7 Investing Tips from the Most Powerful Woman on Wall Street


Sallie Krawcheck wants more women to invest.

The founder and CEO of Ellevest — an investing and financial planning company built for women by women — is committed to helping women manage their money and take part in what’s long been a male-dominated field.  

“Women aren't investing as much as men are,” she says. “They're leaving a larger percent of their money in cash. It's costing women — [for] some women, tens of thousands, for some women hundreds of thousands, for some women a million-plus over the course of their lives.”

In an episode of Erika Taught Me, Krawcheck shares seven pieces of sage investing advice for women, as well as anyone who is just getting started with personal finance.

Erika & Sallie Taught Me

  • You might feel like you’re not ready to invest, but you don’t have to be an expert. You’ll build confidence as you learn how markets trend over time.
  • Boring can be good. Most of the time, choosing diversified investment funds and letting them ride will get you further ahead than those who tinker with their investments.
  • Don’t just focus on cutting spending. Focus on earning what you deserve, which can then give you more money to invest.

. . .

1. Just Get Started

Some people — particularly women — think they don’t know enough about investing and want to do a lot of research before jumping in, Krawcheck says in her interview with Erika. 

But you don’t necessarily need to be an expert to invest, nor do you have to understand every piece of financial jargon. 

“We've been socialized as women: ‘I've got to understand it, I've got to understand the whole thing,’” says Krawcheck. 

“Rather than take an educated guess, [we say] ‘I'm gonna go learn something and come back.’ And then people are busy. Other things get in the way. There is no clock on the wall that ticks away the money you're losing every day by not investing.”

But the key to becoming a successful investor is to simply get started.

Even if you put in a few dollars out of every paycheck, that’s a good start. Over time, you can work your way up to putting a higher percentage of your paycheck into investments as you get more comfortable.

If you aren’t an investor yet, you might fear the stock market. But once you get started, you’ll see that even if the stock market goes up and down daily, it trends upward on a long-term basis.

The pain of losing hurts more than the joy of gaining, says Krawcheck. So it’s understandable that some people are afraid to invest in stocks and suffer losses. There have been many difficult periods — the Great Depression, the Internet bubble bursting, the subprime mortgage crisis, and the COVID-19 pandemic. 

“The markets have been upward trending for as long as we can go back in time. But they're upward trending with volatility, and that volatility can be scary,” says Krawcheck.

But even with all that volatility, the stock market has returned about 9.5% annually on average over the past century.

That said, not everyone should jump into the stock market. You shouldn’t if you need the money in the next six months or are about to retire, says Krawcheck. 

That’s because you’ll have less time to manage the ups and downs of the stock market. In that case, you might need a portfolio that has more fixed income, for instance.

But if you have time, it’s important to realize that stocks have trended upward over the long term. You can take advantage of dollar cost averaging by continuing to invest as part of every paycheck.

“If you commit to yourself, ‘I'm going to invest 1%, 5%, whatever it is out of every paycheck, then sometimes it’ll be when the market is tough,’” says Krawcheck.

“Sometimes I'm buying high, sometimes I'm buying low. Typically, I'll get the market return, which doesn't seem exciting, but does better than 99%-plus of active traders.” 

READ MORE: How To Start Investing

3. Don’t Underestimate the Power of Compounding Returns

A big reason why the upward trend of the stock market is so valuable is that those who invest for the long haul can tap into the power of compounding returns. 

In other words, not only might you gain the average of around 9.5% in annual returns, but the money you made will start making you more money. Each time you gain positive returns, that gives you a higher baseline from which you can earn more returns.

For example, if you invested $1,000 in 1900 and just let the power of compounding returns take over, says Krawcheck, you’d have somewhere around $57 million today.

“You're earning those returns on returns,” says Krawchek. “So you invest $100 in the market, and you earn, say, 10% return. The next return you earn is not just on the first 100, but on the 110. And then the next is on 120.”

4. Getting Market Returns Is Generally a Win

You might think that to be a great investor you need to do all sorts of sophisticated maneuvers. But the reality is often much simpler. 

If you just choose a diversified investment portfolio and take whatever returns the market brings, rather than actively trading stocks, you’ll beat 99% of active traders, says Krawcheck.

If you actively trade, such as by picking companies or sectors that you think will do well and buying and selling stocks frequently, you’re going up against professionals who do this for a living in a market that’s already very efficient. 

And even if you get the theme right — like if you thought around the new millennium that the internet was the future and you should invest accordingly — you still could have been wiped out in the dot-com crash, explains Krawcheck.

So, even though it might not be the most exciting and can seem counterintuitive, you can often do better than most investors by simply taking what the market gives you within diversified exchange-traded funds (ETFs) or mutual funds. 

“If you want to … put yourself in a position to earn the returns [and] get the confidence that comes from seeing those returns accrue over time … then you want to get a broad-based index fund, that is either global or U.S. in scope,” says Krawchek. “You want to go as broad as possible, put your money in there, and stop thinking about it.”

READ MORE: Active vs. Passive Investing: Which Is Best?

5. It’s Not Too Late to Start Investing

While the earlier you can start investing the better, don’t feel like you can’t invest because you’re past a certain age. 

Your portfolio might look a little different as you get older, explains Krawcheck, and you might not necessarily earn as much as if you started investing in your early 20s, but that’s okay. 

“Please, even when you get to grandma's age … just, as Suze Orman says, stand in your truth, and begin to invest in an appropriate portfolio,” says Krawcheck. 

“And if you're just starting, you're definitely going to want to be in a less risky portfolio — more bonds, less equity — but just start from where you are. And again, it doesn't have to be this one big bet. It can be over a period of time and fine.”

People have all sorts of regrets in life, she says, so if one of those is you won’t necessarily end up with as much money as if you started investing earlier in life, then so be it. 

It’s still better to start investing and earn what you can, rather than think it’s too late for you and hold yourself back.

6. Buy the F***ing Latte

In 2019, Krawcheck wrote a great article for Fast Company titled “Just buy the f***ing latte.” It’s a stereotype of financial advice to skip daily coffees to get ahead financially, but Krawcheck goes against this narrative. 

For one, she wrote, the emphasis on lattes has patronizing connotations that shame women in particular for spending money. And when you do the math, you can see that you’re probably not going to afford retirement just by skipping lattes.

Instead, writes Krawcheck, the focus should be on more important issues, like closing gender pay gaps. 

In her podcast interview with Erika, Krawcheck explains that finance articles geared toward men tend to be about abundance and growth, while ones for women are typically about scarcity.

So, if you’re only thinking about buying less, and not looking at the other side of the equation by earning more, then you might not get as far ahead financially as you’d like or as you should.

This advice might just seem like it applies to budgeting, but it also ties into investing. Negotiating for a higher salary, for example, can have a bigger impact on how much you can invest for retirement, compared to what you might be able to save by cutting out small expenses like lattes.

7. Control Your Money

Lastly, Krawcheck advises women to stay in control of their money, rather than letting their partner take over all the financial decisions and management. Because even if your partner is well-intentioned and you don’t plan on getting divorced, unexpected events can happen. 

“In relationships, we've got to be involved in the money — we cannot outsource it to our partner,” she says. “Remember, women live longer than men — 80% of women die single, 90% of us manage our money on our own, even if we don't want to.”

If your partner is no longer around, you want to be sure you can manage your money. Being overly reliant on your partner can be a recipe for financial mistakes or simply an inability to manage your money, including investments, down the road.

“98% of widows and divorcées say the number one piece of advice they’d give to other women: Stay in control of your money,” wrote Krawcheck in a LinkedIn post.

READ MORE: How Should Married Couples Split Finances?

TL;DR

In many cases, successful investing is about simplicity. You don’t have to actively trade stocks, but you do have to get started. Even if you start small, you’ll likely gain confidence and start enjoying the benefits of compounding returns.

“Money is women's number one source of stress,” says Krawchewck. “It is such a source of stress that more than half of millennial women report they have become physically ill over it. And about two thirds say that it's impacted them emotionally.”

But when those women take action, such as setting up an emergency fund, paying off credit card debt, or getting started with investing, it drives their confidence.

“It turns a source of stress into a source of strength,” says Krawcheck.

Listen to the full interview with Sallie Krawcheck or check out these other episodes of the Erika Taught Me podcast:

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I'm an award-winning lawyer and personal finance expert featured in Inc. Magazine, CNBC, the Today Show, Business Insider and more. My mission is to make personal finance accessible for everyone. As the largest financial influencer in the world, I'm connected to a community of over 20 million followers across TikTok, Instagram, YouTube, Facebook and Twitter. I'm also the host of the podcast Erika Taught Me. You might recognize me from my viral tagline, "I read the fine print so you don't have to!"

I'm a graduate of Georgetown Law, where I founded the Georgetown Law Entrepreneurship Club, and the University of Notre Dame. I discovered my passion for personal finance after realizing I was drowning in over $200,000 of student debt and needed to take action-ultimately paying off my student loans in under 2 years. I then spent years as a corporate lawyer representing Fortune 500 companies, but I quit because I realized I wanted to have an impact; I wanted to help real people and teach them that you can create a financial future for yourself.

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Our aim is to help you make financial decisions with confidence through our objective article content and reviews. Erika.com is part of an affiliate sales network and receives compensation for sending traffic to partner sites, such as MileValue.com. This compensation may impact how and where links appear on this site. This site does not include all financial companies or all available financial offers. This in no way affects our recommendations or article content.

Advertiser Disclosure

Our aim is to help you make financial decisions with confidence through our objective article content and reviews. Erika.com is part of an affiliate sales network and receives compensation for sending traffic to partner sites, such as MileValue.com. This compensation may impact how and where links appear on this site. This site does not include all financial companies or all available financial offers. This in no way affects our recommendations or article content.

Advertiser Disclosure

Our aim is to help you make financial decisions with confidence through our objective article content and reviews. Erika.com is part of an affiliate sales network and receives compensation for sending traffic to partner sites, such as MileValue.com. This compensation may impact how and where links appear on this site. This site does not include all financial companies or all available financial offers. This in no way affects our recommendations or article content.