagues, family, and start investing regularly. If you aren’t sure where to even start, follow these two steps:
First, figure out a reasonable amount of money to invest (we recommend the 50/30/20 rule). Next, find a firm that’s a fiduciary (meaning they must recommend products and strategies that are in the client’s best interest.), run by experienced professionals, which charges fees lower than 1%.
Then, get yourself invested in a low-cost, diversified investment portfolio. Invest in it on a regular basis, and don’t look at it too much. (If you look, you’re likely to, you know, do something, which can often be the wrong thing at the wrong time.)
Try it now: Ellevest is fiduciary, and their number one goal (24/7/365) is making investing a better experience for you. It’s that simple.
#Enroll In a Retirement Fund
Here’s the thing: We women have very clear financial goals — ones that are different from our male counterparts. According to a recent survey, a staggering two-thirds of women say that their main goal is to save up for retirement.
But women aren’t just looking forward to a cushy future: 59% want to stash away enough savings for traveling, and 44% are eager to pay off their debts. There’s a little problem, though. Less than half of these women, 46% to be exact, believe that they know just how to achieve their various financial goals.
The truth is: saving and investing — even if it’s $5 a month – can have huge economic impacts over a woman’s lifetime. So, if we’re not investing, we’re doing most of the hard work around money (going to work, landing the big client, getting the raise)…. but we’re only getting about half the reward.
Did you know waiting to invest could cost you up to $100 a day… yeah. If your jeans were ripped and benjamins were raining out, how long would it take you to get it fixed? That’s what we thought. Get started today. You don’t need thousands of dollars to start investing. In fact, you can start with as little as $5 with Ellevest.
But doesn’t investing involve tons of work and learning lots of jargon? And doesn’t it open you up to losing all your money, you might be thinking.
No. No-one has ever lost all of their money investing in a diversified investment portfolio.* Quite the contrary. Investing can build your wealth….not by a little, but by enough to make a real difference in your life.
The numbers: if you’re earning $85,000 a year, saving 20% of it annually (as personal finance experts recommend), and putting that money in the bank – after 40 years, you will have saved $1.5 million. That’s great, but….
If you instead invest that same amount, in a diversified investment portfolio (Ellevest can do this for you), depending on markets, in 40 years you can have another $1 million, or $1.7 million, or more. (Ellevest calculated this using up markets and down markets, and you end up with these amounts the majority of the time.)
Try it now: Be a woman with a plan. Invest with Ellevest in Under 10 Minutes. Simply, head to the Ellevest website, tell them about yourself and your life goals in 5 short steps, and they’ll suggest personalized investment portfolios based on your goals.
The Future of Women and Money
Remember those days when investing felt like it was only reserved for men in suits, spewing incomprehensible jargon? Those days are definitely over. Investing is about working toward building wealth smartly and steadily so that you can achieve even your craziest goals.
Ok, fine, you may be thinking, I get how that can help me when I’m retired. But aren’t we talking about my career? What about me right now?
Here’s how: It should come to no surprise that money is the number one source of stress for us. It’s not because we’re materialistic. Having a plan for your money can help relieve stress and give you the confidence you need to pursue financial goals — like finally buying that dream home or taking time off from work. And if you’re concerned about money, you can lose two weeks worth of productivity a year worrying about it.
Take action to be in greater control of your money, so you can do a better job in your job.
Try it now: We’re asking you to focus on your own economic empowerment. When you open an Ellevest Impact Portfolio, Ellevest will give $100 to the first 1,000 supporters that sign to help you reach your goals.* Yes. $100, no matter what amount you decide to start with.*
Don’t Let Fear Hold You Back From Investing
I know what you’re thinking: If money is so precious, why gamble it away? Krawcheck hears this all the time, “I want to invest, but I don’t want to risk losing everything.” She get it. And this can certainly happen if you’re investing in individual stocks or bonds.
“But did you know it didn’t happen in the 2007/2008 downturn? It didn’t happen when the internet bubble burst in 2000. It didn’t happen in the Crash of 1987. And it didn’t happen during The Great Depression,” Sallie Krawcheck.
That’s not to say that some people didn’t lose a lot of money. But if you have a diversified portfolio, it’s unlikely that you literally would lose everything you have. For that to happen, the external events would have to be dramatic.
Yes, investing is uncertain. But the one thing that is certain, says Krawcheck is that a dollar in the bank today will be worth less than a dollar in the bank tomorrow, so get it out of the bank and watch it grow.
Try it now: New to investing? This can help. You can speak with an expert financial advisor at Ellevest on topics ranging from how to get rid of debt to tips to investing. Plus, start as small as you’d like – there’s no minimum deposit for Ellevest Digital, meaning you can start investing with as little as $5 – just get started.
Yes, You Have What It Takes
Here’s one of the reasons that we tend to think of investing as risky. We imagine investing as a one-time thing. I invest, and then the market either does well, or it doesn’t. I win or I lose. But that’s not the successful way to invest. Instead, the best strategy is to invest over time, a bit every month or a bit from every paycheck. And that way, the “decision to invest” isn’t as daunting.
Start as small as you’d like – there’s no minimum deposit for Ellevest Digital. You can start investing with as little as $5 – just get started.