Why am I Creating Capital? To Solve the Investing Gap
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Home>Daily Capital>Personal Capital News>Why Am I Creating Capital? To Solve the Gender Investing Gap

Why Am I Creating Capital? To Solve the Gender Investing Gap

This week, Personal Capital hosted its inaugural Creating Capital event in Denver. It was a career and investing panel featuring the founder and CEO of Valley Girl, Jesse Draper, the COO of GoGirl Finance, Rebecca Jackson, and our very own head of business development, Catha Mullen.

Our goal in hosting the panel was really to start a conversation. The questions on our minds: what should we make of all the data showing women earn, save and invest less than men? What are the money issues that women may not know how to begin to ask? And as a company, how might we create a low-risk environment for people to ask and to share – to have a real dialogue?

I speak for the employees of Personal Capital who attended Creating Capital to say we were totally blown away by the energy and engagement of the professional Denver women who attended the event. In particular, we were impressed by the eagerness with which people wanted to engage in the conversation. Check out the event slideshow:

I’ve written up a re-cap of the event to try to capture the magic of the evening. But before I launch into that, I’ll start by sharing a little more data about the gender investing gap. Why might women need a different approach, you may ask?

Wages, Investing, and Confidence.

The Wage Gap has garnered plenty of media attention recently. Studies have shown that women earn 77 cents per every dollar a man earns, on average. According to Harvard economist Claudia Golden, that discrepancy is larger when you only look at college graduates: 65 cents on the dollar. Yikes.

But it doesn’t stop there. More men report that they are saving: 61% versus 50% of women, according to a study on GoGirl Finance. Studies of millions of 401ks have revealed that women invest 58 cents per ever dollar a man invests in his 401k. It turns out, the investing gap is worse than the wage gap.

There are lots of possible explanations for the investing gap. And there’s undoubtedly a lot more work we need to do to uncover, or “prove” the real reason(s). But there’s one hypothesis that we believe is worth investigating: perhaps the gender gap is due to a confidence gap.

Journalists Katty Kay and Claire Shipman write about a gender confidence gap in the cover story of the April Atlantic (2014). They use behavioral studies, reviews of personnel files and biological evidence to present a compelling case for why a gender confidence gap might exist and lead to the wage gap. The authors state: “Compared with men, women don’t consider themselves as ready for promotions, they predict they’ll do worse on tests, and they generally underestimate their abilities.”

Could a confidence gap also impact our ability to invest? American women are 44 percent less likely than American men to consider themselves financially knowledgeable, even though they are virtually just as literate. Even among affluent women who are incredibly successful in terms of income and wealth, 41% are “not at all” confident in their ability to invest.

Creating Capital: Starting a Conversation

Jack Welch said “Giving people self-confidence is by far the most important thing that I can do. Because then they will act.”  The idea behind Creating Capital is to empower women through learning, perspective and conversation. With that in mind, we thought hosting a fun panel with some inspiring women would be a good place to start.

On our inspiring panel:

  • Jesse Draper, a fearless founder and CEO of Valley Girl TV show, who flew in from filming in San Francisco to share her story of taking big risks.
  • Rebecca Jackson, COO of GoGirl Finance, shared with us her pursuit of meaning through finance (leaving Wall Street to educate others) and how her spending and savings habits have adapted over time.
  • Catha Mullen, our very own Head of Business Development, who told her story of moving from Wall Street to Personal Capital and how she’s thought about taking on new and bigger responsibilities after Stanford’s Graduate School of Business.

We were honored that Paul Washington kicked off the event representing the Denver Mayor’s office as the Executive Director of the Office for Economic Development. Paul said the over 100 women and men in attendance was proof of what an important topic personal finance is. Here’s a picture of Paul with our panel.

Paul Washington and Panel

We first talked careers. We asked the panel about how they approach having those big conversations with a boss. Catha said: “It’s not always obvious timing when you should ask for a raise or promotion.” When asked about what to do at a company without a rulebook, she said “write the rulebook!”  Jesse reiterated that sometimes taking risks means acting when the time might not feel right. When it comes to launching a company, for instance, Jesse said: “No time will feel like exactly the right time.” But if you have conviction, there comes a time when you have to “just dive in!”

Then, our panelists shared stories on how careers are intertwined with finances. Rebecca Jackson, who was a New York financial services vet before joining GoGirl Finance as COO, said, “I have had a personal finance lobotomy since leaving Wall Street”. Rebecca said she thought of money mostly in terms of her paycheck. She said, “On Wall Street, I got good at asking for money but, I wasn’t good at putting that raise away!” Rebecca said that because women live longer than men, we need to pay extra attention to our retirement accounts.  She reminded us to max out 401k for employer match and not to spend all of that raise.

Rebecca said that using the Personal Capital app helped her re-focus from income to long-term wealth. Seeing her Net Worth in the Dashboard was a wake-up call. Rebecca now uses the app to have quarterly check-ins with her husband on spending. She also shared a personal trick that works well whereby they create judgment-free zones so she can buy leopard-print shoes and he can spend at REI!


The panelists agreed that with personal finance decisions, there are times when it’s important to get a second opinion. Seeking an expert view is one way to go: “A financial advisor can provide valuable guidance,” said Jesse. Another is doing your research. Catha prompted the audience to take advantage of digital tools and spend a little time “on Google.” And finally, your friends can be great resources for – and recipients of – personal finance intelligence. Rebecca said not to feel intimidated by know-it-all colleagues or friends. “It’s easy to make mistake that if someone’s earning lots, they’ve got their financial ducks in a row – not always!”

Following the panel was a thirty-minute Q&A that ended up being both questions for the panelists (such as “when do I ask for a raise if it’s not obvious?” and “how do I think about the trade-off between paying down my student debt and investing?”) and stories shared by participants (“don’t underestimate the importance of a rainy-day fund!”).

On our photo wall, we asked people to fill in “I’m #CreatingCapital for…” and we heard:

  • #CreatingCapital for Equality
  • #CreatingCapital for my Future
  • #CreatingCapital for Financial Freedom
  • #CreatingCapital to do Good + Give Back
  • #CreatingCapital for Launching my Dream


Creating Capital: Continuing the Conversation

My favorite was “#CreatingCapital for Peace of Mind.” That’s the reason I joined Personal Capital. It recognizes money is an intensely private thing. The app is completely secure and it actually helps you figure out what to do in a risk-free zone. You can see your current net worth – in the privacy of the software. You can also get a check-up on your asset allocation – without feeling judged. The app makes recommendations for you, and you can work with an advisor to implement the changes. Plus, you have someone to call for tricky questions like rolling over a 401k or opening a 529 for your kids.

I believe Personal Capital is uniquely situated to help solve the women’s investing gap. It not only combines awesome digital apps with individual advice – creating safe spaces to learn about money – but the company is fiercely committed to changing the paradigm of traditional financial services to make it convenient and accessible for customers (designed around their needs). While we’ve still got work to do to “solve” the gender investing gap, I think Creating Capital was a great step in the direction.

To sum it up, Creating Capital is about:

  • Creating conversation – sharing ideas, stories and tips
  • Creating confidence – we are more financially literate than we think
  • Creating goals – financial advice depends on what you want

And finally, in the spirit of conversation, what do you think? Speak up! We’d love to hear from you. What questions do you have? What ideas do you have to solve the gender investing gap? What does Creating Capital mean to you?

Photo Credit: Kiem Vu

The content contained in this blog post is intended for general informational purposes only and is not meant to constitute legal, tax, accounting or investment advice. You should consult a qualified legal or tax professional regarding your specific situation. Keep in mind that investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money.

Any reference to the advisory services refers to Personal Capital Advisors Corporation, a subsidiary of Personal Capital. Personal Capital Advisors Corporation is an investment adviser registered with the Securities and Exchange Commission (SEC). Registration does not imply a certain level of skill or training nor does it imply endorsement by the SEC.

Kate is fiercely dedicated to solving the retirement crisis in America and helping women tackle money issues. She was a VP in the Office of the President and Chief Operating Officer at BlackRock before leaving to Harvard, where she's currently pursuing her JD and MBA degrees.
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