A clever and competent reader sent us this article, written by Sallie Krawcheck, who used to be a CEO at Merrill Lynch and is currently the CEO and founder of Ellevest, a digital financial adviser for women.
In other words, Sallie’s an accomplished and successful businesswoman/entrepreneur, and I give her mad props for that. I just think her article is completely idiotic. Let’s go through it bit by bit, shall we?
To summarize, Sallie seems super tense about the recent Chase bank Monday Motivation tweet hullabaloo. If you missed out on that, Chase’s twitter account tried to be clever and hip and tweeted out advice on how people could manage their money better. BEHOLD:
Now, if you’re a Normal Human Being who isn’t constantly looking for things to be mad at, you probably would read that, maybe find a little humor in it, and move on with your life. That’s what I did. I was all, “Yeah – that’s actually great advice, Chase. A nice reminder for folks of super easy ways to save money! And look at you being all clever about it. Good for you.”
That was my reaction to Chase’s tweet, because I’m not constantly twisting myself into pretzels looking for things to be outraged about.
But AOC, as we are all well aware, is Queen Twisty Pretzel. She’s like High Priestess of Outrage, and so she and Elizabeth Warren and others clapped back at Chase, basically to make the point that Chase CEOs are greedy evil jerks and HOW DARE they money-shame people when they’re such greedy evil jerks who charge super high fees and take government bailout money. HOW DARE a bank make a harmless, funny suggestion to people about how they could save more money. HOW DARE THEY.
Chase ultimately apologized and removed the tweet. This is how dumb our culture is right now.
So that’s part of the backstory that prompted Sallie to write her column. That, and a book called The Latte Factor, written by two financial management dudes. On Amazon, it’s described as follows:
“Discover #1 New York Times bestselling author David Bach’s three secrets to financial freedom in an engaging story that will show you that you are richer than you think. Drawing on the author’s experiences teaching millions of people around the world to live a rich life, this fast, easy read reveals how anyone – from millennials to baby boomers – can still make their dreams come true.”
Right away, Sallie takes issue with the fact that the main author and co-author are both middle aged white males, because apparently that immediately makes the entire premise of their advice sexist. She writes,
…the publication of a book called The Latte Factor, in which two self-styled experts on women and money–both middle-aged males–spin a “compelling, heartwarming tale” (the publisher’s words, not mine) of an older male barista patiently and carefully mansplaining to a young woman about money over the course of a few revelatory days. The crux of this advice is the oft-used trope: “Don’t buy your daily latte . . . instead invest the money and become rich.” (Spoiler alert: He may first appear to be a barista but–wait for it–he actually owns the coffee shop. And the building. And a whole bunch of other buildings.) This book follows in a long tradition of personal financial advice for women packaged into simplified, bite-sized nuggets that boil down to giving up frivolous expenses, starting with the fancy coffee.
And then, Sallie shares her thoughts. And she has so many, you guys! In fact, she begins by saying, “I have so many thoughts on this. So. Many. Thoughts.” And she number lists them and everything! Let’s review.
1. The math doesn’t work. In order for that one latte a day (at $5 per latte) to earn you that $1 million over 40 years, you would need to earn 10% annually, every year, year in and year out.
Seem reasonable? Well, the stock market has gone up 5.6% annually over the past 20 years, while individual investors have earned 1.9% over the same time frame. So either the stock market needs to do close to two times better than it has in the past 20 years (possible but not likely) or you need to turn into a super-human investor. In your spare time. In a way I’ve never heard of any part-time–or full-time–investor ever doing. (Possible, I suppose, but not likely.)
So the advice, while certainly memorable, doesn’t work so well.
Soooo, her argument here is that in order to earn $1 million over 40 years by giving up a latte a day, you’d have to earn 10% every single year, and the stock market hasn’t done that well for the past 20, and you basically have to be a super human investor to make that happen. Now, she’s the financial guru – not me – but if she’s suggesting that it takes super human investment powers to have a 401k or IRA, she’s the one who’s “splaining” to everyone, making the assumption that we’re all too dumb to do anything other than have a regular savings account earning 1% interest.
But let’s assume she’s right, and that your one latte a day ($5) only earns half of what The Latte Factor authors suggested. Are we seriously criticizing them for suggesting that you could save a HALF MILLION DOLLARS by giving up a cup of coffee each day? Why? Why is this bad advice? What if it meant you ended up saving $250,000 over 40 years? This is bad now?
She goes on with her many many thoughts:
2. Okay, is it me, or is the whole latte thing patronizing? It’s not a martini-shaken-not-stirred, is it? Or a six-pack. Or a ribeye. Or the new tech gadget. It’s a latte. Dripping with its feminine connotations as a milky, sweet, steamed, flippant luxury. And thus, presumably, it’s an easy candidate for the mild contempt that its dismissal implies.
“Dripping with feminine connotations?” Wait. Is Sallie suggesting that men who drink lattes are emasculated? Is she saying women who drink martinis or beer or eat steaks or geek out over the latest iphone are exhibiting masculine behavior?
What are men who drink lattes to make of her suggestion that their beverage of choice warrants contempt or dismissal? Are they to be admired for their femininity? Do they deserve scorn for their lack of masculinity? PLEASE TELL ME MORE ABOUT HOW TO FEMINISM, Sallie.
3. Which gets to the broader issue of our society patronizing women on money. From childhood, we as a society send girls messages that they are bad with numbers, relative to their brothers. Still today, parents talk to boys about making money and investing and to girls about saving money and being careful with it. Girls get lower grades in math than boys for the same answers at school. And girls get lower allowances at home than boys for the same chores.
As we get older, we women are told that we’re bad with money in a thousand small ways: Women’s magazines–on the rare occasions that they have written about money–have presented it as a challenge, describing financial planning as “difficult” so “you’d better buckle your seatbeat,” and showering us with money quizzes to find out whether we’re a “Carrie” or “Miranda” money personality. In fact, Carrie herself was a tough, savvy, modern New Yorker in every way–except when it came to money. There, she bought too many Manolo Blahniks and so couldn’t afford to buy her apartment. Seriously.
A test: How would this play on CNBC? If it’s not something that Mike Santoli and Jim Cramer would talk about with straight faces, then it’s patronizing. If Mike and Jim aren’t discussing whether they prefer to give up their latte or their facials–or maybe not buy as many shoes–in order to better prepare for retirement, then no one else should shovel that on women either.
I’ve never once felt that society TOLD me I was bad with numbers. I just AM bad with numbers. BUT, I’m also the one who manages our financial household. The same is true for Daisy. Anecdotal evidence? Sure. But I’m probably just as likely to find sources that argue the opposite of Sallie’s references, as I am those that support them. Some scientists say there are biological differences between how men and women perform at math. Some say it’s environmental. Some say no differences exist and we’re all just making them up. There is no consensus here. But my husband and my son are way better at math than I am. Just saying.
I didn’t watch Sex and the City and take away from it that Carrie’s money mismanagement was somehow symbolic of all women. High powered attorney Miranda married a blue collar dude with modest income. Didn’t that kind of balance that storyline out?
But back to the lattes. The very suggestion that women should feel they’re being patronized when lattes are mentioned is sexist. Doesn’t Sallie see that?
4. But, as infuriating as it is to be patronized, that’s not the biggest issue. All this nonsense about lattes and shoes is shifting the attention–and thus the blame–for the underlying systemic money challenges women face, to the women themselves. The pink tax, the wage gap, the debt gap, the funding gap, the domestic work (and emotional labor) gap, and–my personal crusade–the investing gap.
Don’t look over there, where it says that the gender pay gap is decades away from closing for white women, 100-plus years away for black women, 200-plus years for Latina women: Let’s focus on that the small luxuries you can give up. Don’t pay attention to the fact that women carry a higher student loan burden than men do: Have you clipped your coupons? Let’s not discuss that women are charged higher rates on loans and denied mortgages more frequently than men: Take this money quiz.
The fact that the U.S. is the only developed country in the world without a mandated paid maternity leave? The fact that just 15% of companies have a paid leave policy for their employees? The fact that 81% of women report having been sexually harassed? Well, those don’t really fit the personal-guilt-being-sold-as-personal-empowerment narrative that sells so many books.
Women have effectively internalized the messages that our society sends them about money, and the result is that the primary emotion so many of us feel about money is shame. We feel shame when we are in debt; we feel shame because we spend too much, certainly; we feel shame because we earn too little–and we even feel shame because we earn too much. This is particularly so if women earn more than their male partners–which even today is a such a taboo that both parties will lie to the federal government about their incomes.
The result of this is that women prefer to talk about anything–literally anything–more than money, including their own deaths. At a time in which we openly speak about sex, money remains for women the final frontier of shame.
Yeah – as soon as she cited the now totally debunked gender pay gap as an Actual Thing, I knew this was a lost cause. Sallie – OMG. This is embarrassing. If you, an accomplished CEO, can’t understand the very understandable and logical reasons that any gaps in wages exist, even after all of the evidence has been presented every which way to Sunday, you literally have lost any shred of credibility.
Her other stats can easily be argued as well (and have been, masterfully, by lots of super smart people), but what’s the point? She failed on the most basic of them.
If you’re a woman, and your attitude about money is shame, then congratulations. You’ve taken the first step to recognizing that you, PERSONALLY, need to do better managing your finances. You’ve owned your problem, and now you can go about fixing it. Maybe you can even take the advice of Chase bank, because their now-deleted tweet was actually great advice for ANYONE, man or woman.
5. The further result is that, as a society, we have masculinized money. While girls are being taught to be careful with money and to save it, boys are being taught to pursue money and to grow it. They are taught to be confident around money, so much so that they overestimate their investing skills and underestimate their need for financial education. It is likely no wonder that the money industries are overwhelmingly male, even as the research tells us that women are better investors than men, both as individual investors and professional investors.
As if to drive home the point that money is male, the symbol of Wall Street is a bull. A big, snorting, anatomically notable, powerful bull. (Its recent female counterpoint is a statue of a little girl. A prepubescent girl. A brave girl, certainly, but one who–if she went to work at the company that placed her there–may have been the victim of gender discrimination on pay, according to a lawsuit that become public shortly after the statue was placed there.)
So this isn’t about the lattes. It’s never been about the lattes. Or any of the other ways we women are told we’re deficient around money. It’s about changing the narrative to recognize the real challenges we face as women and tackling real issues. It’s about demanding a fairer playing field from our institutions (paid maternity leave, anyone?). It’s about holding the companies at which we work accountable by demanding that they report out, and close, their gender pay gaps. It’s about giving all of our children the tools to live the lives that they deserve. It’s about balancing out our existing power structures. As Gloria Steinem has said, “We will not solve the feminization of power until we solve the masculinity of wealth.”
If we as a society have “masculinized money” that’s a damn shame considering how much effort we, as a society, have put into emasculating men. But that aside, Sallie’s argument here has devolved into complaining about the Wall Street symbol being a bull. Seriously? This is what we’re doing now? Yeah – that makes women look so strong and powerful, when we bitch about logos. (Insert all the eye rolling emojis here.)
The real challenges and issues I face include trying to extricate myself from feminists like this. I don’t want in any way to be lumped into a category of women who get pissy about books about lattes, or who get miffed about logos, or who whine about non-existent pay gaps. I don’t want to be looked at as a woman who thinks it’s somehow empowering to demand paid maternity leave from employers. I’m not dissing Ivanka Trump, but seriously? If an employer wants to offer paid maternity leave – awesome. They’ll likely be seen as a really great employer and will be able to choose the best of the best to hire. I don’t want them to be mandated to do it, though.
Sallie quotes Gloria Steinem at the end of her piece, y’all. ‘Nuff said.
Oh, I almost forgot – here’s how she ended her column:
So, ladies, buy the f***ing latte, because I’m going to need you caffeinated when we do this thing.
What – so women can’t get anything accomplished without being caffeinated now?