Your Money Coaches are Here: Financial Advice From the World's Top Female Venture Capitalists
By Genevieve Field
Financial-world insiders often refer to billion-dollar businesses as "unicorns" — rarer than rare. The women you're about to meet are unicorns in their own way: They're all founders of venture capital firms — in a field in which just 6 percent of partners are female. (If you've recently read about VCs — who invest other people's money in risky businesses — it was probably in the context of the high-profile gender discrimination case Ellen Pao filed and lost against her former employer Kleiner Perkins Caufield & Byers.) Combined, Kirsten Green, Jodi Sherman Jahic, Aileen Lee, Laura Sachar, and Halle Tecco have invested more than $1 billion in start-ups that may have already made your life happier, from the designer dress rental company Rent the Runway to home decor site Guildery. But they say they won't rest until you are investing too.
It's an ambitious goal, given that only 55 percent of millennials are saving for retirement, according to Wells Fargo. Most who don't save say it's because they feel they're earning too little to do so, but that's not true, says Tecco, founder of the firm Rock Health: "You don't need to have a head for numbers or even much money," she says. "You just need a healthy curiosity and a desire to learn." We all have that. And in case you have other money questions, Glamour got those answered too. Let's go.
I've never invested before because I'm scared I'll lose all my money! How do I get the guts to dive in? —Laniesha, 27
Jodi Sherman Jahic: I relate to how you're feeling! I was a DJ in college, into alternative music and tech gadgets, not finance. But eventually a professor pulled me aside and encouraged me to look at finance as a career. I wish more women had that kind of encouragement early on. We grow up thinking investing is this heavy science. And it's not true at all. You make investment decisions every day: When you purchase something significant, like a designer handbag, you're doing your research and deciding, This will provide more value to me over time than the money I'm spending on it. Making a trade is no more difficult than that.
Halle Tecco: Investing can be scary. But as a VC, I'm more concerned about not doing enough than I am about losing our investors' money. That's how you should approach your own finances too.
Is it worth it to invest in my 401(k) if I can put in only $100 per paycheck? —Phoebe, 22
Kirsten Green: It's OK if what you have to invest feels like a token amount. If you invest $100 twice a month for 20 years and earn even a fairly conservative 6 percent return per year, you'll have almost $90,000. It's about creating a habit, and the more you do it, the more comfortable you'll become at it.
There are so many investment options—how do I know which stocks or bonds or mutual funds to choose? —Anna, 32
Halle Tecco: Start by investing in a couple of index funds—research the best ones at money.usnews.com. You can choose them in your 401(k), or if they aren't offered as part of your company's portfolio, you can get them in an account that you set up for yourself at an online broker like TD Ameritrade or Scottrade.
Aileen Lee: I agree that index funds are the best way to start. Keep things simple: My retirement account is in a supersmart automated investment site called Wealthfront. You take a quiz about what your risk profile is, they recommend an allocation for you, you give them your money, they do the rest! I watch the start-ups I fund at Cowboy Ventures closely, of course, but once my own retirement investments are automated, I ignore them.
Is it always true that the riskiest investments have the biggest payoff? What if I want to play it safe? —Lisa, 40
Halle Tecco: You can be conservative and still profit over the long run. Remember: Diversity offsets risk, so you might choose a "blended" index fund that combines stocks (riskier) and bonds (more conservative). There are also "targeted" funds, which self-balance to become more conservative as you get closer to retirement.
Kirsten Green: But it's generally true that the higher the risk, the higher the potential reward. When you're under 50, you can be a bit riskier, have some fun—if an investment does go south, you have time to recoup any losses. So I'm all for putting 5 percent of your investing kitty into something that's a bit of a gamble.
Aileen Lee: And when I take that risk, I like to invest in something I believe in. When I started going to Costco and loving it, I should have bought some Costco stock! The same thing with Starbucks. Tune in to those moments when you feel a connection with a company, then Google it. Read analysts' reports about the stock; does the company have a history of steady growth (good), or lots of ups and downs (bad)? Also, read up on the CEO. When we're investing in a young company, I look at glassdoor.com to research the chief officers and employee satisfaction. Studies have shown that companies with satisfied employees have more valuable stock. That info helps you feel more confident.
I want to pay off my college debt as quickly as possible, but that means I won't have money to invest for years. What should I do? —Keesa, 26
Kirsten Green: It depends on the interest rate of your loan. The higher the interest rate — like the kind on most credit cards — the more you benefit by paying off the debt early; if it's lower, like the kind on many student loans, it's better to invest some of your earnings and pay back the loan over time. LearnVest has an online calculator called "To Pay Down Debt or Invest?" that will help you weigh your decision.
Halle Tecco: But it's not all about what the numbers say. On my 31st birthday I decided to pay off my student loans. I had very low interest rates, but for me it was really a mental burden that I wanted lifted. I wanted to be debt-free. Sometimes investing isn't always rational — and that's OK.
I'm interviewing for a new job. How can I negotiate the best salary? —Jess, 24
Jodi Sherman Jahic: Do as much research as you can on the going salary for the job. PayScale is great for that. Once you're armed with all the information, you'll be more relaxed, which will put your interviewer at ease too. When I'm hiring, I'm more likely to make an offer to a confident candidate who's also respectful, nice, and polite than I am to one who's tough — or at least one who's pretending to be tougher than she is. Authenticity goes a long way.
Aileen Lee: When I was younger I never planned for these conversations, unfortunately. Have the conversation with yourself multiple times beforehand. Talk through: What am I looking for? What are they going to say? How am I going to respond? This is not casual watercooler talk! Practice!
I'm ready to buy my first home. Any advice? —Colleen, 31
Kirsten Green: Find a real estate broker you can trust, who takes time to get to know what your objectives and resources are—she won't show you homes beyond your reach, which is crucial, because you will fall in love with the more expensive home.
Halle Tecco: When home shopping, look at the details that matter and ignore the things that are easy to fix. Purple paint costs 40 bucks to redo. But what matters is: What's happening in the neighborhood? Is it on the way up, or is it decaying? Also, is there a new roof, new electrical? Look at the things that will cost you a lot of money down the road.
What's the best personal investment you ever made? —Amanda, 30
Halle Tecco: I spent almost $150,000 for business school. It was a lot of money in my twenties but the best investment I made in my career. It allowed me to jump several rungs above where I was before. Higher education might be expensive, but it will allow you to do what you love at the top levels.
Laura Sachar: I agree! We should consider our education, well-being, and connections valuable commodities. I recently hired a nutritionist to help my family eat right, which was an investment in our health. Whether it's joining a nice gym that you will actually want to go to or attending networking events, spend the money, take the time. No matter how high up the ladder you get, never stop investing in yourself.
Maria Bartiromo has reported on business and economy for years. Learn more about the pioneering journalist by watching her MAKERS story.
Genevieve Field is a Glamour contributing editor.
More From Glamour:
• Carly Fiorina Takes On Donald Trump, And More Must-Read Election News
• 10 Times Amy Schumer Was Totally Right About Life
• The Most Entertaining Dancing With the Stars Contestants From the Past 5 Seasons
• 4 Office Fashion Rules From a Woman Who's Dressed Kate Middleton
Photo Credit: Philippe Regard via Getty Images