Our friends at Ellevest have just published a new guide to help women (and men) understand the basics of investing, all in about 20 minutes. It’s main goal is to better inform women about how to invest their money, and get the going in as painless a process as possible. It even includes a handy glossary of terms to fend off mansplainers at cocktail parties!
Written by “the most powerful woman on Wall Street,” Ellevest CEO Sallie Krawcheck, The Go-Getter’s Guide to Investing is a free click-through guide that strips out the jargon and stuff you don’t need to know, and focuses on the five most important things about investing.
The problem’s Ellevest has identified:
- Women control $14 trillion, or 51% of American personal wealth.
- However, across all age groups, women have considerably less retirement income than men; women are 80% more likely than men to be impoverished at age 65 or older.
- Women live longer than men, make less money than men (gender pay gap), take career breaks, and pay more for comparable products (pink tax). In short, women have less money than men.
- Most women don’t invest their money as much as men do, leading to a “gender investing gap.” The average female investor keeps 71% of her investment portfolio in cash.
- This puts women at a financial disadvantage compared to men because they are missing out on the potential growth that a diversified, balanced portfolio may provide.
So what keeps women from investing, according to Ellevest?
- When they surveyed professional women, and asked them why they haven’t invested yet, one of the top reasons was that they need to do more research so they can understand what they’re investing in.
- Women want to read a book, take a class, or have some sort of financial education so that they can be informed.
- Given the lack of trust for the financial industry, the importance of financial decisions, and that most of the women they talk to are educated and successful, this all makes sense.
- However, it becomes a significant barrier to fully investing, because learning about investing is just about as attractive as doing your taxes.
- From qualitative research sessions, we heard a few key things (paraphrased):
- “I just want to understand my portfolios and be able to explain how I’m invested when I’m asked about it at a cocktail party.”
- “I’ve been trying to teach myself investing for a long time.”
- “I want to be sure I have a diverse portfolio…but I don’t have time to be sure I’m allocating things the right way.”
- Women want to talk about their investments with friends confidently, or when getting unsolicited advice from others who may “know more.”
Key takeaway: women want to feel informed but don’t have the time to become the expert.
ABOUT THE AUTHOR: Sallie Krawcheck is the CEO of Ellevest, a digital investment advisor for women. Often called “the most powerful woman on Wall Street,” she’s led major wealth management firms such as Smith Barney and Merrill Lynch and was CFO of Citi. Since then, she’s devoted her life to help professional women own and increase their financial power.