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Money Is Power: The Ellevest 2018 Money Census

A report of the Ellevest 2018 Money Census

Women Won't Be Equal With Men Until We Are Financially Equal With Men

Ellevest surveyed* 2,000 American women and men after a political year of upheaval and reckoning that included women breaking painful silences, powerful men losing their jobs, and an unprecedented spotlight on sexual harassment and assault in the workplace due to the #MeToo movement.

As a company founded with the mission of helping women close gender money gaps, we wanted to know: How do women feel about what they earn, what they spend, and how their treatment at work and in the world affects their ability to get ahead? Do men feel differently?

The results revealed that women and men shared some key values about money. But when the questions turned to equal treatment, pay, race, gender, and how those factors affect how we think about money, the answers reported by women and men diverged significantly...

WOMEN KNOW WHAT’S RIGHT, AND THIS ISN’T IT

Men’s Blind Spot: Inequality

Men Need to See Inequalities

The men Ellevest surveyed did not fully see the financial and career inequalities women encounter on the job. And the women we talked to expressed frustration about work.

Is the playing field level for women in the workplace? More than half of the men thought so, with 58% saying things were fair where they worked. Less than half of women (42%) thought the same. In fact, 48% of women think they have to work twice as hard to get half as much as men. Just 25% of men agree.

And while it’s great that 61% of men agreed that a gender wage gap exists, that number does not compare to the vast majority of women — 83% — who insisted the wage gap is real. If you’re a woman being managed by a man like one of the 39% who didn’t believe it exists, you feel it. What’s more, fully 63% of women said they should be paid more for the jobs they do.

We also asked whether the 2016 presidential election had affected people’s feelings about money and equality. For many women, the answer was yes. Their answers clearly showed a concern about unfair treatment at work and in life that was catalyzed by the election.

The top two things women said they’re doing more of as a direct result of the election are “think more about money” (46%) and “stand up more for what I think is right, at home and at work” (also 46%). Nearly as many women voiced increased concern about unequal treatment of people of color (43%) and women (also 43%). And significant numbers also reported actively voting more with their wallets: spending, boycotting, and donating to express their values.

Men weren’t as affected by the Trumpnado, as the graph above shows. In fact, the only thing men were MORE likely than women to say the election spurred them to do was “feel optimistic about their future” — 36% of men and 29% of women agreed, roughly the same percentages who reported voting for Donald Trump. Generally, men’s responses to questions about how the 2016 election affected their perceptions and behaviors were more muted.

FOR WOMEN, MONEY IS THE #1 CONFIDENCE BOOSTER

But women have a blind spot too: what they’re leaving on the table

Taking positive action with their money is a huge confidence booster for the women surveyed. The #1 thing that makes women feel in charge of their futures is “putting away money for financial goals,” followed by how much we save (#2) and how much we invest (#3). In fact, getting involved with our finances had a bigger positive impact on how in charge women feel than our educations (#8) and the support we get from our families (spouse/partner, family/parents and even being a mother or a father) (#6, #9, #10). In this way, women are just like men.

The satisfaction women get from investing, saving, and meeting their goals gets even stronger as women get older. “The amount I have invested” as a confidence booster grew from 25% for women under 30 to 31% for women in their 30s, 35% for women in their 40s, and 44% for women over 50.

And the #1 thing women told us that held them back from feeling in charge of their future was their lack of savings. Number two was “too much debt.”

The opportunities in money being left on the table are women’s blind spot. And this blind spot can be very expensive, especially when it comes to not investing. Nearly half the women we asked (45%) weren’t aware that, besides the wage gap, there’s also an investing gap, where men invest more than women. We asked women who did know about it what they thought this gap might cost them over a lifetime — and the difference between their too-low estimates and the projected cost is staggering.

The projected individual cost of the investing gap starts in the hundreds of thousands for women earning $50,000 to $70,000 a year, about 2-7 times the amount women estimate. And for the average woman in the survey, whose salary was just over $100,000, the cost of the investing gap came out to more than $1 million — or 10 times their estimate.**

The Investing Gap

Even as most women directly related working to achieve their money goals to feeling good about their future, they’re vastly underestimating how much they’re being held back by gender differences in investing — and, so, how much better they could be feeling.

Women still have a way to go before they feel confident about investing and saving. Just 39% of women said they were financially prepared to face the unexpected, vs. 52% of men. Just under half (47%) of women said they know how to achieve their financial goals; that number leaps to 64% for men.

Perhaps because so many women feel their workplace is not fair, many of the women we asked did not get much confidence from reaching their goals at work. When asked what helps them feel in charge of their futures and reaching their goals, “the amount I am paid” was only #8, while “the fair and equal way I am treated at work” and “the support I get from my boss” ranked second to last and last.

Maybe the guys aren’t seeing these inequalities because they’re feeling pretty good overall? Men reported being happier than women about everything about their money: salary, debt, retirement savings, standard of living, knowledge, et cetera.

Money is Power

NO ONE’S BLIND TO THE POWER OF MONEY

How our shared territory can point to the future

What do women and men agree on? Money makes most of us feel in charge of our futures. For everyone, the positive impact of working on our money goals beat out every other thing we asked about: support from parents, spouse and children, education, financial knowledge, and performance, pay, and support at work.

We also share goals. Across the board, most Americans reported our leading financial goals as retirement, followed by traveling and paying off debt.

And there are encouraging signs that the culture is (slowly) shifting, at least in sentiment. We asked whether people agreed with the statement, “I admire women who stand up for what they think is right, at home and at work.” Not only did most women agree (85%), but 74% of the men said they do, too. And the 61% of men who believe women about the gender wage gap deserve a shoutout.

For everyone to agree that money is key to how in charge people feel about their lives is a good start, because it means that nobody is denying that these inequalities matter immensely. We believe that the best way to build on the momentum and power of #metoo is to expand the spotlight so it shines just as brightly on economic inequalities in 2018. To start, we’ve shared eight ideas for both women and men that can help us fix our blind spots and close the gender money gaps for good.

Put another way? As Sallie Krawcheck says, "We women won't be equal to men until we are financially equal to men."

Here’s to 2018. Read the full infographic below.



Money is Power infographic

The Ellevest 2018 Money Census (the “Census”) was conducted online between November 3-10 2017 in conjunction with Chadwick Martin Bailey. Base: Women (1,034), Men (1,009), Women of Color (231), Non-Women of Color (808), LGBTQ (200) and Non-LGBTQ (968). Participants are US residents who range in age from 22-65, more than 90% of whom are above the age of 30. All participants represented having personal incomes of $50,000 or greater and were involved in managing their personal or household finances. Not all questions were answered by Census participants. The Census was funded by Ellevest.

We compared our estimates of the gender investing gap with those of survey participants across the following salary ranges: $50,000-$74,999; $75,000-$99,999; and the participant average of $103,000. For each range and for the participant average, we averaged the responses received after eliminating the outliers using an interquartile range. We assumed $0 for participants who believed there is no investing gap. These averages were compared to our estimates, which were determined by comparing the wealth outcomes after 35 years for a woman earning $50,000, $75,000, and $103,000 and a man earning 30% more, reflecting the gender pay gap (e.g. $65,000, $97,500 and 133,900).

We assumed savings of 20% of salary which grows in accordance to a gender specific salary curve provided by Morningstar Investment Management.LLC. These savings are assumed to be invested according to the asset allocations for men and women presented in the Blackrock Global Investor Pulse Survey from 2015, and rebalanced to this allocation each year. For simplicity, allocations to bonds, real estate, alternatives, and other were categorized as bonds for the purposes of this study. We assume the portfolios are held in a taxable account. The results were determined using a Monte Carlo simulation—a forward looking, computer-based calculation in which we run portfolios through hundreds of different economic scenarios to determine a range of possible outcomes. The wealth outcomes are at the 70% likelihood of achievement, and include taxes, inflation, and underlying fund fees. The investing gap is the difference between the two wealth outcomes, in future dollars. Our estimates were found to be higher than the survey participant averages by a factor of 2-7x, and more.

Forecasts or projections of investment outcomes in investment plans are estimates only, based upon numerous assumptions about future capital markets returns and economic factors. As estimates, they are imprecise and hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results.

Information was obtained from third party sources, which we believe to be reliable but not guaranteed for accuracy or completeness.

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.

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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