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MAKERS Money: Real, Non-Boring Money Talk

By Ellevest Team

Announcing the launch of MAKERS Money, a weekly show about women, money, and power, hosted by Sallie Krawcheck. Think real money talk, zero finance jargon, and wine time.


MAKERS Money is co-produced by MAKERS, the network of changemakers that spotlights the trailblazing women of today and tomorrow, and business and financial news platform Yahoo Finance.

Tune in to MAKERS Money on Thursdays at 6. You don’t want to miss this.

The six-episode season premieres 6PM EST on Thursday, February 8 on Yahoo Finance, MAKERS.com, and here at Ellevest. It will air weekly — and we’ll be archiving the episodes at Ellevest, too. Pour yourself a glass of wine and tune in Thursdays at 6. You don’t want to miss this.

Each week, Sallie will bring her Wall Street experience to answer real money questions and share some of the unwritten rules of success that the guys get taught, and the women, not so much. She’ll also talk to women who are experts on everything from networking to starting a business to finally getting that raise.

Episode 1 is all about busting those ridiculous money myths about women. Guest Yai Vargas of The Latinista talks with Sallie about getting over fears of “losing everything,” why networking is so key, and the smartest thing she’s ever done with her money. (The player will show each episode as it premieres; to see older episodes, just fast-forward to the end of each one and they'll come up.)

MAKERS Money, Episode 1: Busting the Money Myths

Sallie Krawcheck: Money is power, and ladies, it's time to level the playing field.

Hi everyone, welcome to Makers Money. I'm Sallie Krawcheck, CEO of Ellevest, the investing platform for women. What a world we are living in right now. I mean, can you believe it? Can you believe some of these headlines?

But here's something we've learned — something super important, which is that money is power. Money evens the playing field for us as women. Money is knowledge. Money is confidence. Money is freedom. Money is “take this job and shove it.”

And ladies, we don't have as much money as the guys do. We not only earn less, we invest less. This can cost us hundreds of thousands — for some of us, millions — of dollars over the course of our lives.

The good news? We can fix this. I've been in the financial services industry for nearly 30 years, and I'm going to share with you what I've learned about money, and together we're going to help you live the most badass life possible.

So let's start with some myth busting. There are things that society tells us — myths that they tell us — that keep us from being fully in control of our money. Myths that were even outdated in my mother's era.

Busting the myths about women and money

Myth number 1: Men are better at money, because men are better at math than women. No. No, no, no, no. Research shows that girls actually get better grades than boys in all subjects at school, math included. (Yes, I see you. I know you got an A minus in eighth grade algebra.)

Myth number two: We women don't invest as much as men do because we're risk averse. That's not true. It's as if the world is telling us that somehow having a uterus tucked inside our body keeps us from taking on risk. It's not true. We're more risk aware than the guys are. That means we want to understand risk before we take it, such as: How should this investment perform, and how bad might it get? Once we understand the risk, we take on no less than the guys.

Myth number three: We're not as good at investing as the guys are. Truth is, we're better. We're better because get this, we don't trade as much. Get this, we don't panic as much, because we tend to have more diversified investment portfolios, and that helps us perform better over time.

Now I could go on and on and on, but you get the idea. These myths serve to keep us women from being fully in charge of our money.

Why don’t women talk about money? Hmmmm…

Joining me for happy hour, and to continue to bust some money myths is Yai Vargas, the founder of The Latinista, a community for Latina professionals. Cheers and welcome.

Yai Vargas: Cheers. Thank you so much for having me.

Sallie Krawcheck: This is a red-letter day. When was the last time you sat down with a friend, had drinks and talked about money?

Yai: Gosh … never.

Sallie: Never. That would be exactly what I've done. Sex, yes.

Yai: Everything else...

Sallie: Kids.

Yai: Money? No, never.

Sallie: Work? Never. Never. Tell us a little bit about The Latinista.

Yai: The Latinista is the network I created to help women understand what their true value is. It's primarily for professional development. You would love this, because it's all about learning how to negotiate, understanding how to manage your money, and really understanding how to articulate your value.

Why don’t women invest as much? Hmmmm…

Sallie: I do love this! Understanding how to manage your money. Tell me what you're hearing from the women. Are they investing?

Yai: Sadly, a lot of them aren't. A lot of them aren't.

Sallie: Yai, what's the number-one barrier to investing for women?

Yai: The number-one barrier is fear. Some women are so afraid to lose everything that they don't even play the game.

Sallie: We hear this all the time. The jargon, the complexity that the investing industry putS out. It really serves to keep us women outside the game, doesn't it? What are they doing instead, putting it in the bank?

Yai: They're putting it in the bank, right. So they think that their cash is much safer where they can see it. They've worked so hard for this. The last thing that they want is to see it all go away.

Sallie: If you have your money in the bank, you're earning almost nothing, which means that on a day-to-day, day-to-week basis, you're actually going backwards, because the slight bit of inflation we have eats that away. Do you know what the return on the stock market has been over long periods of time, say, since the 1920s?

Yai: Gosh, I don't know … three percent?

Sallie: Three percent? 9.5%.

Yai: Oh, wow.

Sallie: 9.5%, so even with the crash of '29, even with the crash of '87, the crash of '07, '08, there has been a 9.5% return, right? And so the ability to earn 9.5% in equities over time historically versus close to zero ... life-changing. Absolutely life-changing.

Yai: A lot of people don't know that.

Sallie: I know! That's what we're trying to do here, help people.

Yai: That's fantastic, I'm glad that we're here sharing this information, and hopefully it'll empower a lot of people to actually take action.

Stupidest thing you’ve done with your money?

Sallie: Let's talk about you. I want to embarrass you a little bit. What is the stupidest thing you've ever done with your money?

Yai: Certainly the stupidest thing I've ever done with my money is working really hard for it, and then keeping it in the bank, right?

Sallie: So you’re one of them! Okay, let me try this. Do you work as hard as the guys do?

Yai: Oh absolutely — even more so.

Sallie: Do you work harder than the guys do?

Yai: Absolutely.

Sallie: So, you're working harder than the guys, but you're only getting, let's call it two-thirds the return over life.

Yai: It's silly, really.

Sallie: Okay, what's the smartest thing you've ever done?

Yai: The smartest thing I ever did was actually sit in front of a professional and have them help me understand how to manage my money. That's why I started the Latinista. We need networks of women around us who know better than us, right? Who encourage us to take those leaps. So the smartest thing I ever did was sit next to someone, and say, "Teach me. I'm all ears."

Sallie: And we need to talk about money. Thank you for being here, Yai.

The 5 things all investors need to know

We know you've got a lot of questions out there, so we're going to answer them, starting with some questions from our followers. First: "What are the essentials to keep in mind before I start investing?"

I'm so glad you asked. It's a question we get all the time at Ellevest, particularly from women — I think someone told us along the way we need to get a Ph.D. in investing before we get started. We don't.

Five things: Number one, I want you to pay off your high cost debt before you invest. Credit card debt, auto loan debt, anything that's costing you in the teens, or the 20s. Get rid of that first.

Number two, when you begin investing, don't try to time the market. Believe me, you can't. Believe me, the professionals can't. So don't try to pick a time to get in.

Because number three, I want you to make investing a habit. A little bit out of every paycheck, 1% of your salary, 3% of your salary. It means sometimes you're going to buy high, sometimes you're going to buy low, but it's going to even out and do strong work for you.

Number four, diversify your investments. Don't just buy one stock. That is a loser's game. Have a range of stocks, bonds, ETFs, mutual funds, but that diversity will help keep your risk down.

Number five, keep costs low. It can be difficult to see what some firms are charging. Ask them, and you want to keep your costs below 1% of your assets.

So … what the heck is an equity?

Second question, "Can you explain what an equity is?" I love this question, because this is one of the terms we hear all the time, sometimes don't totally understand. So let me break it down for you. An equity, which you often hear called a stock, means that you have a piece of ownership, a tiny sliver of ownership in a company.

So owning equity in, say, Facebook or IBM gives you the right to participate in companies’ earnings, and losses when they have losses, through dividends and/or changes in the market price. That's an equity.

One final myth — shattered

We're just about out of time now, but I have one final myth to bust, straight from our grandmothers, and that is women talking about money is crass and unattractive. Thanks, Grandma. The truth, ladies, is if we don't talk about money with each other, how in the world do we know what raise to ask for, or how to invest, or how we can close these money gaps? So we're right here. We're going to keep talking about money. We want to hear from you.

Tweet to us @MAKERSwomen and use the hashtag #makersmoney, or send in your questions to my email at sallie@makers.com. Thanks to Yai for joining us, and until next time, remember: More money, more power.

Disclosures

The information provided should not be relied upon as investment advice or recommendations, does not constitute a solicitation to buy or sell securities and should not be considered specific legal, investment or tax advice.

The information provided does not take into account the specific objectives, financial situation or particular needs of any specific person.

Diversification does not ensure a profit or protect against a loss in a declining market. There is no guarantee that any particular asset allocation or mix of funds will meet your investment objectives or provide you with a given level of income.

Investing entails risk including the possible loss of principal and there is no assurance that the investment will provide positive performance over any period of time.

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Ellevest Team

The Ellevest team is working to help women reach their financial and professional goals.