Taking Control of Your Finances with Sallie Krawcheck | #BossTalks | Salesforce

I got a feeling that you got a feeling that this is gonna be good. Hello, everyone, and welcome to Boss Talks, a series featuring candid career advice from some of the best in the business. Today's episode is all about financial wellness, which to me, is one of the most important skills to hone in on, because, let's face it, you can't be a boss if you're broke. Now, I know talking about money can be a little bit uncomfortable for some folks. Maybe this topic was taboo with your family and friends, or maybe it was that you are not a numbers person, so you simply just avoided the topic altogether. But the truth is, getting your finances in order is a boss move. So that's exactly what we're gonna learn today. To help me out, I've invited one of the most powerful women on Wall Street. Sally Koch is an author, she's a speaker, and she is the CEO of ellevest, a digital financial Advis. Women. Sally, welcome to Boss Talks.

Ebony. So happy to be here with you. Thank you for having me. Yes, yes.

Well, let's dive in, because I have so many questions for you. So when I mentioned to my team and folks around me that I wanted to do an episode on finance, they unanimously agreed that we had to have you as a guest on Boss Talks. You are an icon, and many of us, including myself, have followed your career journey. So I'd love to just start out with. What made you want to pursue a career in finance?

Oh, money. Money, of course. Because as we all know, money is not just money. Money is power. Money is freedom and independence. Money can be anxiety. Money can be nervousness and uncertainty. And I grew up in a household where my dad worked outside the home and my mother worked inside the home. And the only thing they ever fought about was money. There was a power imbalance, and let me tell you, they fought barely at all. But that one minute a month that they fought was when the bills were getting paid. And I thought, uh, nope, nope, nope, nope. You know, I know it's crass to say. I know it's. We. We don't like it when women say this, but I wanted to make money.

I like that. So you mentioned that finance can be a little scary for some folks. And it. And I think that fear can become a barrier to learning how to properly manage your money. So what advice do you give people for helping overcome this fear?

Well, recognize that you've been socialized in this way. We're not born out of the womb. Oh, my gosh. I'm not good with Money. I don't know anything about money. Money is scary. It is a learned behavior. And to be perfectly clear, it is a learned behavior for women. Little girls receive the messages about be cute, be adorable, don't get your dress dirty. Little boys get to the top of the jungle gym. Little girls get worse grades in math for the same answers as little boys when they're growing up and then are adults. The money media treats us very differently. 90% of the articles written for women on the women's websites about money are negative. They're about scarcity, they're about saving, they're about coupon clipping, they're about it's your fault. They're about don't buy the latte. Whereas 72% of articles to men are about investing and growing. And so where money is scarcity. Oh, dear. I don't, you know, it's my fault, frankly, being gaslit and men, oh, there's always more money on the way. You know, I can grow and invest, and if I don't know everything, it's okay. So this is pure socialization. And then, you know, the cherry on the top of the pie is that for so long it's actually even been in a patriarchal society. Cute for women, feminine for women to be bad with money. Oh, don't you know, my head. And money. And, you know, just as it used to be, it was cute to be bad at sports. And so we had, just as the Williams sisters, just as Billie Jean king, just as U.S. women's soccer team changed that view about sport and athleticism. So we have to change the view around money.

So being smart around your money, understanding and being educated around how your money works is the new sexy, that's the new power move.

And it's the new wellness. Because again, if you go to press, written to women, it's physical wellness, it's emotional wellness, it's spiritual wellness, it's sexual wellness. But not often is it financial wellness. But money is our number one source of stress. And so if we don't have financial wellness, then we have stress and it undercuts all the rest of it. So I'd say the new wellness is financial wellness, which doesn't have to. It doesn't mean financial independence. It means financial wellness. Knowing what you got, knowing where you want to go and feeling good about it, that's financial wellness.

On that, knowing what you've got and all that education, what are some great tools or courses you'd recommend to help people educate themselves on money issues and to really just get A little bit more comfortable with the conversation.

Ebony, what a softball. Thank you so much. I happen to have a good idea about that, which happens to be Ellevest. So until Ellevest was founded, you know, all financial services companies were for everybody, which, again, not to get too much on my feminist bandwagon in a patriarchy means for men and weren't addressing necessarily women's unique needs. For example, the fact that we tend to take more career breaks or the fact that we tend to stop when there's jargon that we don't understand. Men continue to move on through, but women are like, whoa, wait a minute. I've been socialized to get A's. So we built Ellevest for the ground up by women, for women. And one of the things we offer, which is very different from others, are money coaches, career coaches, certified financial planners, and a ton of workshops, articles, workbooks, email courses, et cetera, so that you can find what your money challenge or problem or opportunity is and find the resource for you over there.

It's such a good resource. I remember when I was going through, there were so many tips and articles and people, and I felt like part of a community, and I felt so empowered, and it wasn't overwhelming. That's what I really loved about Ellevest. It was easy to understand, and I felt great about the knowledge I was building. So, Sally, I want to talk a little bit about building wealth because there can sometimes be a limited view to wealth building, like buying a house, but there's so many ways to do this. So educate us on the different opportunities and how we should really approach this concept of wealth building.

Well, Ebony, I'm so glad you're bringing up wealth because we spill so much ink on the very important gender and racial pay gaps. We spill less ink on the even more important gender and racial wealth gaps. And the wealth gaps are worse than the pay gaps. Women make 80 cents to a white man's dollar. The wealth gap is 32 cents to a white man's dollar. And for black women, it's a penny and going in the wrong direction, getting worse. The reason for that is the money comes in. We tend to have more debt, have more credit card debt, have more student loan debt, and we tend to own less real estate, and we tend to own fewer stocks and invest less. And so the powerful impact of real estate prices going up historically, of the stock market going up historically, and it compounds. It gets growth on top of growth on top of growth. Women and people of color have disproportionately missed out on. So how do you get there? Well, of course, ask for that raise for sure. Work to get the pay gap closed. On top of that, the first thing you want to do is pay down that credit card debt or that high interest rate debt, because that really saps away at your wealth. And then recognize that the wealth has grown because of, to your point, buying a home where real estate prices have historically gone up about. They've gone up, they've gone down, they've gone sideways, but about 3% a year on average. Equity prices, stock market prices have gone up more than three times that on average historically, so about 9.3%. And that includes the crash of 87 and the pandemic crash and the Internet bubble burst and all those ones that the subprime crisis. Even with all that, we as women tend to think the stock market does this. Historically, it's done that. So I like to say investing is the best career advice. Nobody ever told you because if you're built, you invest a bit in the stock market out of every paycheck it compounds. It builds wealth. It can build generational wealth and it can build I hate my job, I'm getting out of here wealth too.

Sally, let's double click on this wealth gap. So research shows that wealth building can be a little bit more challenging for people of color and women, as you mentioned. And you may have seen a report that came out not too long ago that stated that the medium wealth for black Americans will fall to zero by 2053. And as a black woman, I read that stat and I was just horrified. It really saddened me. So can you explain to us one what these numbers really mean and more importantly, what we can do to help reverse this trend.

Let me add another one that at first just doesn't make sense, but after a moment of thinking, which is that black millennial women have less wealth than the generation before them had at the same stage of life. To me, ebony, where you just think about women of color making such strides, just feel so off. One reason for it, student loan debt. Student loan debt. And where that weight around their ankles is something the generations before did not have to deal with. And we could spend time on this, I think is really a national tragedy. And in terms of the personal, what one can personally do it is paying off the high interest rate debt first so that it's not pulling away at your wealth, really working to get some amount invested that recognizing that's been one of the great growth engines for wealth. If you can just 1% of your take home pay, get it invested, work it up to 2% of your take home pay, leave it there and let it compound. Those are ways that you can build some wealth.

So, Sally, I think it's important for people to know that they don't have to know everything there is about finances to be good at it or feel like they have to do it all themselves. Something like having a financial planner can be a lifesaver. And I also know you've talked about finding a bank that aligns with your values and these are all great partners. So when should we start thinking about bringing in someone to help us organize our finances?

Well, so, you know, first of all, I appreciate that and let me, let me sort of make one side comment, which it's not that hard. The concepts are not that difficult. One should start as soon as one can and it should be sort of boring. You know, there's, you know, we began to talk about investing a little bit. We all have this vision of I got to be trading at my desk with three different screens and TVs blaring on the side and Bitcoin and all. Actually, investing should be boring. It should be a bit out of every paycheck into a diversified investment portfolio so that you can begin to build. And it should be inexpensive. The more you trade, the worse your performance generally is. So it's one of those places where less effort can mean more, except when you feel like you need help. And so that can be in your 20s. How do I do a budget right? Let me go to a workshop and begin to figure that out. How do I ask for my first raise? How do I negotiate if I'm told no? How much should I be putting into a retirement plan? And so reaching, reaching out to an Ellevest which has those types of resources, we have them. We want to be there for women from college to crypt. My team hates it when I say that. College to crypt. And you can either dip in and do a workshop with 500 of your closest friends on investing 101 or spend time with a certified financial planner or a full time financial advisor. So finding a service like in Ellevest that can be with you across your life and provide you the different levels of service. It doesn't all have to be, you know, we've got the teacup and the pinky out and you know, the, we're talking about money. It can be much more approachable and accessible.

I love that. And let's talk about retirement. You double click there. What are some steps we can take today? To help us prepare for retirement.

So the first one's going to surprise you. I want you to visualize yourself, particularly the women, as a retired. Whether it's a grandma or great auntie or badass older lady on a. I like that one. Right. I want you to name her. Mine's named Esther. Because the research says if you name her and you picture her, you will take care of her. It is not you. It's a older version of you with arthritis in your knees and so on. And someone needs to take care of her. Guess what? It's probably bad or good news. I don't know. It's probably not going to be your partner. And that's because 80% of women die single whether we want to or not. And when. That's because half of marriage is in a divorce. And I know yours won't. Mine wasn't going to either, but it did. Not the second one, but the first one. And then we live six to eight years longer than men. So look at any nursing home in this country and you're like, Yep, yep, it's 80% of women die single. Now, here's the shocker, Ebony is that when she outsources money in her life to her partner and it comes back to her, which for 90% of us, we manage our money at some point in our lives on our own. When it comes Back to us, 74% of us have a negative surprise. 74%. So 98% of widows and divorcees say the number one piece of advice they would give to other women is not to outsource their money to manage it themselves. 98%. Like, I don't think you get 98% of widows in divorcees degree on the color of the sky, much less anything else. And so my first piece of advice is it's called an individual retirement account for a reason. So, you know, at least, at the very least, be putting some percent of the paycheck into the 401k at work. And I'm sorry if that means you can't go out for the coffee or the glass of wine or whatever you need to. Please, please, please be doing that in your 20s. If there is a match, that's called free money. And so you want to be doing your best to get to that match, which can give you like a 20% or 50% return right away. You want to invest it in, if you're younger, like me, more in equities which have greater risk, but therefore have historically had greater return. And you've got time to weather the ups and downs of it. But if you just do that simple thing, which is invest there or an ira, if you have left your. Your company, what you're going to find, particularly if you can get yourself to investing, you know, a few percent, maybe up to 10% later in life, even more, you're going to find that the power of the markets will enable you to retire in a way that's great and comfortable for you.

Wow. This is so great. Sally, I think we might have to have you on for a part two because we have come to my favorite and final question, and I think I might know what you're going to say, but I'm interested. So, Sally, what is your superpower?

Good question. Did I understand what my cats are saying to me?

Okay, well, that shocked me.

English to me, I really do understand. But honestly, Ebony, my superpower is I just don't give up. You know, we didn't go over it in this time period, but I've been senior, you know, big senior roles, and I've been fired, and I've been fired in the public limelight, you know, and just the ups and downs. And we have been taught as women to get our A's to embarrass if we stumble. And I just sort of refuse. I just sort of refuse to buy into that, even though that was my southern upbringing. So I think my superpower is just. I just won't give up. I'm a wee. When I was growing up, there was a weeble. You'd hit it and pop back up. Remember that? That's Weevil.

I love that.

And my cat speaks to me.

Best superpower ever. Thank you so much. You shared so many amazing tips today for helping us get our finances in order, and I think these skills are so important, and we really appreciate you sharing them with us today. So thank you for joining us on Boss Talks.

Pleas.

This is a popular topic with all of you, so let's hear your questions.

Hi, Ebony. I'm Logan, and I'm 18 and a freshman in college. I want to start thinking about my financial future. What are some good resources to start learning about finances?

Hi, Logan. I really love that you're already starting to think about this, and there are so many great resources out there to help you learn more about managing your finances. One of the best books I've read on this topic is called How Money Works. It's such a great title, right? This is an excellent crash course in understanding the basics for both your personal and professional finances. I'm also a big visual learner So I love all the infographics that are shown in this book, how money flows through various financial processes, et cetera. It's a great read. There are also some really good free courses taught through LinkedIn Learning and Coursera, where you can enroll in classes taught from professors from Wharton or even Yale. Udemy is a really good resource for that as well. It's all about finding though what works best for you, whether that's books or classes or mobile apps. You know, today Sally mentioned Ellevest for the women out there. So give one of these resources a try and see where it takes you. I hope you all enjoyed today's conversation. For more boss talks, be sure to check back here on Salesforce plus so you never miss an episode. And to continue boss building, head on over to trailblazer.salesforce.com to join millions of trailblazers who are learning relevant skills, connecting to fellow trailblazers and giving back with the Trailblazer community. With that, thank you so much for tuning in and we will see you all next time. Sam.