Own It by Sallie Krawcheck

Author:Sallie Krawcheck
Language: eng
Format: epub
Publisher: The Crown Publishing Group
Published: 2017-01-16T16:00:00+00:00

This chapter is about getting yourself in financial control and investing in your future. Now that I’ve said that, are you tempted to skip this chapter?

Please don’t.

As you’re thinking about flipping ahead, I’ll bet you’re also thinking, What the heck is a chapter like this doing in a book that’s so much about women and work? And power? And recognizing our worth? And accelerating positive change in the world?

But in truth it couldn’t be more related. This chapter is here because, as we all know, money is power. Financial independence is power: it’s the power to make a career switch, the power to negotiate with our boss with confidence, the power to start our own business. The power to go back to school and get an advanced degree, to explore nontraditional job opportunities, to invest in ourselves in ways that will help us be more successful—and more fulfilled—in our careers. It’s also the power to leave a bad marriage, the power to help an aging parent, the power to retire early—maybe even on a beach somewhere. The power to live our lives fully. I believe that only when we are truly secure in our finances can we be truly secure in our careers.

So what’s the best career advice that no one is talking about?

Invest your money.

I mean it. Because investing your money may end up being more important for your future than any career move you ever make. How important?

Well, remember that raise we talked about in Part I and the compounding effect it can have on your lifetime earnings? Remember how just a 2 percent higher raise each year from a starting salary of $50,000 can add up to an extra $943,000 in yearly income after thirty years? Or the additional $1.1 million we can earn over the course of forty years if we were to close our individual gender gap, and get that raise to bring our salary on par with what the guy in the office next door is making?1

Yes, getting that raise matters. But it drives me nuts that so many personal finance writers imply it’s the only thing that matters: “Well, sure, women should invest more…but, really, until we get the gender pay gap fixed, we haven’t solved the real problem, so why bother?”

Stop right there. That’s a bit like saying “Hey, you broke your arm. But your leg’s broken, too. Until you get your leg fixed, you haven’t solved the real problem, so let’s just not do anything about that arm.”

This type of thinking is part of the reason that, according to data from the investment firm BlackRock, we women default to keeping some 68 percent of our savings in cash (and here I don’t just mean dollar bills under our mattresses—though that’s a bad idea, too—but in checking and savings accounts) instead of in diversified investment portfolios that have historically been higher yielding over time.2

Now, having money in cash can feel pretty good. It feels safe. But the cost of that (mostly false) sense of security is a high one.

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