By Rebecca Heilweil
One CEO says the advice that women should penny-pinch on coffee to beef up their investments is "patronizing."
"It sort of misses the whole point, which is the gender pay gap, the gender investment gap, the gender debt gap," Sallie Krawcheck, the CEO and co-founder of Ellevest, told Cheddar. "You know, it's gaslighting, which is, don't pay attention to these structural inequities."
Krawcheck is the former president of Bank of America's global wealth and investment management division. In 2016, she founded Ellevest as a financial investment platform for women. The startup has won the support of Melinda Gates and Valerie Jarrett, and raised $33 million back in March.
Overall, women still lag behind men in investments, investing a whopping 40 percent less than their male counterparts according to NBC. That's despite the fact that women, as individual investors, tend to earn higher returns than men.
Financial content geared towards women often focuses on cutting back on small purchases, like coffee and skincare products. But Krawcheck says that the same isn't said about small, luxury purchases that male consumers tend to purchase. "It's the latte, the milky sweet coffee beverage that's the choice of so many females. Not the six-pack. Not the ribeye. The latte," said Krawcheck.
This phenomenon has come under increasing scrutiny. Harper's Bazaar wrote last year that women will be shamed for spending on "pretty much anything that is for their personal pleasure," and added that "the cost of the items they're buying doesn't matter. Women get shamed for shopping whether they're rich or poor."
But focus on reducing these tiny expenses — which Krawcheck doesn't find a particularly rewarding investment decision — obfuscates the larger structural barriers that limit women's financial success. "We need to be sure that we're going to be addressing the real issues, which aren't 'are you going to have one luxury a day?' That's not the issue," said Krawcheck.
She also criticized women-focused media that reinforce negative stereotypes of female financial practices.
Krawcheck argues that encouraging women to be confident with money and investing needs to begin in childhood. "The truth is by encouraging boys and men on with money, and girls to hold back, we masculinize the concept of money," she said. "When we think about a wealthy individual, or a CEO, or an investor, or a trader, what comes to all of our minds are men."
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