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Should Women Invest Differently Than Men?

Finance

Women, on average, live five years longer than men. They make, on average, 21 percent less than their male counterparts, they take more “career breaks" than men do, and their salaries peak much earlier — at age 40 versus 55.


When you take these factors, and others, into consideration, a woman will retire with substantially less than her male equivalent even though she's more likely to live longer. It's a no brainer — the short answer to “should women invest differently than men?" is a resounding, “Yes!"

The Status Quo

“We often read about the gender pay gap that affects women; much less well-known is the gender investing gap," said Sallie Krawcheck, the co-founder and CEO for Ellevest, an investing firm that caters specifically to females. “Investing less than men can cost some women just as much as the pay gap over their lives. While most big investing firms have 'women and investing' programs, most of them have missed the mark. In my opinion, it's because they all tried to market to women, not to serve women."

Currently, 86 percent of investment advisors are men, which translates into a clear lack of the female perspective in a field that affects the sexes equally. Krawcheck founded Ellevest to fill a clear need in the investing market, and the firm has gone back to the very basics to carefully examine, question, and alter the status quo. Along the way, they've discovered that women don't care about outperforming the market, which is the traditional investing goal. Instead, they care very deeply about planning for their goals and investing to reach them.

Susan Conrad, the chief client experience officer and an advisor at Plancorp, has worked in the investment space for 25 years and is particularly knowledgeable about goals-based, purpose-built investing. She agrees with Krawcheck regarding a woman's investment goals versus a man's.

“Women want to feel secure, to know that they are not going to outlive their money. We often set family related goals, such as paying for children's college or assisting with a down payment for their first home and leaving a legacy for the next generation. Men, in contrast, are often focused on investment performance and trying to hit a number that they think reflects success," she said.

Neither is an inherently wrong approach, but Conrad added that “as advisors, we should address the information needed by our clients. I think it's imperative for an investment strategy to be based upon a financial plan that includes the personalized goals and dreams of each client."

Sallie Krawcheck. Photo courtesy of Girlboss

Changing the Investing Tide

A woman outliving her retirement fund because an investment manager assumed a man's lifespan, or didn't account for other female-driven variables, can be catastrophic. And the fact that women are investing less than men, on average, is a sign that the industry hasn't been doing a great job serving the female market. Clearly, real change in the investment world is needed, and we're on the cusp of a tidal shift thanks to female-driven companies like Ellevest, and advisors like Conrad.

In addition to taking into account obvious changes (such as longer life spans, pay disparity, and salary peaks), subtle findings are being accounted for.

“[For example], women won't invest in what they don't understand, while men will. Women are not more risk averse — as so many believe — but are more 'risk aware.' That means they want to understand the risks they are taking, and once they do, we have found that they are willing to take them," said Krawcheck.

“We built a proprietary investing algorithm that helps women choose their goals, make trade-offs among their goals, and put together an investing plan to reach their goals. If the client falls off track, we provide her with personalized tips for getting back on track."

Conrad added, “Over the next decade the largest wealth transfer in American finance history will occur. It will affect women, their children and millennials more profoundly than any other demographic.

Add to that the fact that 70 percent of buying decisions are made by women, and you can see why it's so important for advisors to understand women and address their concerns."

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Lifestyle

Going Makeupless To The Office May Be Costing You More Than Just Money

Women have come a long way in redefining beauty to be more inclusive of different body types, skin colors and hair styles, but society's beauty standards still remain as high as we have always known them to be. In the workplace, professionalism is directly linked to the appearance of both men and women, but for women, the expectations and requirements needed to fit the part are far stricter. Unlike men, there exists a direct correlation between beauty and respect that women are forced to acknowledge, and in turn comply with, in order to succeed.


Before stepping foot into the workforce, women who choose to opt out of conventional beauty and grooming regiments are immediately at a disadvantage. A recent Forbes article analyzing the attractiveness bias at work cited a comprehensive academic review for its study on the benefits attractive adults receive in the labor market. A summary of the review stated, "'Physically attractive individuals are more likely to be interviewed for jobs and hired, they are more likely to advance rapidly in their careers through frequent promotions, and they earn higher wages than unattractive individuals.'" With attractiveness and success so tightly woven together, women often find themselves adhering to beauty standards they don't agree with in order to secure their careers.

Complying with modern beauty standards may be what gets your foot in the door in the corporate world, but once you're in, you are expected to maintain your appearance or risk being perceived as unprofessional. While it may not seem like a big deal, this double standard has become a hurdle for businesswomen who are forced to fit this mold in order to earn respect that men receive regardless of their grooming habits. Liz Elting, Founder and CEO of the Elizabeth Elting Foundation, is all too familiar with conforming to the beauty culture in order to command respect, and has fought throughout the course of her entrepreneurial journey to override this gender bias.

As an internationally-recognized women's advocate, Elting has made it her mission to help women succeed on their own, but she admits that little progress can be made until women reclaim their power and change the narrative surrounding beauty and success. In 2016, sociologists Jaclyn Wong and Andrew Penner conducted a study on the positive association between physical attractiveness and income. Their results concluded that "attractive individuals earn roughly 20 percent more than people of average attractiveness," not including controlling for grooming. The data also proves that grooming accounts entirely for the attractiveness premium for women as opposed to only half for men. With empirical proof that financial success in directly linked to women's' appearance, Elting's desire to have women regain control and put an end to beauty standards in the workplace is necessary now more than ever.

Although the concepts of beauty and attractiveness are subjective, the consensus as to what is deemed beautiful, for women, is heavily dependent upon how much effort she makes towards looking her best. According to Elting, men do not need to strive to maintain their appearance in order to earn respect like women do, because while we appreciate a sharp-dressed man in an Armani suit who exudes power and influence, that same man can show up to at a casual office in a t-shirt and jeans and still be perceived in the same light, whereas women will not. "Men don't have to demonstrate that they're allowed to be in public the way women do. It's a running joke; show up to work without makeup, and everyone asks if you're sick or have insomnia," says Elting. The pressure to look our best in order to be treated better has also seeped into other areas of women's lives in which we sometimes feel pressured to make ourselves up in situations where it isn't required such as running out to the supermarket.

So, how do women begin the process of overriding this bias? Based on personal experience, Elting believes that women must step up and be forceful. With sexism so rampant in workplace, respect for women is sometimes hard to come across and even harder to earn. "I was frequently assumed to be my co-founder's secretary or assistant instead of the person who owned the other half of the company. And even in business meetings where everyone knew that, I would still be asked to be the one to take notes or get coffee," she recalls. In effort to change this dynamic, Elting was left to claim her authority through self-assertion and powering over her peers when her contributions were being ignored. What she was then faced with was the alternate stereotype of the bitchy executive. She admits that teetering between the caregiver role or the bitch boss on a power trip is frustrating and offensive that these are the two options businesswomen are left with.

Despite the challenges that come with standing your ground, women need to reclaim their power for themselves and each other. "I decided early on that I wanted to focus on being respected rather than being liked. As a boss, as a CEO, and in my personal life, I stuck my feet in the ground, said what I wanted to say, and demanded what I needed – to hell with what people think," said Elting. In order for women to opt out of ridiculous beauty standards, we have to own all the negative responses that come with it and let it make us stronger– and we don't have to do it alone. For men who support our fight, much can be achieved by pushing back and policing themselves and each other when women are being disrespected. It isn't about chivalry, but respecting women's right to advocate for ourselves and take up space.

For Elting, her hope is to see makeup and grooming standards become an optional choice each individual makes rather than a rule imposed on us as a form of control. While she states she would never tell anyone to stop wearing makeup or dressing in a way that makes them feel confident, the slumping shoulders of a woman resigned to being belittled looks far worse than going without under-eye concealer. Her advice to women is, "If you want to navigate beauty culture as an entrepreneur, the best thing you can be is strong in the face of it. It's exactly the thing they don't want you to do. That means not being afraid to be a bossy, bitchy, abrasive, difficult woman – because that's what a leader is."