Ellevest | Investing for women
When I did my reader survey last year, you guys said you'd like to learn more about investing.
I haven't blogged much about investing, largely because I'm not all that informed about it. I mean, I understand 401(k)s and IRAs, but not much outside of that.
Unfortunately, I'm typical of a lot of women. For a variety of reasons, women are way less likely to make financial investments than men are, and that's not exactly fabulous.
(Why should the men be the only ones earning compound interest? We can do that with our money too!)
So, this year I'm going to make a point of learning and posting more about investing, and hopefully we all can learn something.
(Most FG readers are women, so a lot of you can probably stand to learn along with me!)
To kick things off, I'm going to share an investment company with you that is designed by women, for women.
It's called Ellevest, and Ellevest is all about closing the investment gap between men and women.
Due to regulations, I'm not allowed to share my own testimonial experience of using Ellevest, but I can tell you all about how it works and how you can get started.
How does Ellevest work?
Ellevest offers an easy-to-set-up, easy-to-use service to help you invest money toward specific goals.
You start out by entering some basic information, and Ellevest asks you about your goals and the timeline for those goals.
It's a little bit reminiscent of the way that tax prep programs take complicated information and turn it into a set of friendly interview questions. It really reduces the fear/overwhelm factor!
Based on what you enter, Ellevest suggests monthly contribution amounts. You can customize these and your timeline, and Ellevest will show you how these adjustments will affect your ability to reach your goals.
Why is Ellevest for women?
Ellevest offers investment options for retirement, but they also offer more than that. You can choose to invest toward things like a dream vacation, starting a business, or the costs of future children.
If you've always thought of investing solely as a retirement option, these other options might feel less scary to you!
You aren't committing to locking your money away until you're 65...in fact, you can withdraw your money from Ellevest at any time with no penalty fees.
And if you feel like facing a retirement goal is too big, you can dip your toe into the world of investing by setting a smaller goal (say, $5,000 to start back to school.)
Also, since women tend statistically to be more risk-averse than men (see this Blackrock report), the Ellevest standard is a 70% likelihood of reaching your goal vs. the more standard 50%.
In addition, Ellevest's algorithms take into account that women's lifespans tend to be different than men's, and so does the curve of their salaries over time. It really is specifically designed for women.
Plus, there are no minimums, so investing is accessible for women who don't have a nest egg to jump-start their investments.
Why should women care about investing?
Ellevest's CEO and founder, Sally Krawcheck says:
“If we’re not investing, we’re doing most of the hard work around money, but we’re only getting about half the reward. â€
Ellevest's goal is to get women over the proverbial "pink wall" and into the world of investing by making it accessible and easy to get started.
How much does Ellevest cost?
For accounts under $50,000, Ellevest charges a 0.25% fee (which means that an account with $10,000 in it will incur an annual fee of $25.)
Ellevest Emergency Fund accounts aren't charged any fees.
(See further pricing info for higher-balance accounts here.)
Why should I start investing with Ellevest?
It's designed by women, for women.
And most importantly, Ellevest makes it easy for women to get started with investing.
You don't have to be an expert on the stock market, you don't have to purchase and sell individual stocks, and you don't have to manage your portfolio. Ellevest takes care of all of that for you for a minimal fee.
And that means you (Yes, you!) can invest your money.
You can do this!
And you can get started now.
Hop on over to Ellevest's site, answer a few questions, and you'll be on your way to creating a simple investment plan for your future dreams.
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I tried to keep this brief so that it wouldn't feel overwhelming. So, I know I haven't covered every single aspect of Ellevest. If you have questions, just leave a comment, and I or my contacts at Ellevest will help you out!
I am working with Ellevest to help them spread the word to other women about investing. I earn a commission on accounts opened through my affiliate links. This post is not sponsored.
Love this. Love that it was started by women. Love that it can help women navigate a traditionally male arena.
My dad is extremely financially savvy, so I've picked up some things from him, but I still don't feel as if I DO much with my money. Other than pay bills. 🙂
I'm in the same boat. I kind of know what goes on from what I've learned from my husband and father-in-law, but if I were left to manage the actual investing part, I'm not sure how well it would go. I want to know how and feel confident so that I'm ready to take that responsibility over if I have to.
In my elementary school some 4th and 5th grade students (equivalent of gifted/talented before it existed) participated in a virtual stock market enrichment class. My sister did and it frustrated her to tears, but I think it would've been a great experience for older kids who had a better grasp of money and complex formulas and such. I'd actually be interested in doing something like that as an adult just to proficient in the process without using real money!
Ellevest sounds fascinating - before your article, I had never heard of it, so I started reading up on it. I like what I am learning and am thinking about giving it a try.
One thing to note: the $25 annual fee does not include the costs charged by the mutual funds (also known as ETF exchange traded funds) within the account. In other words, a woman can’t just shell out $25 and be done with it!
I would caution anyone - particularly women like me who don’t love investing - to learn more about any investment vehicle before taking a plunge. In the end, there are no guarantees.
Thanks for pointing that out, I was just wondering if the $25 would be all costs. Understandably you also pay the ETF...
I'm learning, slowly, how the investment world works. Thanks Kathy & Kristen!
I also have to admit that I don't know much about investment beyond 401k and IRAs either. Mr. FAF and I are currently maxing out our 401ks. We're also waiting for his company stocks to get vested. Other than that, we don't have any other investments beyond ourselves.
I really like that the website looks so modern and pretty. Thanks for sharing!
I am so glad you are doing this. I was an Ellevest early adopter and have been thrilled with it, and with my experience. I enjoy the messaging, the social media, the support, and all of the ancillary aspects -- besides the money that I am making! I'm excited to learn more as I follow your posts and you (and your savvy readers) dig in!
Oh, that's awesome to hear from someone who has been using Ellevest for a while.
This looks interesting - I will check it out. I've been working since I was 21, so I've contributed to a 401(k) for many years. Other than that, I haven't had much interest in investing.
This is a good thing to write about, because so many of us (like me!) were total infants when it comes to investing -- everything to learn, nothing already known. I remember a co-worker of mine (a male) who was somewhat familiar with investing, but wanted to know more, quoting a book he read, something to the effect that modern retirement plans force an uneducated population to invest their paychecks in something they know nothing about in order to have any hope of being able to afford to retire. My dad's company paid his retirement -- he just earned a paycheck and waited on retirement age. My mother didn't even realize that my siblings and I have to invest money out of our paychecks into a 401k or similar plan, in order to have any retirement whatsoever. I'm slowly learning about stocks, but I was also raised by '29 Stock Market Crash survivors, and the prejudice I've been taught by them, against putting ANY money in stocks is something I have had to overcome. My learning curve is slow. Thanks for putting it out there so I can't just bury my head in the sand.
I'm pretty active on other Financial and Early Retirement blogs. There is a series from a blogger (who I follow only minimally) that is considered the gold standard among the FIRE crowd. It is the jlcollinsnh Stock Series. He is not a broker; it's just an easy to comprehend guide to no-nonsense investing. It is very helpful. You can read it without divulging any personal information. I wish this had been available much earlier in my journey, because with help like this I could have retired much sooner.
For example, you will learn that Mutual Funds are not necessarily ETFs. And that ETFs are generally super cost effective compared to individual stocks. And that fees can eat away at your investments.
I am not including a link because this is not my blog, nor do I have any affiliation with jlcollinsnh. I just love to see women become financially literate and make good choices*. If you are interested in learning more, just start typing it into your browser and it will pop right up.
*I am not for the world suggesting that Ellevest is not an awesome choice. I'm going to check it out further myself. I just know that some people may want to learn more without revealing their personal information before they're ready to and this site is straightforward and no-nonsense. Think of it as checking two books out of the library, not just one.
Finally, dear Kristen, I thank you with all my heart (on Valentine's Day, no less) for taking this important subject on. I always knew I wanted to retire early (aka FIRE) and that my retirement would most likely be completely self-funded. It was a long, lonely journey. So many women (and families) stand to benefit from your take on this important and overlooked topic. To know they have a friend in The Frugal Girl is priceless. #askmehowiknow.
I Second jlcollingsnh !
Diane - thanks for clarifying that ETF are not mutual funds, though they do have a lot of similarities. I stand corrected!
I love this topic!
I've been reading many financial blogs and finally took the plunge to start buying stocks/ETF's...Of course, the market isn't doing well right now 🙁 but I'm hoping it picks up soon!
I also opened an IRA and a 401k. Since the 401k is basically stock market dependent, it hasn't been doing well either, as it's through my employer and my choices were limited. It's all a gamble, but historically, stocks have done well over the long term. If this doesn't increase in value, I didn't put a ton of $ into them, so it won't be too bad.
Which brings me to investing in rental properties. DH and I purchased two rentals and have done well so far with values going up and great tenants. Diversifying our investments are really key.
I'm trying my hand at this stuff and I'll see what happens! Ask me in a year!
Great Topic!
Thanks for sharing.
I hope to see more posts about investing in the future. It's a great reminder that while what we do day to day is important, we also need to be planning for the future.
Yes it's very important for women to learn about investing! I definitely have more investing knowledge than average women but I'm no expert myself so it just shows how behind some women can be about investing.
Here's a third vote for JL Collins, and another great resource is the Bogleheads forum. Great topic, Kristen. Learning about investing is a critical move for all of us!
This is fantastic! And so timely! I've gotten more into investing this year. I'm about to be 26, and I know I need to use the time I have on my side to make a bigger impact to my future finances. I just moved my investments from Acorns (the fees were crazy high) and into Vanguard ETFs. Vanguard was admittedly VERY frustrating to set up, but I'm getting the hang of it. I'm only using funds from freelancing, too, so my investments don't have an impact on our "real" budget. I think the best way to learn about investing is to just jump in. We can do it!
Yay! I'm excited to learn alongside you. I've followed you for 6 years now learning how to waste less food, make quality purchases that will outlast me and now I've been starting to learn more about investing and wanting to feel more equipped.
I'm in Canada and somethings will be different, but it's nice to read along with someone who's figuring out that same chapter of finance. 🙂
I’m so glad to read that you are writing about investing! It is a subject that is confusing to so many people. My parents have been frugal all their lives and were putting their savings in a savings account for years before I started guiding them. Oh, what they could have made off that money all these years!
I have not heard of Ellevest, and I’m not sure how being woman-specific is any better than any other investment company. (I’ve been a very happy Vanguard client my whole adult life despite being a woman.) But if Ellevest can get more folks investing wisely then more power to them. I’m looking forward to hearing about your experience.
I agree Amanda, I felt the women-centric focus was a little gimmicky to me and I would be more interested in how it compares in terms of fees with something like Vanguard index funds. I hope you dont mind this critique Kristen, but instead of starting the series by promoting a particular company it might have been nicer to keep it purely educational initially. And then armed with more knowledge, women can choose the company and investment vehicles that make sense for them. I feel like an easy user interface does not necessarily indicate the best investment strategy... I do believe you are highlighting Ellevest because you are happy with the company yourself.
You "do not need whiskers" to invest on Vanguard or Fidelity. I resent the idea that women need their own company or platform for investing that will upcharge them for the privilege. I love that they are trying to empower women, but if that empowerment comes with an upcharge...
Totally agree! Almost 20 years ago I went to the now mostly defunct Barnes and Noble and got two For Dummies books - one on Personal Finance and one one Investing. SO educational and very simply explained. Like many of you, my parents never taught me this and they themselves actually made very poor financial planning decisions so Im glad not to be following their example. Despite graduating from a top tier college, I realized my practical education was pretty scanty and none of my peers knew much more than I did. I wish all high school students had a workshop series focused on these topics (such as tax returns, how to interpret health insurancy policies, etc). Its a little crazy that these topics are so fundamental to everyday real life but we are more or less forced to fend for ourselves.
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