October 10, 2018 • 41 mins
Financial Feminist Sallie Krawcheck addresses fears often attached to affording You Turns as they happen.
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Speaker 1 (00:01):
You've you've had the good fortune I've had to then
say all right, thanks, good night Cleveland. Okay, this isn't fair.
It isn't fair because in helping women to invest and
therefore getting more money to the hands of women, we
hope is they earn the returns investing, we make the
world a better place, a lot better place. Hello, thanks
(00:32):
so much for listening. This is you Turns, the podcast
about change and all those things that that entails, all
the windy ways and obstacles get thrown on our path.
And today the obstacle we're going to be discussing is
your finances. I'm Lisa Oz and I'm Jill Herzig. What
are we doing. We're here with an amazing guest, Sally
(00:55):
crow Check. Hi, Sally, happy to be Thank you so
much for joining us. She is the best selling author
of Own It The Power of Women at Work. UM.
She has been called and I believe she is a
financial feminist UM. And you see that in her latest startup,
which is called el Vest. Elvest is a digital investment
platform for women. And the way I look at it,
(01:15):
it takes you turns into account. It looks at the
way women's lives tend to twist and turn the decisions
we make the the realities of our lives and whips
that into a nifty algorithm that helps create an investment strategy.
So we get richer if you invest with elvest. So
(01:37):
have I got that right? Sally? Have I got the
mission right? Well? The mission really is to help women
become wealthier and have more money. We know that in
a capitalist society, money is power. We know that men
have more of it than we do. We know that's
led into a lot of this me too moment that
we're having, that that disparity and wealth um and a
(02:01):
lot of folks are focused on the gender pay gap,
which is very important, but a few years ago it
struck me that there are very few people who even
knew there was a gender investing gap, or we're focused
on closing it, but that gender investing gap, women investing
less than men, women keeping more of their money in cash,
can cost your your female listeners, certainly hundreds of thousands,
(02:22):
for some of them millions over the course of their lives.
I mean, that's life changing. And you know, as we
did the research, it was clear, just like so much
the medical research and the research on cars, is done
by men for men. We recognize in an industry in
which financial advisors are eighty six percent male and traders
are nine percent male, they built the business for men
(02:42):
and in obviously might not shove I know well and
in obvious ways. Right on the one hand, it's focused
on outperforming when women are much more focused on reaching
their goals. And on the other hand, to your point, um,
you know, the algorithms they have built are four men,
which means when women take more career breaks and men do,
and it affects their lifetime earnings, um, and so how
(03:03):
much they can invest. When women's salaries speak sooner than men's,
when women live longer than me, and not taking those
into account is hazardous for women's financial lives. And we
are the only the first, were the only firm to
do that. What I loved one of the things that
you talk about is we're pushing for equality with men
in terms of salary levels, but you're more about taking
(03:25):
into account the differences, the difference in flow and pattern,
rather than trying to duplicate the pattern of the mail work.
You you say, embrace the fact that there are differences
and optimize it for a woman, rather than trying to
pretend that you're a man in the workplace. That's right,
and we still want to keep pushing in the workplace
to make more money, but we better not in our
(03:46):
investments assume you know there were men when when we're women. Um,
and so we we change the investing platform in several ways.
Is mentioned men are much more focused on winning and
out performing, and we found it just leaves women cold.
Of the thousands of women we did research on when
we asked them, what's your goal, only one set to
(04:08):
outperform we all. We also discovered things like that, you know,
if you ask a man what his risk tolerances, he
will answer he doesn't know the answer. Nobody does until
you go through a financial crisis. But he'll give you
an answer, and a woman will retreat and she'll try
to figure it out. Well, wait a second, you know
as a fiduciary, and a fiduciary means that we are
(04:29):
obligated to put our clients interest ahead of our own.
We shouldn't be asking them a question we know they
don't know the answer to. We should be telling them
and using air quotes, telling them how much risk they
can afford if they don't have an emergency fund. They
can afford no risk. If all they're going to do
is retire, they can afford to have a higher equity
component of their portfolio, which we built for them. We
(04:49):
don't make them do that, um, so that they can
have the opportunity to earn the higher returns over time,
because they've got a long time to make up any
volatility in the market. If the market goes down, they
had that opportunity, and so they can earn give themselves
the opportunity or in the higher returns. That's my job, um,
that's the job of Elvis to determine how much where
someone should take. We shouldn't make it their job to
(05:11):
tell us what they want to take because they don't
have the they don't have the decades of experience that
we do. Quite frankly, I think that must come as
such an incredible relief. I feel relief just hearing it
from you, that you know that there are experts out
there who are going to look at my life and
some you know, get some information from me and say,
you know, here's what we recommend. Just makes all kinds
(05:32):
of sense. You know, before you took this turn towards
feminist finance. You worked at the absolute highest level on
Wall Street and the Ultimate Boys Club. You were c
Suite level at Marylynch City Group, Smith Barney High, basically
highest place woman on Wall Street decades and decades. You
shared your own me two stories, um which would take
(05:55):
the pain off your car. Frankly, and you. I think
it took you a while to share, are them? You said?
Because you just copd with it for so long that
you were you know, you grown thick skin and you
you know, moved along from it. So first I just
want to thank you for your honesty about that. Every
woman who's come out with a story has been helpful,
(06:16):
and just your honesty in general. You were famously on
the cover of Fortune magazine with this headline, the last
Honest Broker, because you took a risky and honest position
that that actually helped protect investors money. But you're just
honest as a person. It seems like because I was
reading your book, you know, I'm focusing on transitions, and
(06:36):
you are dead honest. You know about finding yourself on
the couch in sweats in the midst of transitions, you're
honest about and the glass of wine, the glass of wine.
Perhaps the best detail of all. There was not just
one glass, all many glasses of wine. Can you just
talk to us a little bit about that you turn
(06:57):
or any other you turn that you know you feel
like from so so many Um, Because I would say,
and you know everybody you know, we we know this intuitively. Um.
You pointed out I had a level of success. I
had a high level of success. I also had very
public failures. Um. And those two those that's you know,
(07:20):
two sides of the same coin. If in order to
be successful and to really stand out, you need to
take some real business risk in order to do it.
I mean maybe there are people who are promoted for
just staying in the middle of the pack and getting
a bee and not raising their head, but not a
lot um. In order to be promoted, you need to
have a different strategy about a business, take a risk
(07:43):
about a business. So you know, it's when I ran
sand for Burns team back in the day, we had
a very different strategy from the rest of all Street
rather than having our research channels also be for a
time investment bankers. And I won't go into detail, but
suffice it to say that is a fundamental conflict fundamentally,
let's do a good job for one of those clients
while also doing a good job for the other clients.
There's a fundamental conflict. I took us out of the
(08:05):
investment banking business. Was called a dope. You know, Oh,
the girl doesn't get it. And then you know, over
time it became clear that that conflict was really manifesting
itself in poor, maybe fraudulent UM advice to individuals and
institutional investors. And because we had seen that, because the
industry stumbled so publicly, I was on the cover of
(08:26):
Fortune magazine, UM that same client focus. When you know,
in the crisis of oh seven oh eight, I was
running Smith Barney UM. We had missold products to our
clients that we literally, really honestly thought were low risk.
We sold them as low risk, and it turned out
they were high risks. They were supposed to lose eight
cents in a bad market. They lost a hundred cents
(08:47):
in a bad market. I fought to reimburse the clients,
so sort of the same thing, right that client focus.
We did reimburse the clients, but my boss was against it.
The board overruled him, and I was fired for it.
On the front page of the Wall Street Journal. Um,
and so the same thing. You know, it's so fascinating
because I've sort of been the same person probably since
I was twelve or so. Um, But the same drive
(09:11):
of let's let's be super client focused. UM, let's step
away from the pack and do take that to its conclusion.
You know, that means getting out of a lucrative business
that doesn't serve these clients. That means returning client money,
which nobody ever does if you are wrong, um, and
admitting your right. Um. You know, at least in this
(09:37):
this you know, several decade period. But the same thing
that that led to success led to failure. And you know,
we can argue whether getting fired was failure in that case,
but it sure felt like it. It's sure embarrassing. It
was bad. Yeah, hence the couch for a little while. Yeah,
I mean, you know, you go from there's just this
(09:57):
weird series of moments when you're in a job like
that and you're honest to goodness scheduled from seven am
through to dinner. Um, I mean, honest to goodness. Guys.
I used to have to ask my assistant to finish
meetings for me five minutes early so I could go
to the bathroom the day back. Anybody like that and
(10:18):
that may not be your cup of tea, but that
was my life. And to go to a complete screeching
halt of literally the next day, you have nowhere to
be like literally, So, so how did you get I
mean just personally did take pretty much strength? Um, did
(10:38):
you have an epiphany through the wine? Well? The first
I have to tell you that I didn't come to
it very quickly because I immediately took a job running
Merrill when it came to me, So, you know, I
really didn't experience much growing and learning the first time
I got fired. But wait, there's more because I got
fired again. Don't worry, You're on one of our story.
(11:00):
Did not learn the lesson the first time, but you know,
the karma or the universe arranged for you to get
fired again so you could do it. I was like, oh, honestly,
there was a bit of in that time in Meryll.
I was we turned the you know, I was brought
in to turnaround Meryll after Bank of America bought it.
We turned the darn thing around. And then two years
later they came and said, we need a different skill
(11:20):
set I'm like, what, thanks for turning it around. We're
going with a with a white guy, right, awesome. UM,
My boss just really wanted to it seems, in looking
at his moves, wanted to surround himself with people he
was very comfortable. He was much more comfortable with UM.
And so a few of us UM were fired. That
one actually sort of hurt more because it was there
(11:44):
was a sense of but I followed the rules. The
business was growing, we were gaining share, we were beating plan.
I did what I was supposed to do. I sort
of knew I wasn't your best friend, but you fired me.
That's not supposed to matter that, you know, like that
through my world upside down, And I tell you I
I drank some more. The real way I got through
(12:07):
it was one I recognized how fortunate I was that
even you know, getting fired on the front page of
the Wall Street Journal is embarrassing, but it's also sort
of cool. Yeah, right, you're famous, you know, you just
but not a lot of people get to do that.
And so you're saying, you know, in terms of life events,
(12:27):
that's kind of awesome. UM, And you know, look, and
I'm a big girl. We weren't going hungry happily right.
I I figured I could find something else. But I
did have a lot of people say to me, you'll
never get another big job. So there was a moment
when I thought this is it. And I had friends
who said, moved back to Charleston, South Carolina. Quit doing
this to yourself. Um. There were a few moments, but
(12:50):
it was really moments. It wasn't ours, and I said,
I'm not going away. Um, I'm I'm gonna build something
different and I'll do it in a different way. That's it.
So that's probably gonna lead us to we'll come back
to that one second thing. Before the break, we were
(13:16):
talking about Sally's pivotal moment. Now, it took getting fired twice,
but one of the things you mentioned that struck me
was you said that financially you were in a good place,
so you could have moved back to South Carolina. What
you weren't that gave you the luxury of reflection and
(13:37):
of reinventing yourself. And I think for a lot of women,
we want to make changes in our life. We want
to be brave, we want to see the writing on
the wall. But if we haven't, we if we had,
If we haven't given ourselves the financial question, that financial
cushion was, we haven't made the right decisions. We'll stick
(13:58):
in a terrible job, in a bad marriage, will make
really lousy decisions because we don't have that financial freedom.
And you mentioned your book a bunch of mistakes that
women make, and I just want to run through some
of those that are so our listeners can avoid making
those mistakes, so that they're able to grow when they
want to and they're not stuck just for monetary reasons. Look,
(14:20):
you're making an important point. You know, we sit here
taping this as you know, the me too movement continues.
I mean, every time you think now the stories are
going to peter out, here they go again. Number one.
Number two. I really think we haven't explored something that's
really important in this country when we think about women
and work, which is the amount of productivity we lose
(14:41):
by working for bad bosses who are never going to
promote us. Right, all these self help women books, you know,
I'm Gonna know my worth and I'm gonna power pose
and I'm gonna whatever, never gets to an issue that
there are a lot of bad bosses there and we
tend to stay um and we tend to lose the
promotions and lose the money and lose use everything. And
(15:02):
underlying this to your point is money and that the women,
the brave women of me too. We're not in general
financially independent. So some of the actresses were no doubt
about it. But you know, Susan Fowler who up ended
Uber is not financially independent. The women at Nike who
have upended the leadership team of Nike are not financially independent.
(15:24):
Their financially stable, financially stable, and so they have got
probably the three months of money that's in an emergency
fund UM that enables them to say, if you're going
to fire me for speaking out, you know, I can
walk out of here and find myself another job and
(15:44):
not have to worry, right Whereas if you're living paycheck
to paycheck, you just don't have that option unfortunately. So
at el us we recommend we're an investing platform, but
we tell everybody before you invest with us, please you know,
put together, you know, get three to six months of
your take home pay into what we call an emergency fund.
We provide that for free at els because it's so important.
(16:05):
Once you do that, then begin investing a portion of
your paycheck. In theory. The right way to do this,
by the way, is fifty of your take home pay
should go to needs. Gotta pay rent, gotta get gas,
should go to fun because you've gotta have fun. Thank you,
you got to buy the feather boa even though you
know you don't want. You gotta go to dinner with friends.
(16:28):
Should go to grandma. You my grandma you is named Esther.
I don't know if you have a name for your grandma,
but my grandma is Esther. And that's putting it aside
into a diversified investment portfolio. Of course, I do that
through l vest, and that gives me, you know, the
financial security I need that if things go awry, I'm
able to make a change. I'm just now distracted thinking
(16:52):
about what I would name my grandma. Well, I'm just
thinking that most of the women I know, once they're married,
kind of delegate all of that responsibility to their I
don't know any women who are not single who have
separate accounts. You don't invest with your husband, You don't
do taxes with your husband. No, no no, no, I do
(17:14):
those things. I do those things. We have a lot
of joint money and joint handling of money, but I
am never out of it. You're involved, but you don't
do you? Would you have a separate investment platform? Is
that important to those? I mean? Must you keep your
money strictly separate? So here, here's what I would tell you,
and you can decide whether it's important or not. Um.
(17:36):
We women live six eight years longer than men do.
Of us manage our money on our own at some
point in our lives, whether we want to or not.
As you know, nearly half of marriages and the divorce.
I my first marriage was supposed to be my last marriage.
It was going to be my last marriage, and he
decided to have an affair with my friend. I'm in
(17:57):
a second marriage, and I'm really super confident and he's
not going to have an affair with my friend, just
as confident as I was with my first. I hope
you're not friends with that girl anymore? Oh God, no,
just keep her away. Is really funny, isn't it? Because
I can I can now see him and talk to him.
It's a weird thing we do with women. Right with her,
(18:18):
I'm just so mad with him. I'm like, thanks for
doing me the favor bud because but with her, but
you were my sorority sister. What. Yeah, there's a special
circle of health I personally believe. I'm sorry, it's a
different level of betrayal. It really let me keep um.
They're called individual retirement accounts for a reason. They're not
(18:40):
joint retirement accounts. And so you know, please if you know,
if you decide to put your money together for expenses,
I totally get if you decide to put your investments together.
I'm not sure as bersark about it, because women tend
to be better investors than men, because we tend to
trade less and panic less. But fine, but you should
you you should have separate retirement accounts because you, in
(19:03):
all likelihood will live longer of women die single, and
so you need to be at a place I would
you know, argue that takes into account that you live longer.
Right gets you to you know, some of the investment
firms out there look to get you to seventy percent
of your pre retirement and come we get you in
n Why because your healthcare costs are going to be
(19:24):
more than you think and you might live even longer.
And by the way, esther is a badass has the
rocking Esther right, Harley, you need Harley money, don't you.
And she actually she's a cougar. A my younger boyfriend,
and he might have expensive tastes and you know them. Yeah,
(19:47):
that's exactly right. I mean, I've married older men and
it'll be Esther's turn. That's that is fantastic. I love it. Okay,
So I guess you one of the things, as Lisa says,
when we want to make a change, UM, money can
(20:07):
sometimes seem to keep us trapped. Um. And this emergency
fund would be freeing, I think. But it's it's not
all I mean, there's even if you have that emergency fund,
there's money fear. I mean, you know, I've mentioned this
on this podcast. I moved out of publishing. I'm kind
of looking for my next thing. The hardest thing for
(20:30):
me in the first few months after I left my job,
although that thing about going from a super crowded schedule
to zip that what that was weird. The sound of
silence was very strange. Um, But the hardest thing for
me was not clocking that paycheck. Psychologically it it um,
it just chilled me to the bone. I will I
(20:54):
will admit that I stood in the shower crying one
day because I just thought to myself, I'm not doing
this anymore. I've been supporting myself and my family. I've
been I've been keeping us safe and warm and keeping
our dreams all tucked in, and I'm not doing that.
It's our identity and it just I gotta say it.
(21:15):
Not a not a great shower moment for me, and
it and it hung over me. So how do we,
in your terms, how do we sort of handle that
that feeling. Here's here's the thing. We're getting into big
karma karma issues. Um, there is so much shame and
weirdness around money. Yeah, emotional like crazy. You were in
(21:37):
that shower and you were feeling shame because at that
point not for the rest of your life. You knew
if I pulled you out of the shower and told
you off and said, do you think you're ever going
to our money again? Yes, but there was a sense
of I've let people down. I feel shamed. Guess another
time women feel shame around money when they make money
spouses more than their friends. We you know, we we
(22:02):
actually have a new initiative at l VEST which we're
calling hashtag disrupt money and if you go all the
way back to the beginning, um, and we were to
form a society, and we were to form institutions that
would keep money out of the hands of women, that
would keep power out of the hands of women. We
would do things like, Hey, daddy, how much money do
(22:25):
you make? Sweetheart? We don't talk about that. Hey, mommy,
how much did we pay? That's not a topic of
conversation in our household. We would grow up, we would
read magazines that would infantilize us around money. What's your
money type? Um, hey, and put it in the bank.
I mean, can you imagine if on CNBC Jim Cramer
turned to Dylan Ratigan and said, what's your money type?
(22:47):
Let's take a quiz, right, Let's see quiz and find
out our money type and what your money emotions are.
It infantilizes us. We have made money so weird that
we women. If the three of us after this podcast
asked head out for a drink, we are much more
likely to talk about sex than money. And you think
you think men don't have the same level of shame
(23:08):
and repression that we don't. Okay, men, For men, more
money is better no shame, right, I mean maybe shame
if you see men when they lose their jobs in
our narning become depressed to a greater degree than women do.
But for men, more money, more power, more testosterone, more winning, more,
(23:28):
you know, for us for women it's it's either way.
You feel shamed. You know. I have a couple of friends.
I can think about like three couples off the top
of my head where the woman made significantly more money
than her husband and it has been really hard on
the marriage. There's yeah, I think there's less sex well
totally because it's kind of emasculates the guy if he
(23:51):
feels like yep. And then because that's what our society
has made it be. And then we overcommensate in the
home and do more laundry and take care more of
the kids, and then we feel the rage, which is
not very sexy. So what do you do if you're
a successful woman, how do you how do you fix that?
You've got to get over you know, this is where
(24:13):
we need to as we talk about disrupt money. Um,
we need to talk about it with our friends. Otherwise,
how much how much of a raise do you know
to ask for if you're not even talking about it, right,
you need to get advice. How did you get this raise,
where are you investing, how are you spending your money,
and just get rid of the weirdness of it. And
(24:34):
then what we really need to do is buy from
women owned companies, invest in women owned companies, invest in
companies that advanced women. You know, I know that sounds
a little what I don't know about that. Invest in
women owned companies. That seems weird. Well, if you're not
investing in women owned companies, you're investing in men owned companies,
and that's amazing. But but women own companies outperform men,
(24:59):
have better returns, Women pay back their loans more quickly.
When women have more money, they put more into their community,
they give more away to nonprofits. So this is positive
ripple effect. And so instead of being invested in men
owned companies, okay, how about we just put women and
make the world a better place? Okay, really practical question.
What are some when I'm looking at things to invest in,
(25:21):
I look at like Apple and Amazon because they keep reason.
What are some women own companies that I could go
invest in right now? Because that's not advertised by the
way on the you know on the Decker table, I
don't want you to invest in individual stocks, you don't.
You please stop. It's done very well so far those
two in particular, what you've done is you've increased your
(25:42):
risk right there. One of the great um tenets of
investing is diversification. And you know, if you invest in
a single stock, it could well do very well, like
Apple did. I was highly invested in a single stock
City Group, that's where I work. It felt really good
when it was at fifty four, and it felt really
bad when it was at less than one. And it's
(26:05):
a lot of risk, and you know, it feels like
they can't go down. But look at what's happened to
Facebook lately. So anyway, that's my little lecture points. But
where where how do we find out if if it's
a woman owned company? So a couple of things, UM
we have the only you know, different from everybody at LBS.
We recently rolled out last Impact portfolios and those UM
(26:27):
give you the option and you can invest in the
the the traditional portfolios or these new ones. They give
you the option to check a box that will send
your money to invest more in women owned companies, get
money in the hands of women to start, you know,
bus small business loans help in communities for things that
help women advance, such as more nursing homes, more nursery schools, etcetera.
(26:50):
So that's one option. If you don't want to invest
with LS, which is totally fine. I mean, I don't
love it, but it's fine, go to us anyway. UM,
if you go to ls dot com, slash disrupt Money,
there's a resource guide there that will give you the
names of women owned companies UM that you can buy from,
(27:12):
invest in, etcetera. So we pulled it together for you.
Thank you, thank you, and I love that you that
you say, listen, maybe you don't care about a better world.
He's just because there are people that don't. When it
comes to their money. These companies outperform other companies. So
just just do it for esther. If that's no shame, right,
(27:33):
no shame. If that's not the way you want to invest,
what I would say is that you know, ten years
ago this idea of but what we're talking about right
now is impact investing. Impact investing and impact investing is
I want to invest my money to earn a return
but also have a positive impact on the world around
me in this case by investing in things that advanced women. Historically,
(27:56):
impact investing was viewed as a return depressor. If you're
doing good for the world, you must earn less money.
And if you talk to your uncle Joe at dinner tonight,
he will tell you this at length. He will go
on you know, Joe does he bore the freaking pants
off of you talking about how you know you have
to give up return. That is no longer true in
(28:17):
my opinion that the research is now telling us that
doing good in the world does not have to mean
reducing your returns, and I personally believe it can do
the opposite. All right, well, I want to ask you
something that we'll get into after the break. When is
it okay to pour some money into a U turn
that you want to make? When is it okay maybe
(28:38):
you're going to tap your elvest account to invest in
something you care about. I'm gonna take a quick break
before the break. Joe had a very pressing question because
I think she's about to make a big investment. Oh
(28:59):
what are you buy? It depends on what Sally tells um.
So when is it okay to tap into that investment
to take a risk to to invest in yourself in
a different way whenever you want. One of the ways
we help you invested Elvest is towards a goal. You
probably are familiar with the research that says that if
you just dream about doing something, your chances of doing
(29:22):
it are close to zero. If you write it down,
your chances or if you invest behind it, your chances
are through you know, through the roof, in my opinion,
and so at Lavest you can different from others. You
can invest in I want to start a business, and
I want to start a business in five years, and
will advise you how there's how much money you'll need.
(29:43):
I want to have a baby, Here's how much money
you'll need. Um, I want to have big splurge. So
obviously you have to you know, in order to sort
of take a U turn, you need to have that
emergency fund of three to six months. Hopefully you've invested
money so that you've got you know, X tens of
thousands of dollars or hundred whatever it is that is
(30:04):
available for you to start that business where you're not
going to get paid for a year or two um,
and enable you to do that with some confidence. But okay,
so what if you haven't, I mean, what if you're
talking about taking out a big loan. What if you're
talking about more putting a second mortgage in your house
and and there's risk involved. Where do you land on that? Well,
it depends on how passionate you feel about the idea. UM,
(30:28):
And there's really a spectrum. I have a member of
my family, UM, not immediate not immediate family, but extended
family who wants to be an entrepreneur and quit her
job and is looking for jobs to be an entrepreneur.
Good luck, good luck? Right? I mean, I don't even
know how to advise that. UM. On the other hand,
(30:51):
if you have an idea that you are so crazy
about that you're dreaming about it, that you're talking to
people and you're boring them with it, UM, you just
you know it's it's you're doing research on your time,
then go do it right. Because being an entrepreneur, as
one who has both run Merrill Lynch and been an entrepreneur,
(31:13):
I will tell you, and I'm the only one who
can tell you this, it's harder to be an entrepreneur
than running Merrill Lynch and be passionate about it. Oh
you know, here's something I sort of think, Please don't
mortgage your house for that. So this is this is something.
This is a you turn. You're you've lived, you're living
right now. You've kind of you put all your chips
(31:35):
on this idea, and you feel very passionate about it.
How does it feel terrifying? So you're here, this is
how terrifying it is. Okay, this is how terrifying it is.
I was in an executive position at City Group during
the financial crisis. I will never forget having the Federal
(31:55):
Reserve of the United States of America call me and
pull me out of a eating and asked me about
the whether we were seeing a run on the bank.
I mean, this is like depression era stuff. Okay, that's terrifying.
I would go home every night at eleven o'clock and
I would sleep like a log until five thirty, and
I would wake up and go do it again at elvest.
(32:17):
I go home, I toss in turn, wake up at
three thirty. I worry about everything go wrong. You know,
I slept during the financial crisis, but this you wake
up because the you know, because at the end of
the day, the personal responsibility is so great. We got
much closer to a financial meltdown than anybody realizes. But
(32:41):
it wasn't going to be my fault, right, And this
is your baby, this is yours. Yeah, this is you know.
I've got sixty people who have left other jobs. Every
one of them could be in another great job someplace else,
who have left to be part of this journey. And
you just and they've got families and you know we're
not making money. Yeah, and you you feel response. I mean,
(33:04):
they're all big girls, they all did this knowing, um,
but you feel that personal responsibility for them. You know,
we got men to we we love diversity, so we
allow men to work at all of us. That's generous
of you. You suggest trucking the way you spend your
time the same way that you track spending our money.
Could you talk about that a little bit and how
(33:24):
that might help our financial situation? Well? Time, You know,
time is the most valuable asset we have, um, and
particularly as I get older and realize we don't have
as much time as we thought we did, and the
time we waste as time we just can't get back.
And so I often talk to my team about return
on their time. And are you doing something that only
(33:45):
you can do. Um you know, are you having other
folks who work for you do something you could do
better than them, but they can do almost as good, right,
So that that leverages you to do something else? Um
you know, are you? I mean this is about spending money.
But one of the great things about when I was
(34:05):
building my career, as I lived in New York City
and everything got delivered, whereas my sister in law, who
was building her career at that point in Atlanta, had
to spend her entire weekend in the car picking up
dry cleaning, grocery shopping, etcetera. Right, And so I was
able to, you know, be more successful more quickly because
I was able to you know, target my time, and
(34:28):
when I wasn't working, I was able to relax to
a greater degree than you know, I got to put
the two kids in the car and get the dry cleaning.
The time is massively important. Here's the thing as you
think about a U turn is you have to give
yourself the luxury of time. You have to So this,
you know, from Merrill Lynch to Elvest was a few years.
(34:50):
I mean, it seems so obvious, right, Hey, Sally ran
Merrill Lynch Hey, women don't invest as much as men do.
Sally should go start lavest. Except it was so painful
to get from point A to point B, and I
just spent a lot of time with myself. What's important
to me? Was it the corporate jet? Was it the
big office? Was it the status? Was it the money?
(35:12):
Was it managing a lot of people? Was it the complexity?
You know? And what what do I really care about?
And you think that might be just like, oh, yeah,
I got it, but no, it was a lot of
early mornings when I would try to get to the
get to what I really cared about before I had coffee,
when I was still groggy, a lot of wine coming
(35:33):
back in here. Yeah. Absolutely. I actually really spent a
lot of time trying to lower my get my subconscious
to talk to me opposed to the I am expected to.
I'm must your intuition, getting getting an inner voice dialogue going.
And it took forever. But once you had that clarity, uh,
(35:59):
how soon after that we're able to act on it?
Because I think a lot of people have an idea
of what they want, but it's the inertia between the
knowledge and the action, and you don't seem to have
issues with action. You gotta go, you know what? What
what is CHERRYL. Sandberg say done is better than perfect.
You gotta go. But you're also saying it might take
(36:19):
a while and and and the process might be drawn
out and really painful. But that's okay. You're in it.
And everything takes longer, right, Everything worth doing takes longer. Um.
But action is what matters now. I said to myself,
what are the things that have to happen before we started?
And the one thing that had to happen was I
need to find a great chief investment officer. And it
(36:40):
took me almost a year, and so I you know
that I was not going to compromise on I found
a fantastic one in Sylvia Kawn, who's just as smart
a person as I have ever known as great an investor. Um.
But that that then took some time. UM, but you
know that's part of what makes a start up succes.
I don't know. I don't know if his successful startup
(37:00):
that moves slowly, m do you? Um? Someone once told
me that the best thing to do as a leader
is higher for your weaknesses. Um, understand your own weaknesses.
And then hired to make up for them. UM, do
you practice that? Do you ascribe to that? Yeah? Yeah,
I wouldn't even weaknesses might be I might not even
go all the way to weaknesses, but that is certainly important. UM.
(37:24):
I would just say where you don't have experience. So
for me, my co founder loves negotiating contracts. She's a
special special person because we love diversity, you know, just
loves putting together salary bands and you know, performance review
(37:48):
systems and just stuff that I've done and I can do,
but I just don't want to. Um. What what was
really interesting for me is sort of the you know,
we talked about time in the highest and best use.
I'm a research analyst by training and I was a CFO,
and I don't build the earnings models for our company. Um.
I mean, I build the most beautiful Excel spreadsheets you've
(38:09):
ever seen, but that's not my highest and best use. Right.
So then even leaving things you like and giving them
as someone else, although you might not want to, is
is a really interesting exercise. Not just your weakness you
hire for, but just the things you're sick of. Board
been there, YEA. How important was your personal support team
(38:32):
in the in while you were making the transition from
CEO to her to entrepreneur. Um, did they play a
big role in your transition? Yes? And no. Um, you
know my husband has always been tremendously supportive. Um. You know,
my brother is one of my best friends. And I'll
(38:54):
never forget when I was going through a particularly down
period he visited and Ye, such a typical male. I
I don't know. I feel my stomach hearts all the time.
I don't know what I'm gonna do. What if I
don't make it back? What nobody's calling? I can't. I
(39:14):
feel like I just haven't figured it out. You know,
I went off like this ten minute thing, and then
I'm waiting for him to He's like, yeah, you'll figure
it out. Not like you're my sister. I had confidence
in you. I want you know, like I was waiting
for the speed. At least he let you vent, you know,
(39:37):
he didn't leap in there and say, well what you
should do? Is that? That is fair? That is fair?
That definitely like I need to find a psychiatrist. But
so it really wasn't something external that allowed you to
figure out what you're doing. It was about deep soul
searching and the and the couch and the wine and
(39:58):
the interview. Yeah, the sense of gratitude that I have
been put on this earth. I've been given a series
of opportunities and experiences that nobody else on the planet has,
and that I can't leave the stage. It's you know
that you that if you've you've had the good fortune
I've had to then say all right, thanks, good night, Cleveland. Well,
(40:24):
just isn't fair. It isn't fair because in building lavest
in therefore helping women to invest in therefore getting more
money to the hands of women, we hope as they
are in the returns investing, we make the world a
better place, a lot better place. And for me to
say thanks, I'm gone, I'm going to do like a
couple of boards and hang out. It doesn't feel fair.
(40:48):
You know, you've got to pay it back. Yeah, we
are so glad that you're paying it back, Sally, and
so glad that you came on to talk to us.
Thank you very very much. Thank you. If our listeners, uh,
and I think all of them should want to get
more from Sally joined the I think upwards of two
(41:08):
million people who are already following Sally on LinkedIn, UM
where she puts her badass financial feminist views out there unfiltered.
Also Twitter at Sally Crow. Check and check out her book,
own it um and and check out the offerings on
last I do have an independent I ra A and
I think I know where it's going. Thanks Sally was
(41:32):
Thank you, Sally, Thank you, and let us know your
financial adventures at You Turns podcast. We are Curious
You've you've had the good fortune I've had to then
say all right, thanks, good night Cleveland. Okay, this isn't fair.
It isn't fair because in helping women to invest and
therefore getting more money to the hands of women, we
hope is they earn the returns investing, we make the
world a better place, a lot better place. Hello, thanks
(00:32):
so much for listening. This is you Turns, the podcast
about change and all those things that that entails, all
the windy ways and obstacles get thrown on our path.
And today the obstacle we're going to be discussing is
your finances. I'm Lisa Oz and I'm Jill Herzig. What
are we doing. We're here with an amazing guest, Sally
(00:55):
crow Check. Hi, Sally, happy to be Thank you so
much for joining us. She is the best selling author
of Own It The Power of Women at Work. UM.
She has been called and I believe she is a
financial feminist UM. And you see that in her latest startup,
which is called el Vest. Elvest is a digital investment
platform for women. And the way I look at it,
(01:15):
it takes you turns into account. It looks at the
way women's lives tend to twist and turn the decisions
we make the the realities of our lives and whips
that into a nifty algorithm that helps create an investment strategy.
So we get richer if you invest with elvest. So
(01:37):
have I got that right? Sally? Have I got the
mission right? Well? The mission really is to help women
become wealthier and have more money. We know that in
a capitalist society, money is power. We know that men
have more of it than we do. We know that's
led into a lot of this me too moment that
we're having, that that disparity and wealth um and a
(02:01):
lot of folks are focused on the gender pay gap,
which is very important, but a few years ago it
struck me that there are very few people who even
knew there was a gender investing gap, or we're focused
on closing it, but that gender investing gap, women investing
less than men, women keeping more of their money in cash,
can cost your your female listeners, certainly hundreds of thousands,
(02:22):
for some of them millions over the course of their lives.
I mean, that's life changing. And you know, as we
did the research, it was clear, just like so much
the medical research and the research on cars, is done
by men for men. We recognize in an industry in
which financial advisors are eighty six percent male and traders
are nine percent male, they built the business for men
(02:42):
and in obviously might not shove I know well and
in obvious ways. Right on the one hand, it's focused
on outperforming when women are much more focused on reaching
their goals. And on the other hand, to your point, um,
you know, the algorithms they have built are four men,
which means when women take more career breaks and men do,
and it affects their lifetime earnings, um, and so how
(03:03):
much they can invest. When women's salaries speak sooner than men's,
when women live longer than me, and not taking those
into account is hazardous for women's financial lives. And we
are the only the first, were the only firm to
do that. What I loved one of the things that
you talk about is we're pushing for equality with men
in terms of salary levels, but you're more about taking
(03:25):
into account the differences, the difference in flow and pattern,
rather than trying to duplicate the pattern of the mail work.
You you say, embrace the fact that there are differences
and optimize it for a woman, rather than trying to
pretend that you're a man in the workplace. That's right,
and we still want to keep pushing in the workplace
to make more money, but we better not in our
(03:46):
investments assume you know there were men when when we're women. Um,
and so we we change the investing platform in several ways.
Is mentioned men are much more focused on winning and
out performing, and we found it just leaves women cold.
Of the thousands of women we did research on when
we asked them, what's your goal, only one set to
(04:08):
outperform we all. We also discovered things like that, you know,
if you ask a man what his risk tolerances, he
will answer he doesn't know the answer. Nobody does until
you go through a financial crisis. But he'll give you
an answer, and a woman will retreat and she'll try
to figure it out. Well, wait a second, you know
as a fiduciary, and a fiduciary means that we are
(04:29):
obligated to put our clients interest ahead of our own.
We shouldn't be asking them a question we know they
don't know the answer to. We should be telling them
and using air quotes, telling them how much risk they
can afford if they don't have an emergency fund. They
can afford no risk. If all they're going to do
is retire, they can afford to have a higher equity
component of their portfolio, which we built for them. We
(04:49):
don't make them do that, um, so that they can
have the opportunity to earn the higher returns over time,
because they've got a long time to make up any
volatility in the market. If the market goes down, they
had that opportunity, and so they can earn give themselves
the opportunity or in the higher returns. That's my job, um,
that's the job of Elvis to determine how much where
someone should take. We shouldn't make it their job to
(05:11):
tell us what they want to take because they don't
have the they don't have the decades of experience that
we do. Quite frankly, I think that must come as
such an incredible relief. I feel relief just hearing it
from you, that you know that there are experts out
there who are going to look at my life and
some you know, get some information from me and say,
you know, here's what we recommend. Just makes all kinds
(05:32):
of sense. You know, before you took this turn towards
feminist finance. You worked at the absolute highest level on
Wall Street and the Ultimate Boys Club. You were c
Suite level at Marylynch City Group, Smith Barney High, basically
highest place woman on Wall Street decades and decades. You
shared your own me two stories, um which would take
(05:55):
the pain off your car. Frankly, and you. I think
it took you a while to share, are them? You said?
Because you just copd with it for so long that
you were you know, you grown thick skin and you
you know, moved along from it. So first I just
want to thank you for your honesty about that. Every
woman who's come out with a story has been helpful,
(06:16):
and just your honesty in general. You were famously on
the cover of Fortune magazine with this headline, the last
Honest Broker, because you took a risky and honest position
that that actually helped protect investors money. But you're just
honest as a person. It seems like because I was
reading your book, you know, I'm focusing on transitions, and
(06:36):
you are dead honest. You know about finding yourself on
the couch in sweats in the midst of transitions, you're
honest about and the glass of wine, the glass of wine.
Perhaps the best detail of all. There was not just
one glass, all many glasses of wine. Can you just
talk to us a little bit about that you turn
(06:57):
or any other you turn that you know you feel
like from so so many Um, Because I would say,
and you know everybody you know, we we know this intuitively. Um.
You pointed out I had a level of success. I
had a high level of success. I also had very
public failures. Um. And those two those that's you know,
(07:20):
two sides of the same coin. If in order to
be successful and to really stand out, you need to
take some real business risk in order to do it.
I mean maybe there are people who are promoted for
just staying in the middle of the pack and getting
a bee and not raising their head, but not a
lot um. In order to be promoted, you need to
have a different strategy about a business, take a risk
(07:43):
about a business. So you know, it's when I ran
sand for Burns team back in the day, we had
a very different strategy from the rest of all Street
rather than having our research channels also be for a
time investment bankers. And I won't go into detail, but
suffice it to say that is a fundamental conflict fundamentally,
let's do a good job for one of those clients
while also doing a good job for the other clients.
There's a fundamental conflict. I took us out of the
(08:05):
investment banking business. Was called a dope. You know, Oh,
the girl doesn't get it. And then you know, over
time it became clear that that conflict was really manifesting
itself in poor, maybe fraudulent UM advice to individuals and
institutional investors. And because we had seen that, because the
industry stumbled so publicly, I was on the cover of
(08:26):
Fortune magazine, UM that same client focus. When you know,
in the crisis of oh seven oh eight, I was
running Smith Barney UM. We had missold products to our
clients that we literally, really honestly thought were low risk.
We sold them as low risk, and it turned out
they were high risks. They were supposed to lose eight
cents in a bad market. They lost a hundred cents
(08:47):
in a bad market. I fought to reimburse the clients,
so sort of the same thing, right that client focus.
We did reimburse the clients, but my boss was against it.
The board overruled him, and I was fired for it.
On the front page of the Wall Street Journal. Um,
and so the same thing. You know, it's so fascinating
because I've sort of been the same person probably since
I was twelve or so. Um, But the same drive
(09:11):
of let's let's be super client focused. UM, let's step
away from the pack and do take that to its conclusion.
You know, that means getting out of a lucrative business
that doesn't serve these clients. That means returning client money,
which nobody ever does if you are wrong, um, and
admitting your right. Um. You know, at least in this
(09:37):
this you know, several decade period. But the same thing
that that led to success led to failure. And you know,
we can argue whether getting fired was failure in that case,
but it sure felt like it. It's sure embarrassing. It
was bad. Yeah, hence the couch for a little while. Yeah,
I mean, you know, you go from there's just this
(09:57):
weird series of moments when you're in a job like
that and you're honest to goodness scheduled from seven am
through to dinner. Um, I mean, honest to goodness. Guys.
I used to have to ask my assistant to finish
meetings for me five minutes early so I could go
to the bathroom the day back. Anybody like that and
(10:18):
that may not be your cup of tea, but that
was my life. And to go to a complete screeching
halt of literally the next day, you have nowhere to
be like literally, So, so how did you get I
mean just personally did take pretty much strength? Um, did
(10:38):
you have an epiphany through the wine? Well? The first
I have to tell you that I didn't come to
it very quickly because I immediately took a job running
Merrill when it came to me, So, you know, I
really didn't experience much growing and learning the first time
I got fired. But wait, there's more because I got
fired again. Don't worry, You're on one of our story.
(11:00):
Did not learn the lesson the first time, but you know,
the karma or the universe arranged for you to get
fired again so you could do it. I was like, oh, honestly,
there was a bit of in that time in Meryll.
I was we turned the you know, I was brought
in to turnaround Meryll after Bank of America bought it.
We turned the darn thing around. And then two years
later they came and said, we need a different skill
(11:20):
set I'm like, what, thanks for turning it around. We're
going with a with a white guy, right, awesome. UM,
My boss just really wanted to it seems, in looking
at his moves, wanted to surround himself with people he
was very comfortable. He was much more comfortable with UM.
And so a few of us UM were fired. That
one actually sort of hurt more because it was there
(11:44):
was a sense of but I followed the rules. The
business was growing, we were gaining share, we were beating plan.
I did what I was supposed to do. I sort
of knew I wasn't your best friend, but you fired me.
That's not supposed to matter that, you know, like that
through my world upside down, And I tell you I
I drank some more. The real way I got through
(12:07):
it was one I recognized how fortunate I was that
even you know, getting fired on the front page of
the Wall Street Journal is embarrassing, but it's also sort
of cool. Yeah, right, you're famous, you know, you just
but not a lot of people get to do that.
And so you're saying, you know, in terms of life events,
(12:27):
that's kind of awesome. UM, And you know, look, and
I'm a big girl. We weren't going hungry happily right.
I I figured I could find something else. But I
did have a lot of people say to me, you'll
never get another big job. So there was a moment
when I thought this is it. And I had friends
who said, moved back to Charleston, South Carolina. Quit doing
this to yourself. Um. There were a few moments, but
(12:50):
it was really moments. It wasn't ours, and I said,
I'm not going away. Um, I'm I'm gonna build something
different and I'll do it in a different way. That's it.
So that's probably gonna lead us to we'll come back
to that one second thing. Before the break, we were
(13:16):
talking about Sally's pivotal moment. Now, it took getting fired twice,
but one of the things you mentioned that struck me
was you said that financially you were in a good place,
so you could have moved back to South Carolina. What
you weren't that gave you the luxury of reflection and
(13:37):
of reinventing yourself. And I think for a lot of women,
we want to make changes in our life. We want
to be brave, we want to see the writing on
the wall. But if we haven't, we if we had,
If we haven't given ourselves the financial question, that financial
cushion was, we haven't made the right decisions. We'll stick
(13:58):
in a terrible job, in a bad marriage, will make
really lousy decisions because we don't have that financial freedom.
And you mentioned your book a bunch of mistakes that
women make, and I just want to run through some
of those that are so our listeners can avoid making
those mistakes, so that they're able to grow when they
want to and they're not stuck just for monetary reasons. Look,
(14:20):
you're making an important point. You know, we sit here
taping this as you know, the me too movement continues.
I mean, every time you think now the stories are
going to peter out, here they go again. Number one.
Number two. I really think we haven't explored something that's
really important in this country when we think about women
and work, which is the amount of productivity we lose
(14:41):
by working for bad bosses who are never going to
promote us. Right, all these self help women books, you know,
I'm Gonna know my worth and I'm gonna power pose
and I'm gonna whatever, never gets to an issue that
there are a lot of bad bosses there and we
tend to stay um and we tend to lose the
promotions and lose the money and lose use everything. And
(15:02):
underlying this to your point is money and that the women,
the brave women of me too. We're not in general
financially independent. So some of the actresses were no doubt
about it. But you know, Susan Fowler who up ended
Uber is not financially independent. The women at Nike who
have upended the leadership team of Nike are not financially independent.
(15:24):
Their financially stable, financially stable, and so they have got
probably the three months of money that's in an emergency
fund UM that enables them to say, if you're going
to fire me for speaking out, you know, I can
walk out of here and find myself another job and
(15:44):
not have to worry, right Whereas if you're living paycheck
to paycheck, you just don't have that option unfortunately. So
at el us we recommend we're an investing platform, but
we tell everybody before you invest with us, please you know,
put together, you know, get three to six months of
your take home pay into what we call an emergency fund.
We provide that for free at els because it's so important.
(16:05):
Once you do that, then begin investing a portion of
your paycheck. In theory. The right way to do this,
by the way, is fifty of your take home pay
should go to needs. Gotta pay rent, gotta get gas,
should go to fun because you've gotta have fun. Thank you,
you got to buy the feather boa even though you
know you don't want. You gotta go to dinner with friends.
(16:28):
Should go to grandma. You my grandma you is named Esther.
I don't know if you have a name for your grandma,
but my grandma is Esther. And that's putting it aside
into a diversified investment portfolio. Of course, I do that
through l vest, and that gives me, you know, the
financial security I need that if things go awry, I'm
able to make a change. I'm just now distracted thinking
(16:52):
about what I would name my grandma. Well, I'm just
thinking that most of the women I know, once they're married,
kind of delegate all of that responsibility to their I
don't know any women who are not single who have
separate accounts. You don't invest with your husband, You don't
do taxes with your husband. No, no no, no, I do
(17:14):
those things. I do those things. We have a lot
of joint money and joint handling of money, but I
am never out of it. You're involved, but you don't
do you? Would you have a separate investment platform? Is
that important to those? I mean? Must you keep your
money strictly separate? So here, here's what I would tell you,
and you can decide whether it's important or not. Um.
(17:36):
We women live six eight years longer than men do.
Of us manage our money on our own at some
point in our lives, whether we want to or not.
As you know, nearly half of marriages and the divorce.
I my first marriage was supposed to be my last marriage.
It was going to be my last marriage, and he
decided to have an affair with my friend. I'm in
(17:57):
a second marriage, and I'm really super confident and he's
not going to have an affair with my friend, just
as confident as I was with my first. I hope
you're not friends with that girl anymore? Oh God, no,
just keep her away. Is really funny, isn't it? Because
I can I can now see him and talk to him.
It's a weird thing we do with women. Right with her,
(18:18):
I'm just so mad with him. I'm like, thanks for
doing me the favor bud because but with her, but
you were my sorority sister. What. Yeah, there's a special
circle of health I personally believe. I'm sorry, it's a
different level of betrayal. It really let me keep um.
They're called individual retirement accounts for a reason. They're not
(18:40):
joint retirement accounts. And so you know, please if you know,
if you decide to put your money together for expenses,
I totally get if you decide to put your investments together.
I'm not sure as bersark about it, because women tend
to be better investors than men, because we tend to
trade less and panic less. But fine, but you should
you you should have separate retirement accounts because you, in
(19:03):
all likelihood will live longer of women die single, and
so you need to be at a place I would
you know, argue that takes into account that you live longer.
Right gets you to you know, some of the investment
firms out there look to get you to seventy percent
of your pre retirement and come we get you in
n Why because your healthcare costs are going to be
(19:24):
more than you think and you might live even longer.
And by the way, esther is a badass has the
rocking Esther right, Harley, you need Harley money, don't you.
And she actually she's a cougar. A my younger boyfriend,
and he might have expensive tastes and you know them. Yeah,
(19:47):
that's exactly right. I mean, I've married older men and
it'll be Esther's turn. That's that is fantastic. I love it. Okay,
So I guess you one of the things, as Lisa says,
when we want to make a change, UM, money can
(20:07):
sometimes seem to keep us trapped. Um. And this emergency
fund would be freeing, I think. But it's it's not
all I mean, there's even if you have that emergency fund,
there's money fear. I mean, you know, I've mentioned this
on this podcast. I moved out of publishing. I'm kind
of looking for my next thing. The hardest thing for
(20:30):
me in the first few months after I left my job,
although that thing about going from a super crowded schedule
to zip that what that was weird. The sound of
silence was very strange. Um, But the hardest thing for
me was not clocking that paycheck. Psychologically it it um,
it just chilled me to the bone. I will I
(20:54):
will admit that I stood in the shower crying one
day because I just thought to myself, I'm not doing
this anymore. I've been supporting myself and my family. I've
been I've been keeping us safe and warm and keeping
our dreams all tucked in, and I'm not doing that.
It's our identity and it just I gotta say it.
(21:15):
Not a not a great shower moment for me, and
it and it hung over me. So how do we,
in your terms, how do we sort of handle that
that feeling. Here's here's the thing. We're getting into big
karma karma issues. Um, there is so much shame and
weirdness around money. Yeah, emotional like crazy. You were in
(21:37):
that shower and you were feeling shame because at that
point not for the rest of your life. You knew
if I pulled you out of the shower and told
you off and said, do you think you're ever going
to our money again? Yes, but there was a sense
of I've let people down. I feel shamed. Guess another
time women feel shame around money when they make money
spouses more than their friends. We you know, we we
(22:02):
actually have a new initiative at l VEST which we're
calling hashtag disrupt money and if you go all the
way back to the beginning, um, and we were to
form a society, and we were to form institutions that
would keep money out of the hands of women, that
would keep power out of the hands of women. We
would do things like, Hey, daddy, how much money do
(22:25):
you make? Sweetheart? We don't talk about that. Hey, mommy,
how much did we pay? That's not a topic of
conversation in our household. We would grow up, we would
read magazines that would infantilize us around money. What's your
money type? Um, hey, and put it in the bank.
I mean, can you imagine if on CNBC Jim Cramer
turned to Dylan Ratigan and said, what's your money type?
(22:47):
Let's take a quiz, right, Let's see quiz and find
out our money type and what your money emotions are.
It infantilizes us. We have made money so weird that
we women. If the three of us after this podcast
asked head out for a drink, we are much more
likely to talk about sex than money. And you think
you think men don't have the same level of shame
(23:08):
and repression that we don't. Okay, men, For men, more
money is better no shame, right, I mean maybe shame
if you see men when they lose their jobs in
our narning become depressed to a greater degree than women do.
But for men, more money, more power, more testosterone, more winning, more,
(23:28):
you know, for us for women it's it's either way.
You feel shamed. You know. I have a couple of friends.
I can think about like three couples off the top
of my head where the woman made significantly more money
than her husband and it has been really hard on
the marriage. There's yeah, I think there's less sex well
totally because it's kind of emasculates the guy if he
(23:51):
feels like yep. And then because that's what our society
has made it be. And then we overcommensate in the
home and do more laundry and take care more of
the kids, and then we feel the rage, which is
not very sexy. So what do you do if you're
a successful woman, how do you how do you fix that?
You've got to get over you know, this is where
(24:13):
we need to as we talk about disrupt money. Um,
we need to talk about it with our friends. Otherwise,
how much how much of a raise do you know
to ask for if you're not even talking about it, right,
you need to get advice. How did you get this raise,
where are you investing, how are you spending your money,
and just get rid of the weirdness of it. And
(24:34):
then what we really need to do is buy from
women owned companies, invest in women owned companies, invest in
companies that advanced women. You know, I know that sounds
a little what I don't know about that. Invest in
women owned companies. That seems weird. Well, if you're not
investing in women owned companies, you're investing in men owned companies,
and that's amazing. But but women own companies outperform men,
(24:59):
have better returns, Women pay back their loans more quickly.
When women have more money, they put more into their community,
they give more away to nonprofits. So this is positive
ripple effect. And so instead of being invested in men
owned companies, okay, how about we just put women and
make the world a better place? Okay, really practical question.
What are some when I'm looking at things to invest in,
(25:21):
I look at like Apple and Amazon because they keep reason.
What are some women own companies that I could go
invest in right now? Because that's not advertised by the
way on the you know on the Decker table, I
don't want you to invest in individual stocks, you don't.
You please stop. It's done very well so far those
two in particular, what you've done is you've increased your
(25:42):
risk right there. One of the great um tenets of
investing is diversification. And you know, if you invest in
a single stock, it could well do very well, like
Apple did. I was highly invested in a single stock
City Group, that's where I work. It felt really good
when it was at fifty four, and it felt really
bad when it was at less than one. And it's
(26:05):
a lot of risk, and you know, it feels like
they can't go down. But look at what's happened to
Facebook lately. So anyway, that's my little lecture points. But
where where how do we find out if if it's
a woman owned company? So a couple of things, UM
we have the only you know, different from everybody at LBS.
We recently rolled out last Impact portfolios and those UM
(26:27):
give you the option and you can invest in the
the the traditional portfolios or these new ones. They give
you the option to check a box that will send
your money to invest more in women owned companies, get
money in the hands of women to start, you know,
bus small business loans help in communities for things that
help women advance, such as more nursing homes, more nursery schools, etcetera.
(26:50):
So that's one option. If you don't want to invest
with LS, which is totally fine. I mean, I don't
love it, but it's fine, go to us anyway. UM,
if you go to ls dot com, slash disrupt Money,
there's a resource guide there that will give you the
names of women owned companies UM that you can buy from,
(27:12):
invest in, etcetera. So we pulled it together for you.
Thank you, thank you, and I love that you that
you say, listen, maybe you don't care about a better world.
He's just because there are people that don't. When it
comes to their money. These companies outperform other companies. So
just just do it for esther. If that's no shame, right,
(27:33):
no shame. If that's not the way you want to invest,
what I would say is that you know, ten years
ago this idea of but what we're talking about right
now is impact investing. Impact investing and impact investing is
I want to invest my money to earn a return
but also have a positive impact on the world around
me in this case by investing in things that advanced women. Historically,
(27:56):
impact investing was viewed as a return depressor. If you're
doing good for the world, you must earn less money.
And if you talk to your uncle Joe at dinner tonight,
he will tell you this at length. He will go
on you know, Joe does he bore the freaking pants
off of you talking about how you know you have
to give up return. That is no longer true in
(28:17):
my opinion that the research is now telling us that
doing good in the world does not have to mean
reducing your returns, and I personally believe it can do
the opposite. All right, well, I want to ask you
something that we'll get into after the break. When is
it okay to pour some money into a U turn
that you want to make? When is it okay maybe
(28:38):
you're going to tap your elvest account to invest in
something you care about. I'm gonna take a quick break
before the break. Joe had a very pressing question because
I think she's about to make a big investment. Oh
(28:59):
what are you buy? It depends on what Sally tells um.
So when is it okay to tap into that investment
to take a risk to to invest in yourself in
a different way whenever you want. One of the ways
we help you invested Elvest is towards a goal. You
probably are familiar with the research that says that if
you just dream about doing something, your chances of doing
(29:22):
it are close to zero. If you write it down,
your chances or if you invest behind it, your chances
are through you know, through the roof, in my opinion,
and so at Lavest you can different from others. You
can invest in I want to start a business, and
I want to start a business in five years, and
will advise you how there's how much money you'll need.
(29:43):
I want to have a baby, Here's how much money
you'll need. Um, I want to have big splurge. So
obviously you have to you know, in order to sort
of take a U turn, you need to have that
emergency fund of three to six months. Hopefully you've invested
money so that you've got you know, X tens of
thousands of dollars or hundred whatever it is that is
(30:04):
available for you to start that business where you're not
going to get paid for a year or two um,
and enable you to do that with some confidence. But okay,
so what if you haven't, I mean, what if you're
talking about taking out a big loan. What if you're
talking about more putting a second mortgage in your house
and and there's risk involved. Where do you land on that? Well,
it depends on how passionate you feel about the idea. UM,
(30:28):
And there's really a spectrum. I have a member of
my family, UM, not immediate not immediate family, but extended
family who wants to be an entrepreneur and quit her
job and is looking for jobs to be an entrepreneur.
Good luck, good luck? Right? I mean, I don't even
know how to advise that. UM. On the other hand,
(30:51):
if you have an idea that you are so crazy
about that you're dreaming about it, that you're talking to
people and you're boring them with it, UM, you just
you know it's it's you're doing research on your time,
then go do it right. Because being an entrepreneur, as
one who has both run Merrill Lynch and been an entrepreneur,
(31:13):
I will tell you, and I'm the only one who
can tell you this, it's harder to be an entrepreneur
than running Merrill Lynch and be passionate about it. Oh
you know, here's something I sort of think, Please don't
mortgage your house for that. So this is this is something.
This is a you turn. You're you've lived, you're living
right now. You've kind of you put all your chips
(31:35):
on this idea, and you feel very passionate about it.
How does it feel terrifying? So you're here, this is
how terrifying it is. Okay, this is how terrifying it is.
I was in an executive position at City Group during
the financial crisis. I will never forget having the Federal
(31:55):
Reserve of the United States of America call me and
pull me out of a eating and asked me about
the whether we were seeing a run on the bank.
I mean, this is like depression era stuff. Okay, that's terrifying.
I would go home every night at eleven o'clock and
I would sleep like a log until five thirty, and
I would wake up and go do it again at elvest.
(32:17):
I go home, I toss in turn, wake up at
three thirty. I worry about everything go wrong. You know,
I slept during the financial crisis, but this you wake
up because the you know, because at the end of
the day, the personal responsibility is so great. We got
much closer to a financial meltdown than anybody realizes. But
(32:41):
it wasn't going to be my fault, right, And this
is your baby, this is yours. Yeah, this is you know.
I've got sixty people who have left other jobs. Every
one of them could be in another great job someplace else,
who have left to be part of this journey. And
you just and they've got families and you know we're
not making money. Yeah, and you you feel response. I mean,
(33:04):
they're all big girls, they all did this knowing, um,
but you feel that personal responsibility for them. You know,
we got men to we we love diversity, so we
allow men to work at all of us. That's generous
of you. You suggest trucking the way you spend your
time the same way that you track spending our money.
Could you talk about that a little bit and how
(33:24):
that might help our financial situation? Well? Time, You know,
time is the most valuable asset we have, um, and
particularly as I get older and realize we don't have
as much time as we thought we did, and the
time we waste as time we just can't get back.
And so I often talk to my team about return
on their time. And are you doing something that only
(33:45):
you can do. Um you know, are you having other
folks who work for you do something you could do
better than them, but they can do almost as good, right,
So that that leverages you to do something else? Um
you know, are you? I mean this is about spending money.
But one of the great things about when I was
(34:05):
building my career, as I lived in New York City
and everything got delivered, whereas my sister in law, who
was building her career at that point in Atlanta, had
to spend her entire weekend in the car picking up
dry cleaning, grocery shopping, etcetera. Right, And so I was
able to, you know, be more successful more quickly because
I was able to you know, target my time, and
(34:28):
when I wasn't working, I was able to relax to
a greater degree than you know, I got to put
the two kids in the car and get the dry cleaning.
The time is massively important. Here's the thing as you
think about a U turn is you have to give
yourself the luxury of time. You have to So this,
you know, from Merrill Lynch to Elvest was a few years.
(34:50):
I mean, it seems so obvious, right, Hey, Sally ran
Merrill Lynch Hey, women don't invest as much as men do.
Sally should go start lavest. Except it was so painful
to get from point A to point B, and I
just spent a lot of time with myself. What's important
to me? Was it the corporate jet? Was it the
big office? Was it the status? Was it the money?
(35:12):
Was it managing a lot of people? Was it the complexity?
You know? And what what do I really care about?
And you think that might be just like, oh, yeah,
I got it, but no, it was a lot of
early mornings when I would try to get to the
get to what I really cared about before I had coffee,
when I was still groggy, a lot of wine coming
(35:33):
back in here. Yeah. Absolutely. I actually really spent a
lot of time trying to lower my get my subconscious
to talk to me opposed to the I am expected to.
I'm must your intuition, getting getting an inner voice dialogue going.
And it took forever. But once you had that clarity, uh,
(35:59):
how soon after that we're able to act on it?
Because I think a lot of people have an idea
of what they want, but it's the inertia between the
knowledge and the action, and you don't seem to have
issues with action. You gotta go, you know what? What
what is CHERRYL. Sandberg say done is better than perfect.
You gotta go. But you're also saying it might take
(36:19):
a while and and and the process might be drawn
out and really painful. But that's okay. You're in it.
And everything takes longer, right, Everything worth doing takes longer. Um.
But action is what matters now. I said to myself,
what are the things that have to happen before we started?
And the one thing that had to happen was I
need to find a great chief investment officer. And it
(36:40):
took me almost a year, and so I you know
that I was not going to compromise on I found
a fantastic one in Sylvia Kawn, who's just as smart
a person as I have ever known as great an investor. Um.
But that that then took some time. UM, but you
know that's part of what makes a start up succes.
I don't know. I don't know if his successful startup
(37:00):
that moves slowly, m do you? Um? Someone once told
me that the best thing to do as a leader
is higher for your weaknesses. Um, understand your own weaknesses.
And then hired to make up for them. UM, do
you practice that? Do you ascribe to that? Yeah? Yeah,
I wouldn't even weaknesses might be I might not even
go all the way to weaknesses, but that is certainly important. UM.
(37:24):
I would just say where you don't have experience. So
for me, my co founder loves negotiating contracts. She's a
special special person because we love diversity, you know, just
loves putting together salary bands and you know, performance review
(37:48):
systems and just stuff that I've done and I can do,
but I just don't want to. Um. What what was
really interesting for me is sort of the you know,
we talked about time in the highest and best use.
I'm a research analyst by training and I was a CFO,
and I don't build the earnings models for our company. Um.
I mean, I build the most beautiful Excel spreadsheets you've
(38:09):
ever seen, but that's not my highest and best use. Right.
So then even leaving things you like and giving them
as someone else, although you might not want to, is
is a really interesting exercise. Not just your weakness you
hire for, but just the things you're sick of. Board
been there, YEA. How important was your personal support team
(38:32):
in the in while you were making the transition from
CEO to her to entrepreneur. Um, did they play a
big role in your transition? Yes? And no. Um, you
know my husband has always been tremendously supportive. Um. You know,
my brother is one of my best friends. And I'll
(38:54):
never forget when I was going through a particularly down
period he visited and Ye, such a typical male. I
I don't know. I feel my stomach hearts all the time.
I don't know what I'm gonna do. What if I
don't make it back? What nobody's calling? I can't. I
(39:14):
feel like I just haven't figured it out. You know,
I went off like this ten minute thing, and then
I'm waiting for him to He's like, yeah, you'll figure
it out. Not like you're my sister. I had confidence
in you. I want you know, like I was waiting
for the speed. At least he let you vent, you know,
(39:37):
he didn't leap in there and say, well what you
should do? Is that? That is fair? That is fair?
That definitely like I need to find a psychiatrist. But
so it really wasn't something external that allowed you to
figure out what you're doing. It was about deep soul
searching and the and the couch and the wine and
(39:58):
the interview. Yeah, the sense of gratitude that I have
been put on this earth. I've been given a series
of opportunities and experiences that nobody else on the planet has,
and that I can't leave the stage. It's you know
that you that if you've you've had the good fortune
I've had to then say all right, thanks, good night, Cleveland. Well,
(40:24):
just isn't fair. It isn't fair because in building lavest
in therefore helping women to invest in therefore getting more
money to the hands of women, we hope as they
are in the returns investing, we make the world a
better place, a lot better place. And for me to
say thanks, I'm gone, I'm going to do like a
couple of boards and hang out. It doesn't feel fair.
(40:48):
You know, you've got to pay it back. Yeah, we
are so glad that you're paying it back, Sally, and
so glad that you came on to talk to us.
Thank you very very much. Thank you. If our listeners, uh,
and I think all of them should want to get
more from Sally joined the I think upwards of two
(41:08):
million people who are already following Sally on LinkedIn, UM
where she puts her badass financial feminist views out there unfiltered.
Also Twitter at Sally Crow. Check and check out her book,
own it um and and check out the offerings on
last I do have an independent I ra A and
I think I know where it's going. Thanks Sally was
(41:32):
Thank you, Sally, Thank you, and let us know your
financial adventures at You Turns podcast. We are Curious
Road to Somewhere News
Hosts And Creators
Lisa Oz
Jill Herzig
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