Priscilla Almodovar, President and CEO, Fannie Mae Sallie Krawcheck, Co-founder and CEO, Ellevest Moderator: Allie Garfinkle, Fortune
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00:00Sally, Priscilla, I am so excited to be here with both of you.
00:05In preparing for this conversation, I was thinking a lot about something that you brought
00:09up, Priscilla, which is Virginia Woolf's A Room of One's Own.
00:12You're laughing.
00:13You're laughing.
00:14You're already laughing.
00:15But it actually was really serious.
00:16It drove home something to me that is an essential truth, which is when we're talking about women's
00:21wealth, we're not just talking about money.
00:22We're talking about agency.
00:23And Sally, when I told you about this the other day, you said we're talking about power.
00:30How high stakes is this?
00:31I would love to just hear what you think.
00:32Go ahead.
00:33Please.
00:34Yeah.
00:35Great to be here.
00:36It is high stakes.
00:37And it is about agency, which is what it really comes down to.
00:39Fannie Mae, it's all about home ownership for us.
00:42And today, there are 11 million single women who are homeowners more than men.
00:47And women, despite it being a tough housing market, desire to be a homeowner.
00:52And when women have wealth and homes, it's not just themselves.
00:57It's the families.
00:58It's the children.
00:59It's the parents they're caring for.
01:00It's actually the wake of women when you invest in women is way more powerful than just that
01:06individual woman.
01:07So I think it's women's time.
01:09Yeah, I agree.
01:10Let me tell you why you care.
01:12So first of all, the gender pay gap, as we all know, is about 80 cents to a white man's
01:16dollar.
01:17The gender wealth gap is about 30 cents to a white man's dollar.
01:21For black women, it's a penny.
01:23And it's been going backwards, whereas the pay gap has been steady to increasing a little
01:27bit.
01:28Now, the reason we care on a macro basis, we love to say at Ellevest, nothing bad happens
01:33when women have more money.
01:35And when women have more money, they spend it.
01:37So the economy grows.
01:38Your businesses grow.
01:40Their families are stronger.
01:42Societies are fairer.
01:43Communities are stronger.
01:45Women give more to nonprofits.
01:47Women are more likely to believe in the negative effects of climate change and give money to
01:51them.
01:52Politics.
01:53Everybody's super happy with politics in this country.
01:55I know we are.
01:57Women give about 30 cents of political donations to a white man's dollar.
02:02But when they do, they tend to be politicians who agree with our points of view and are
02:08more family friendly.
02:09So everything gets better when women have more money.
02:12Today, with the gender wealth gap, you've got too many women who are stuck in marriages
02:17they can't leave because they don't have the money, stuck in jobs they hate because they
02:21don't have the money, getting chased around a desk at a job they hate because they don't
02:25have the money, not starting a business because they don't have the money, living smaller
02:29lives because they don't have the money.
02:31And finally, you care because of your companies.
02:35Women's number one financial concern is not having enough money and not building wealth.
02:40And as a result, the stress on them leads to presenteeism, which means they're sitting
02:44there, but they're worrying instead of working.
02:47Now, I want to start with housing on this end.
02:50What is the state of the housing journey for women?
02:53Yeah.
02:54So I agree with everything Sally just said.
02:56I will add to that, that women are, they're less confident than men when it comes to homeownership.
03:03They want to be homeowners, but only 30% of women feel they have the confidence to actually
03:09go through the mortgage process.
03:10So it tells you there's a gap there.
03:12There's like a confidence gap as well with women.
03:15Because society tells them to be less confident, right?
03:18They receive negative money messages their whole lives about, you know, financial planning
03:23doesn't have to be really, really hard.
03:25And so they're told to have a confidence gap.
03:28Yeah.
03:29And also, we do surveys just to get a sense of the understanding of the mortgage process.
03:34And women, there's a bigger disconnect with women in terms of the down payment one needs
03:38to buy a home.
03:39You know, they think 20% today, there's a lot of products where it could be 10% or 5%,
03:45even 3%.
03:46Also, FICO scores, you know, there's a real lack of understanding.
03:49Everyone in this room, hopefully, has that information, but you would be amazed how so
03:55many women don't.
03:56I think when you and I talked, right, especially, you know, the millennials, they are millennials
04:00and the Gen Zers.
04:02I'm not millennial.
04:03Right, right.
04:04I confess to Priscilla.
04:05I don't feel confident about it.
04:06Zillennials.
04:07I love that term yesterday.
04:08Zillennials.
04:09That's our future homeowner.
04:10That's that cohort.
04:11And they're the ones that don't understand what it takes to own a home.
04:14The other thing I find interesting, and I love that Sally and I are on this together,
04:18women today, when you look at the older women, in terms of their wealth, 66% comes from their
04:25home equity.
04:27That seems high, but it's not because they have more equity in their home.
04:30It's because they don't have other assets, right?
04:33But the average person is 50% because they have other assets.
04:36So, homeownership, from our perspective, again, it's not the all and be all.
04:40I don't want to suggest that it's a fast thing.
04:43Homeownership should be about, it should be lasting, it should be long term.
04:46It's not like a regular, you know, investment security.
04:50That said, it is part of wealth building.
04:54It's part of a portfolio, your personal portfolio, but the lack of understanding for women really
04:59just amazes us.
05:00So, there's a lot of work to be done there.
05:01What is your take on where housing fits in women's overall financial health?
05:05Oh, first of all, I love my house, you know, and so, absolutely, it's an important component
05:11of wealth building.
05:12In fact, I would argue, there have only been two scalable, predictable, over a medium to
05:20longer period of time, means to build wealth in this country.
05:25It's not entrepreneurialism that's too hit and miss.
05:27It's been owning a home, and it's been investing.
05:32And for home ownership, you know, the stats I've seen show that, you know, home prices
05:38increase about 3% a year, different amounts in different places, but it compounds on itself.
05:46Investing in the stock market since the early 1900s has returned about 10% a year, which
05:51compounds on itself.
05:53And if you had stayed invested for 15 years, you could have invested in any given day,
05:58any given day, and you stay in the market for 15 years, historically, you had a 98%
06:02chance of a positive return, and for 20 years, it was 99%.
06:07So I'm in favor of home ownership.
06:09I'm also really in favor of investing, which is what we do at Ellevest, because it's actually
06:13been less risky historically than women have thought.
06:17Yeah.
06:18One thing I will say, if I may, is, again, I'm not an advertisement for home ownership,
06:22because it's also understanding what it means to be a homeowner as well.
06:25I think the other thing we're finding about all consumers is, when you buy a home, buy
06:31one, first of all, that you could afford.
06:33And by that, it's, once you're a homeowner, there's a lot of other costs.
06:36That's the other thing that people don't understand.
06:38They think it's just their mortgage payment, right?
06:40These days, you have insurance, and that's going up with climate, taxes.
06:45By the way, if you own a home, the roof leaks, you've got to fix it, so it's about understanding
06:49what it means to be a homeowner, so you're lasting, you have lasting home ownership.
06:53So I just wanted to put that out there, so I don't sound like a walk-in commercial, but
06:57it is a responsibility to understand what it means.
07:00But investing doesn't have any of that.
07:03So you have to take them into account, right?
07:06You know, the housing is a big issue in this year's election cycle.
07:09There's an election coming up.
07:10I don't know if anyone's heard.
07:13But regardless of the outcome, how do you foresee this election cycle affecting women's wealth?
07:20Yeah, look, I can't talk about politics, but I will say this.
07:23I've been doing housing for a long time.
07:27It is the first time that I could remember where both sides are talking about housing,
07:32which really demonstrates that housing, obviously, it impacts the affordability crisis we have
07:37right now in this country, obviously impacts the underserved and the low-income more, but
07:41it's happening across all income levels, all ages.
07:45I mean, you have Gen Zers now living with their parents, right?
07:48That didn't happen before, right?
07:49You have home ownership now, the average age now is 35, 37 years old, before it used to
07:54be in your late 20s.
07:55So it's a real issue for people, housers, we call ourselves housers.
08:00It's an exciting time.
08:02Yes, it's an exciting time because people are finally saying, what's up with housing?
08:09And people still remember mortgage rates from just right before the pandemic, it was like
08:143%, 4%.
08:16By the way, historically, 6% is a low mortgage rate, but the consumer still hasn't adjusted.
08:21We've been trained.
08:22We've been trained.
08:23That's what you remember.
08:24Home prices, to your point, that's the one thing that we have the best economists.
08:28It's even surprised us how home prices continue to go up, right?
08:31So I think it's an affordability crisis.
08:34I think it's exciting that both sides are talking about it.
08:37Housing is not going to go away.
08:38You gave me a real shrug here, Sally.
08:39I'll talk about politics.
08:43And we all know the answer to this one.
08:46And a good part of the answer is the repeal of Roe v. Wade was many things, and it was
08:52a negative economic issue for women.
08:54It was a negative economic issue for their families, and it was a negative economic issue
08:59for the states in which they live.
09:01And that's just the beginning.
09:02You can clap.
09:03Right?
09:04Yeah.
09:05Well, boo, hiss.
09:06Boo, hiss.
09:07Yeah, I guess.
09:08You know, and then these states where abortion rights are being restricted don't have things
09:12like paid family leave, don't have adequate childcare and support.
09:16So it's a double and triple impact to women's wealth.
09:18I wasn't going to let them boo you.
09:19What's that?
09:20I wasn't going to let them boo you.
09:21No, no, but not boo me, but boo what's...
09:24Yeah.
09:25And that's before you get to tariffs and what the impact of those are going to be, et cetera,
09:28et cetera.
09:29So we all know the answer here.
09:31On the subject of other completely ubiquitous news, AI, how do you sort of see AI affecting
09:36women's wealth moving forward?
09:38I know you have distinct thoughts about this.
09:39Yeah.
09:40No, we're very excited about it.
09:41And I, by the way, I'm a fangirl of Dr. Faye Faye Lee.
09:44It was great to finally see her on the panel.
09:46The best.
09:47Yes, that's definitely a clip.
09:48By the way, before the speaker said about the New York Times article, I remember when
09:52I read the article, I noticed she was not on that list.
09:55So I was so delighted that it was right here.
09:56But in any event, AI has been really, for women in particular, it's allowing us to see
10:02consumers, including women, self-employed women, women who don't have a W-2 income.
10:07I mean, historically, the way credit has been available in this country has been through
10:11credit scores.
10:12Very often, you have to be in the credit system for that, right?
10:15So women, Gen Zs, millennials, their credit invisible, right, because they're not in the
10:19credit system yet.
10:21New to country as well.
10:23But also the gig economy, 30 million Americans are in the gig economy.
10:27So with technology, we now could underwrite a consumer, including women, that are not
10:33traditional W-2 income employees, and we have confidence in underwriting that risk by looking,
10:39if they give us permission, through their bank statements, we can look at that data,
10:43and we can, we're teaching models how to understand that information and take the risk that that
10:48person has the capacity to be a mortgage holder.
10:52So for us, it's exciting.
10:53The other thing that's exciting is consumers, one thing I will say, this is including women,
10:58more and more women and men understand their credit score now.
11:01So that's what I love about millennials and Gen Zs, they're using all the credit monitoring
11:05tools that are now out there, and they're monitoring their credit, which is a good thing.
11:09So I'm very, we're very big at fanny making on technology and how it's enabling us to
11:14see and serve more consumers.
11:16And women benefit from it.
11:18Well, maybe.
11:19So, you know, what they say, garbage in, garbage out.
11:24You know, mistruths in, mistruths out.
11:27And so let me give you a couple of things, you know, if we put in the world as it is
11:31today, then what comes out is the world as it is today.
11:35So a couple things that we all know, for example, one of which is we all know women are risk
11:40averse, right?
11:41That's why they don't invest as much.
11:43That's why they don't buy houses as much.
11:45We all know that women aren't as good at math as men.
11:47That's another reason they don't invest.
11:49We all know that women need more financial education in order to invest.
11:54We all know they don't enjoy investing.
11:56Those are things we know and are said all the time, and none of them are fucking true.
12:07But these are repeated so often that I had the nodding heads.
12:16So look, let me, we do a ton of research on women and money at Ellevest, a ton.
12:22Let me tell you one thing we found, again, another thing we all know, which is that women
12:26are not confident around money.
12:29What we, and so therefore, they don't have as much money because they're not as confident,
12:33they're not investing.
12:35No.
12:36When women get money, and I'm looking at you, great wealth transfer, right?
12:41When women get money, they become more confident.
12:46It's the relationship is inverse, which is why I personally am looking forward to the
12:50great wealth transfer.
12:51Not when the boomer husbands die, that part of it, but not all of them anyway.
13:01Should I say it?
13:02Should I say it?
13:03You can say it.
13:05I have nothing against middle-aged white men.
13:06I've been married to a couple of them.
13:12So I'm not looking forward to that part, but I am looking forward to when women get the
13:17money.
13:18We think about the millennials and the Gen Zs getting the money, but it goes to mom first.
13:23And I'm looking forward to when women have the majority of wealth in this country, which
13:26is coming up, the amount of confidence we will have.
13:29So one thing to watch out for, particularly for your daughters, is the media still gives
13:35women these negative messages around money.
13:38The financial planning doesn't have to be really, really hard, and they're like, oh,
13:42so it must just be really hard, and don't buy the latte, and don't have the facial,
13:48and don't have the avocado toast, and the pumpkin spice latte.
13:52The press goes berserk about that, because it's all those women spending their money
13:57that otherwise would make them millionaires on that frothy, pumpkin-y, delightfully spicy
14:04pumpkin spice latte.
14:06The Taylor Swift concert tickets.
14:08Well, you know what I loved about that is the media tried to mock women for that with
14:13the bracelets, and women just forget it, right?
14:17We're going, we're going to dance, we're going to multi-generational dance, and I loved it
14:22that women were stepping into their economic power and didn't mind the blowback they were getting.
14:29Any questions?
14:30How are you doing?
14:31No, I told, I've been, I've heard Sal speak before, you're just, we love you, I mean you're just great.
14:39I love you, too.
14:40You're the best.
14:41You know, one thing I'll just say on the wealth transfer, you know, there's a lot of hype
14:45about it, and you're probably right, I will say that it's about 84 trillion or something
14:51to be transferred.
14:52But if you really drill down a little bit more, it's a very high net worth individual.
14:56Of course.
14:57A lot of that transfer.
14:58It is, it is.
14:59And, you know, the average, like, six-year-old has maybe one million dollars of net worth,
15:02and they're going to spend it on health care, so I hear you.
15:04Those who have it continue to have it.
15:05But it's really a high net worth, so we have, I've looked at that.
15:09I will say this, I'm not as, you know, I have a 22-year-old daughter, and I have to say,
15:14I am really, like, I think these young women are, they're pretty smart and savvy, and technology's
15:21helping that.
15:22I really do.
15:23I have a lot of confidence in women, the questions you all ask, how you all communicate with
15:28each other.
15:29So we've just got to make sure that education is a big part.
15:32I think Fortune does an amazing job, but tapping those young women, getting them early, you
15:37know, in high school and college, I think women, young people are just savvier these
15:43days.
15:44So I'm very hopeful.
15:45So I'm hopeful.
15:46We have time for one quick question for Priscilla and Sally.
15:50Who wants it?
15:51And it's got to be a fast one.
15:54Anyone?
15:55Anyone?
15:56Over here.
15:57I'll project if there's no time.
15:58Is there anywhere in the world that this is being done?
16:03There's a mic right behind you.
16:05Is there anywhere around the world that you think that could role model this, and we could
16:09look at them and learn?
16:10Scandinavia.
16:11That was quick.
16:12That was great.
16:13That was incredible.
16:14That was incredibly quick.
16:17I want to spin that out, but we are running out of time, and I want to leave the audience
16:21with one takeaway from each of you.
16:23One piece of advice, financial or otherwise, that you think they need to remember when
16:28they walk out of this room.
16:29Make a plan.
16:30Have a plan.
16:31Financial plan.
16:32Yeah.
16:33I would ask you to remember nothing bad happens when women have more money.
16:36Nothing.
16:37And the best day to invest was yesterday, but if you didn't invest yesterday, the next
16:41best day is today, and then there's also tomorrow.
16:44It doesn't mean there won't be volatility along the way, but it does mean that if you
16:48can invest for the medium to longer term, particularly if you can get your daughters
16:52and sons started on this, the power of compounding is simply enormous.
16:56Warren Buffett, who used to attend this conference, always said that was the secret to his success.
17:01The secret.
17:02Not stock picking and trading and watching, you know, I won't say the name, but tapping
17:11into that compounding is really it.
17:13So for all of our daughters, opening brokerage accounts for them, opening investment accounts
17:17is key.
17:18If you want to leave our audience with one word, what would it be?
17:23Courage to invest.
17:24Money.
17:25Money.
17:26Money?
17:27Money.
17:28Yes.
17:29And as we've established, when we're talking about money, we're not just talking about
17:32money.
17:33Thank you all so much.
17:34Priscilla, Sally, thank you.