Wildly successful women have a lot in common. From a steady work ethic to killer confidence and street smarts — they have the “it” factor, and while it may appear like it takes massive intellect to become successful, that isn’t necessarily the case. Thankfully, these days being a successful woman isn’t defined as just one thing. And while there are many ways to get to the top and be successful, there is one common denominator we’ve noticed among all successful women and that is money-management.
“The best career advice I can give you is to invest,” says financial feminist, Sallie Krawcheck, the founder and CEO of Ellevest, an online investment platform that aims to close the gender investing gap that’s costing women millions.
And believe her when she tells you that not investing is a costly mistake. Krawcheck 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. But it’s not just about the money, being secure in your finances makes you successful, and when it comes to your money habits, how you manage your money today can greatly impact the state of your future financial future — and investing is the smartest thing you can do with your money today.
Wait, what? Isn’t the smartest thing to do with out money is to put it into a savings account? Nope — let’s look at the numbers.
Investing vs. Saving: What’s the difference?
10% is the average annual return the stock markets have produced since 1926. This includes the lowest lows: The Great Depression, the massive slide after September 11th and the financial crisis of 2008, according to the Investor Protection Trust,
Now, let’s compare that to what would happen if you put that money into a savings account.
According to the CNN Money, the average interest rate on most savings accounts is actually below 1% — about 0.06%. You read that right. A lot of women tend to think of saving as the “safer” route, but we need to start looking at it differently. “So, if you’re making $85k a year and putting 20% of your income in the bank, you’re losing out on $1.1 million or more, over the next 40 years,” Krawcheck says. That’s a lot of money
Intimidated by the whole idea of investing and where to start? Don’t be, Krawcheck asserts. “I’ve spent my entire career in the investing industry. I ran Merrill Lynch and Smith Barney and I now run Ellevest. Believe me when I tell you that investing isn’t as complicated as it’s made out to be. It can be as straightforward as making investing a habit, some amount out of every paycheck.”
For all of us women, closing our gender money gaps is essential, and the first step is being in control of our finances, and taking financial control starts with a financial plan. Unlike most investment firms, Ellevest offers free financial plans to all users — regardless of whether or not they invest through the Ellevest platform. The best part? There’s no minimum investment, so accumulating wealth can become truly accessible to women at all points throughout their career.