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Hate that there's an Equal Pay Day? Here's what we can do
“Leave the saving of the world to the men? I don’t think so.” Elastigirl, from The Incredibles
But how? As we *celebrate* this year's first Equal Pay Day (it’s April 10 on average, August 7 for black women, and November 1 for Latina women), it’s clear that, in order for something to be different going forward, we need to do something different going forward. It can be standing up for what we believe in, fighting for those less fortunate than us, amplifying each other’s voices and stories, marching for causes that matter.
And by using our financial clout, it can be investing in the future we want.
We women and our male allies have an historic opportunity to make the world a better, fairer place. We can do this by consciously and collectively acting to drive positive social and economic change, by….get this….supporting and advancing women.
Let’s back up for a second. Here’s what we know:
1) Money is power. Personal power, and the power to drive positive change. The power to start a business, leave a bad job, live our fullest lives.
2) The progress of “feminism as an individual sport” — with each of us feeling individually “empowered” to get that raise, take that seat at the table — has stalled. It will be 38 years until the wage gap closes for white women, 106 years for black women, and 230 years for Latina women. Women are 80% more likely than men to be impoverished during retirement. Only 6% of Fortune 500 companies have female CEOs, and women receive less than 2.5% of venture capital funding.
3) When women thrive — in our communities, in business, in leadership — everyone thrives. Businesses and start-ups perform better with women in leadership. And women invest 90% of their income back into their families and communities, as compared to 35% for men. If women were fully engaged in the economy, it would add a staggering $28 trillion to global GDP.
And 4) We must do this for ourselves. Many of the public and private institutions, overwhelmingly led by men, have inadequately advanced policies – or shared the money and opportunities – to advance women.As Gloria Steinem has said, “Power can be taken, but not given.” We love the men in our lives, butif we wait for them, we’ll just keep waiting for them. (And then there are the Tony Robbins of the world. Doesn’t feel like this guy is going to “get it” anytime soon, amIright?)
The solution must come from us. And here’s one: Investing in women.
This is women (and our male allies) coming together, purposefully and intentionally, to invest our money in advancing in women....and thus driving positive social and economic change. Using the power of our money, regardless of how much we have.
How do we do this?
TIME’S UP has done it with their legal defense fund, to support women who have been harassed but do not have the financial resources to defend themselves. The new All Raise campaign is doing this through its Founders for Change (of which Ellevest is a part), in which founders pledge to raise their funding from diverse venture capital teams, if they are able to.
At Ellevest, we are doing this through impact investing. We have introduced the Ellevest Impact Portfolios, which work to drive positive social and economic change by advancing women.
We each should of course each “put our oxygen masks on before assisting others:” putting ourselves in a position of financial strength — one component of which is investing. Women today do not invest as much as men do, and it can cost us hundreds of thousands — for some even millions — of dollars over our lives*. And, according to the Ellevest Money Census, the top drivers of confidence for women that they can reach their financial goals are investing and saving.
So we should be investing. And at the same time — at the same time! — we can seek to advance other women by directing our investments to companies and initiatives that invest in women.*
Imagine the small businesses women can start with these investments; imagine the capital we can drive to companies that promote us and treat us well; imagine the homes we can fund for women and their families; imagine the innovation we can unleash by funding women’s ideas. These are innovations and businesses and dreams that might not otherwise see the light of day.
We’re talking investing, not charitable giving. Of course, all investments involve risk; however, research indicates that impact investing of this type can offer competitive returns while lowering risk. (The point of view that there must be substantial return trade-offs is so1993.) Because think about it: women are more likely to pay back loans than men; companies that have more women in leadership outperform those that don’t.
Bonus: At the same time, investing in this way together, we can work to disrupt the investing industry (just as the women of All Raise are no longer waiting for the venture capital industry to change, but are taking action themselves to change it). Women have invested through the traditional investing industry, but it hasn’t done a very good job of investing in women. It hasn’t been inclusive, but exclusionary: with high minimum investments, high fees, a workforce that doesn’t reflect us or what we want in investing. (Is it really believable that 85% - 90% of the best people for the trading and financial advisory jobs are men – and primarily white men – in this day and age? And is it then really surprising, given what we learned last week, that some 55% of women in the industry reported a high or moderate prevalence of sexual harassment?) Despite this free rein, at its core, the industry has failed to achieve its fundamental value proposition of outperforming the market. Abysmally. Like more than 99% of active managers fail to consistently outperform over a five-year period.
The industry also hasn’t worked well for our society more broadly: we can draw a direct line from its homogeneity to the excessive risk it took to the financial crisis. And we can draw another line from the mostly male workforce to the gender investing gap that has cost women so much.
But we can work to change that, as noted above: Women (and our male allies) coming together, purposefully and intentionally, to drive social and economic change by advancing women. Using the power of our money.
We can continue to be invested in the past, or we can invest in the future. Imagine the positive ripple effect: Investing by women. Investing in women. In this together, driving change together.
The world needs us.
This article was originally published on Ellevest.
*Ellevest offers impact investment portfolios in both its digital and Private Wealth offerings. The digital offering can be up to 50% impact; as a fiduciary, Ellevest must put its clients’ interests first, and thus selects investments with an eye toward first investing to help clients achieve their goals.
Have more questions? Follow up with the expert herself.
Sallie Krawcheck’s mission is to help women reach their financial and professional goals (or, put more bluntly, to get more money into the hands of women), thus enabling them to live better lives and unleashing a positive ripple effect for our families, our communities and our economy. She is the CEO and co-founder of Ellevest, an innovative financial company, by women for women. Ellevest is one of the fastest growing digital investment platforms and has... Continue Reading