U.S. women own just 32 cents in financial assets on the dollar compared to men. So when women make mistakes with their money, they often feel the impact more significantly than men do, according to Sallie Krawcheck, co-founder and CEO of Ellevest, a digital investment platform for women that recently raised $53 million in Series B funding, with women representing two-thirds of its investors.
“On a relative basis, women have less money than men,” said Krawcheck, who was the former head of Bank of America’s Global Wealth and Investment Management and was frequently referred to as “the most powerful woman on Wall Street.”
The disparity is due to many factors, from the gender pay gap (women earn 83 cents on the dollar compared to men) to different investment approaches. For example, men tend to have a higher risk tolerance when it comes to investing. In contrast, women are more attracted to goal-based investing and investing to make a positive impact. That’s great, explained Krawcheck, but it can also mean women simply aren’t as confident making decisions about where to put their money.
Krawcheck has made her share of money mistakes in the past too. And she hopes other women can avoid her missteps on their own financial journeys.
“Once you’ve had the kind of ‘can’t believe I had it’ career that I’ve had and see that [there are so many] women stuck in marriages because they don’t have enough money to leave and stuck in jobs that aren’t fulfilling, you know that you need to apply your experience and find a way to be part of the solution,” Krawcheck said.
Here’s what Krawcheck has learned:
1. Don’t outsource the management of your money to your spouse
Despite Krawcheck’s career on Wall Street right out of college, she left the management of her family finances to her husband when she was in her early 20s. The couple took on traditional gender roles, where he oversaw their money, and she was in charge of putting dinner on the table and planning their social calendar….
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