Bridging the gender investing gap for female entrepreneurs
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Bridging the gender investing gap for female entrepreneurs

Sallie Krawcheck was fired on the front page of the Wall Street Journal twice.

When it happened the second time the former head of Citi and Merrill Lynch's wealth management divisions decided she was done with Wall Street and that she would start a business aimed at addressing the gender investing gap.

Sallie Krawcheck, co-founder and chief executive officer of Ellevest Financial.

Sallie Krawcheck, co-founder and chief executive officer of Ellevest Financial.Credit:Bloomberg

Mind the gap

“There is a lot of work on the gender pay gap which is important and we have made progress on it but no one had even really conceived of, or spent any time on something we now call the gender investing gap,” Krawcheck told the Dell Women’s Entrepreneur Network in Toronto last week.

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“The gender investing gap derives from the fact that women tend to have 71 per cent of their money in cash and men a much lower percent and the difference in those percents and the fact we have more cash cost the women in this room at least $1 million over the course of their lives."

Krawcheck says the gender investment gap also impacts female entrepreneurs as they are often so busy taking care of their business that they don't take care of their own finances.

"This concept of taking care of your business and taking care of yourself is true both personally and financially," she says.

Krawcheck says women need to prepare for retirement by investing now.

"Eighty per cent of us will die single and we will retire with two thirds of the money of men," she says. "We live six to eight years longer, we have less money."

Krawcheck has moved from banker to entrepreneur.

Krawcheck has moved from banker to entrepreneur. Credit:Bloomberg

Launching Ellevest

In 2016 Krawcheck launched Ellevest, a digital investment platform to encourage women to invest.

The robo advisor creates financial portfolios made up of exchange traded funds and Ellevest Impact Portfolios which have an investment theme of advancing women globally

There is no minimum investment in Ellevest but Krawcheck wants to target the $1 million women lose over a lifetime which she describes as "change your life money".

"It's get my business several years more runway money, its quit my corporate job money, it's get out of a relationship that no longer works for me money, its get your friggin hand off my friggin leg money."

For Krawcheck the root of the gender investing gap is societal norms.

"Society tells us that money is a man's thing," she says. "At school research shows boys get better grades in maths for the same answers. In magazines there are 16 different ways to have a smoky eye but when it comes to money it's either not there or we are infantilised. It's 'Are you a Samantha or a Carrie with money?'.

Krawcheck says the financial industry has served men rather than women in the past but women need to turn this around.

At this stage Ellevest is unavailable to Australian investors.

Meggie Palmer is the founder of Sliding Door Media.

Meggie Palmer is the founder of Sliding Door Media.

'We bleed ourselves dry first'

Talking to Fairfax Media on the sidelines of DWEN, Australian entrepreneur Meggie Palmer says she invests in her business but also in her share portfolio.

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Palmer runs her media training business Sliding Doors Media from New York using contractors in the United States, United Kingdom and Australia and turnover is estimated at under $1 million.

"I have invested a lot of my savings into my business but I have also quarantined an amount I don't touch," she says. "Financial security is very important to me."

But Palmer says many female entrepreneurs are failing to invest, instead putting any money they have into their business.

"If you are going to raise capital from a VC some people will say if you haven't invested every single dollar in your business then you are not committed," she says. "As women we also have this sense that we feel we have to invest every single cent we earn into a business before we ask for money but men will have a million-dollar share portfolio and will then go out and raise millions for their business. Women wait longer to invest because we bleed ourselves dry first."

The reporter attended DWEN in Toronto as a guest of Dell.

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