Ellevest CEO Sallie Krawcheck’s Best Investing Tips for Women Who Want to Grow Their Money

Introduction

Investing your money is important for anyone who wants to build wealth over time. However, research shows that women often face unique challenges when it comes to investing compared to men. Sallie Krawcheck, co-founder and CEO of Ellevest, is on a mission to close this investing gap with her digital investing platform designed specifically for women’s financial needs.

Key takeaways

Start investing early with small amounts to maximize long-term wealth through compound growth.
Choose low-cost, broad market index funds over individual stocks for better diversification and performance.
Determine your risk tolerance to decide the appropriate balance of stocks and bonds for your portfolio.
Automate monthly transfers into your investment account to ensure consistency and ignore short-term market fluctuations.
Aim to save 10-15% of your income for retirement, even if starting with very small amounts.

In this blog post, we’ll share Sallie Krawcheck’s best tips for how women can become savvy investors and grow their money.

Start Early and Invest Regularly

One of the key principles Sallie stresses is that investing is a marathon, not a sprint. She advises women to start investing as early as possible, even if it’s with small amounts of money. This allows your investments more time to compound and grow through market gains.

Invest in Low-Cost Index Funds

Sallie recommends investing in low-fee, broad market index funds rather than picking individual stocks. Index funds provide instant diversification and often outperform actively managed funds over the long run.

Understand Your Risk Tolerance

It’s important to invest in a portfolio that matches your individual risk tolerance. More conservative investors may want a higher allocation in bonds, while more aggressive investors can weight their portfolio more heavily toward stocks. There are online questionnaires that can help determine your risk tolerance.

Automate Your Investing

One way to stay consistent with investing is to set up automated transfers from your bank account into your investing account on a scheduled basis. Even small amounts contributed regularly can add up over time thanks to compound growth.

Tune Out Short-Term Market Fluctuations

Sallie emphasizes tuning out the market’s ups and downs and sticking to your long-term investing strategy. It’s normal for the market to experience corrections periodically, but by staying invested you’ll be positioned to benefit when stocks recover.

Navigating the Gender Pay Gap and Its Impact on Your Retirement

While the focus is often on how much to invest, Sallie Krawcheck frequently highlights the “elephant in the room”: the gender pay gap. Because women historically earn less over their lifetimes, they have less “investable” income. To compensate, Krawcheck suggests that women must be more strategic about their career trajectories. This means negotiating aggressively for higher salaries, switching employers to secure market-rate raises, and factoring in the “motherhood penalty”—the career gap many women face during child-rearing years. When building your investment plan, don’t just calculate based on your current salary; account for the reality that your earning power needs to be maximized early to make up for those potential years of lower or zero income later in your career.

The Hidden Cost of Cash: Why Your Savings Account is Losing Value

One of Krawcheck’s most poignant observations is that women tend to hold more cash in savings accounts than men. While this is often framed as being “cautious,” it is actually a significant financial risk. Due to inflation, money sitting in a standard savings account loses purchasing power every single year. If your interest rate is 0.5% and inflation is 3%, you are effectively losing 2.5% of your wealth annually. Krawcheck encourages women to view cash as a tool for short-term liquidity—like an emergency fund of three to six months of expenses—and anything beyond that should be put to work in the market. Keeping your “future self’s” money in a savings account is not safe; it is a guaranteed loss in real terms.

Tax-Advantaged Accounts: Leveraging Government Incentives

Investing isn’t just about picking the right funds; it’s about using the right “buckets.” Krawcheck emphasizes the importance of utilizing tax-advantaged accounts like 401(k)s, IRAs, and Roth IRAs. For many women, the Roth IRA is a powerful tool. Because you pay taxes on the money now, your withdrawals in retirement are tax-free. If you are early in your career and currently in a lower tax bracket, the math strongly favors the Roth. Furthermore, if your employer offers a 401(k) match, that is essentially a 100% return on your investment the moment you contribute. Always prioritize getting the full employer match before directing funds to other investment vehicles, as it is “free money” that significantly boosts your long-term compounding potential.

The “Confidence Gap” and Investing Education

Krawcheck often speaks to the disparity in financial confidence between genders. Many women wait until they feel like “experts” before they start investing, whereas men are often more willing to jump in with less knowledge. The danger here is that by waiting for total clarity, you lose the most precious asset of all: time. You do not need to be a Wall Street analyst to be a successful investor. The strategy of using a target-date fund or a diversified robo-advisor portfolio is intentionally designed to remove the need for constant monitoring. Recognize that your hesitation is likely a byproduct of societal conditioning rather than a lack of capability. Your goal is to be a “good enough” investor who stays the course, not a “perfect” investor who tries to time the market.

Integrating Life Goals into Your Investment Strategy

Investing is rarely just about “wealth”; it is about funding life transitions. Krawcheck advocates for goal-based investing. Instead of one giant pot of money, categorize your investments by purpose: buying a home, funding an education, or retiring at age 60. This perspective changes how you view market volatility. If you are saving for a down payment in two years, your risk tolerance should be very low (e.g., high-yield savings or short-term bonds). If you are saving for retirement in 30 years, you can weather the storms of the stock market because you have time for recovery. By segmenting your money, you reduce the emotional urge to panic-sell when the headlines turn negative, because you know that the money you need for next year is already protected.

Revisiting Your Portfolio During Major Life Transitions

Your investment strategy should never be “set it and forget it” forever. While daily checking is discouraged, you should perform a “portfolio check-in” during major life shifts: marriage, divorce, a new job, or the birth of a child. For example, if your household income increases, your risk capacity may actually increase, allowing you to invest more aggressively. Conversely, if you become a primary caregiver, you might need to adjust your liquidity needs. Krawcheck notes that these transitions are also the moments when women are most likely to abandon their plans due to stress. Having a pre-established plan or a financial advisor who understands your long-term goals is essential to prevent emotional decision-making during these high-pressure periods.

The Power of “Impact Investing” for Women

Many women are interested in aligning their investments with their values, a concept known as Environmental, Social, and Governance (ESG) investing. Krawcheck has been a leading voice in showing that you don’t have to sacrifice returns to invest in companies that promote gender diversity or environmental sustainability. In fact, research often shows that companies with diverse leadership teams perform better over the long term. If you are struggling to find the motivation to invest, looking at your portfolio as a way to vote for the kind of world you want to live in can be a powerful psychological catalyst. By choosing funds that prioritize companies with strong track records in social responsibility, you turn a chore into a mission-driven activity.

FAQ

What is the investing gap?

The investing gap refers to research showing that women often invest less money than men and allow too much cash to remain in savings instead of investing it. This leads women to miss out on long-term compound growth.

How much money do I need to get started investing?

Many online brokers now allow you to open an account and start investing with no minimum deposit. You can begin by investing small amounts you can afford like $20-50 per month into index funds.

What percentage of my income should I invest?

Financial experts often recommend saving at least 10-15% of your income for retirement investments. But any amount you can afford, even if it’s only a few dollars per month, is better than nothing.

What are the main differences between stocks and bonds?

Stocks offer an ownership stake in a company while bonds are debt issued by companies or governments to fund operations. Stocks have higher long-term return potential but more volatility. Bonds provide more consistent income but lower total returns over time.

Should I choose a robo-advisor or invest on my own?

Robo-advisors can be great for beginning investors since they automate portfolio management. But investing on your own into low-cost index funds is also a solid approach. Do your research and choose the option you feel most comfortable with.