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Power and Money
From the time I was in my teens, I knew my calling. After I read an article about a key Wall Street player, I decided that I, too, wanted to be a risk arbitrageur investing in securities in the midst of takeover transactions. I was fascinated by the markets and wanted to make money because I believed it would give me power over my own destiny. My mother, who was in a traditional marriage with no control over her or our family's finances, had planted deep within me the connection between money and my independence. I never wanted to be in the position where I had to ask permission before I could act.
Granted, this wasn't a typical ambition among my girlfriends growing up in L.A., but I didn't appreciate until years later how truly outside the box pursuing a career in risk arbitrage was among women at that time!
I applied to only one college -- the Wharton School at the University of Pennsylvania -- and was fortunate to be accepted. After graduation, I headed to Wall Street and worked as I had dreamed. A few years later, I formed a hedge fund with a former colleague and today am the majority principal of that firm.
I have always wondered why more women did not look into owning their own funds. Granted, it is a high stress, high risk business, but it also offers high rewards and control. I have been able to have a family and to dedicate quality time to my two sets of twins and my husband, as well as to serve on the boards of The Michael J. Fox Foundation for Parkinson's Research and Montefiore Medical Center. More recently, I have also enjoyed being a member of the CNBC Fast Money cast. As a result, like every other working mother, I am exhausted all the time but feel immensely fulfilled.
I can't tell you how many women I have met who prefer to avoid the topic of money, either because they have been taught to find the topic distasteful or unseemly or because they choose to remain uneducated and dependent rather than shouldering the responsibility of understanding. It might sound harsh, but I have found out that it is also true. When I mention that I run a hedge fund, even sophisticated, professional women who live at the peak of the socio-economic pyramid have responded, "I don't understand the way hedge funds work. They are too complicated. I don't think I could qualify." And more often than I would have believed possible in this day and age, "My husband is the one who handles all our finances."
Would you surrender participating in what religion you wanted to raise your children or give up casting your own ballot in the voting booth? Then why would you surrender your say about finances that can determine where you live, where you send your children to school, which house you buy or, ultimately, what to expect in your retirement?
Women want to be powerful -- and we have made enormous strides -- but we have not yet fully embraced controlling our own financial destiny. While money certainly isn't everything, for good or bad it nevertheless drives our economy, our society, our world. This means that as long as we women don't own our finances, we are depriving ourselves of taking a full seat at the power table.
One of the reasons I love what I do is that it gives me the opportunity to demystify finance for women, to get them to ask questions and become more engaged in making their own decisions when it comes to money. I enjoy being on CNBC's Fast Money in part so that audiences can watch a woman who is as well informed about, and invested in, the market as her male counterparts.
I want women to know that they need to save, that they need to build a diverse portfolio and what levels of risk are right for their circumstances. I want them to know the difference between debt and equity, a mutual fund and a hedge fund, emerging markets and U.S. treasuries. I want them to gain the confidence to take smart risks.
My main concern is that there are too few women seeking to learn. We become too comfortable, or we think we are too busy. But what we are doing is giving away the power to make our voices fully heard in all the many ways we care -- whether philanthropy, politics, corporate governance, retirement, home ownership, our children's educational options or other area.
I am eager to begin the conversation.
Karen Finerman is the President of Metropolitan Capital Advisors, Inc and "The Chairwoman" on CNBC's Fast Money (weeknights 5PM & 12AM ET)
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The key to learning any subject is to want to learn it. To learn about money, do everything you can to understand it. That goes for both men and women. The idea that any particular sex, race, religion, or nationality is inherently better or worse about anything does not address the potential of the individual, only the perceived performance of the norm over a period of past time.
I stopped watching CNBC, because it seemed a complete waste of my time, but maybe I will look for Ms. Finerman there, after reading this article.
I know a girl that worked at a headfund.
She worked very hard and was passed up a lot for positions she could do. She said most of the girls there slept with her employer to move up the ladder. It wasn't based on merit as in that world it's slim chances for a woman. Some women may not have the intellect but the ones that do were risking their morals and ethics to make it. It was so common she said just about every girl that worked there was doing it. The Ceo slept with all the girls and so did the traders. He lost most of his fund last year. I would even say if he paid better attention to the markets and his investors money he couldve done something smarter about it instead of being a looney playboy.
I would hope women could exercise more prudence but it's hard to say after seeing stuff like that.
Interesting topic
Women want to be powerful and control their financial destiny? What is stopping you? Please don't give me the old "imanginary white boogyman" trip.
Some women like the idea of having a man in charge. They prefer to take a backseat. That is a sacrifice not one i agree with but hey they do it.
Many women dont make a lot of money so if the man makes more they are still asking for money from their husbands. I think it's important for women to have money somewhere in case of emergency because things happen. If you arent watching your money, its a cat and mouse game.
Most women want independence and more women are going to college and working now than men. Women are exploring unfamiliar territory and breaking down barriers regardless of how many men push them away.
Now chase that greyhound
Karen has a point of view. I like that she is trying to motivate or inspire women to become more involved in their financial future. But...I reject the premise that hedge funds and other financial instruments of mass destruction are areas for women, or men for that matter, to pursue.
Karen is just one more person, male or female, who is hopelessly conflicted by the greed-justifies-all approach to American capitalism. " I am rich and powerful, therefore do as I do, it will be good for you too".
Rather, I would inspire all people to share the common good, to cooperate and to nuture. You don't have to be a Wall Street insider to have control over your finances or life in general. Thanks, but no thanks Karen. I have several daughters and granddaughters who do not follow your lead and are doing just fine.
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Unfortunately any of the good points you made show up alongside your ad hominem insinuations. Unless you know Karen (I don't) or are her client, you can leave her out of it and still make a valid point. Focus on the issues, and not the people or personalities.
IMHO, women have less trouble admitting they're wrong and may be better suited emotionally to handle money on Wall Street than their male counterparts. I have read studies that indicate women may have a higher level of emotional intelligence (as a starting point) than men do. Two of the most important personal traits for a money manger/trader are emotional intelligence and self-awareness.
You are not on a higher ethical moral ground by the manner in which you, your daughters, or your granddaughters earn a living.
You might consider that Mutual Funds are weapons of mass destruction, not hedge funds. Mutual Funds, via the Investment Company Act of 1940, must be 75% invested at all times - even in large down turns in the market.
Managing a Hedge Fund and earning Incentive Fees as they're called, aligns the manager with the owner or fiduciary who has control over the funds. You'll never get that with Mutual Funds.
I think the point of Karen's blog post is that women can play a significant role in their finances, as well those of others. In the process, they can live with financial responsibility, financial independence, and a great deal of personal freedom and liberty.
Women don't want to be powerful, WOMEN ARE POWERFUL and those that don't know it yet will one day.
Many of them, unfortunately, will never realize it mergina,... and will continue to act like inferiors to their 'men'.
*disclaimer - I am a man, but have long recognized that women are, at least in some ways, one hell of a lot smarter than us guys - in other ways, not so much*
Well, you make it sound like women should get interested in investing so they can lose the money to a bad economy rather than their husbands losing it. I think that is fair as everyone should have equal play. However I think both women and men are best off staying away from hedge funds. Better to do other things.
Women should get into investing bc they may have to make major decisions like this for themselves or the family, they should have some input. Investing isnt just about going to a broker and saying what should i do now!!
Women cannot stay ignorance on areas of finance between their independence is so closely connected to money. It's our main source of protection for ourselves and our family. If people know that you are desperate they WILL take advantage of you, women should not stay in a position as such.
Hedge funds is another way to make money and most women stay away or seem afraid of it, they rather leave it to the men. DON"T leave it to the men, why let the men have all the fun!!!
Ms. Finerman,
From your article:
"My husband is the one who handles all our finances." is one phrase you would hear from my wife,... an otherwise amazingly organized Ph.D. in science who (I personally think) doesn't WANT to know how our finances are going day to day. I don't get it personally. How did I get delegated as the fiscally responsible one?
I've always been the one tracking the money, responsible for attempting to keep on something resembling a budget, working on and filing the taxes, and focused on saving enough money to more than get by.
Not that I am particularly good at it either.
I don't want to control her - so it isn't some sort of power play,.. maybe it is a reverse power play on her part?
Damn,... I should have paid attention during sociology classes years ago.
Awesome post Karen! Women do need to know more about money; how to earn and how to direct it.
I'd start with women in their 30's, 40's and 50's so their daughters don't wind up supporting in their so called golden years. These women, having been in the work world (presumably) will be pretty motivated to learn and succeed because the consequences of failure are very real to them.
As for the gender prism--you'd have to be a man not realize that things are very different for women. There are many of us that break barriers, but there are also many of us who do not.
I'd love it if you'd start a month web class for woman get the valuable tools you're offering.
Thank you for reaching back and helping.
How hilarious ! It might interest the author to know many men are not interested in living the so called dream that she has laid out. You need to take off your gender prism and realize people make their own decisions based on what makes them happy, not what makes you happy or what makes the female gender happy.
much like "magpies" alot of women only focus on shiny objects instead of the real wealth of the mind, this is their real problem. Palin is a fine example
very good points and very well said
You and other women in finances should write regularly about this topic. Classes in high schools and colleges directed specifically at girls would do a lot of good. I really admire women like you.
See Michael Martin's Profile
Well put Karen. You've been a great role model for a while now and I have many of my students read and learn about you. We need more women prop traders in the industry. To be bold, IMHO, you might consider teaching a class once a quarter or semi-annually. Access to great people (in person) is key - not through the TV - it creates a barrier.
Maybe you are confusing what you think is a woman's avoidance of discussing money with their distaste for the arcane and esoteric world of hedge funds, private equity and arbitrage.
Maybe women want to make, control and spend their own money but chose to earn it in ways that are less predatory and more in line with peoples' essential natures; that is earn it by actually making something or doing something that adds to society and makes them feel good, rather than working off the buying and selling of someone else's work.
Even the name of the CNBC show you are a participant of has a smarmy sounding, casino capitalist name Fast Money.
BTW, do you live in a community property state? Then you really only control half, you know.
Get a life and educate yourself dear, it pays.
you should take your own advise
typo advice
very good points and very well said
I have to agree. While you are brilliant, I cannot think of any professional endeavor that has less to recommend it than running a hedge fund. Hedge funds helped to drive the big banks out of business (yes, they were all running on empty - but you didn't have to help everything crater), and therefore bring on the financial crisis we are all trying to live with. I used to watch a lot of CNBC, and Fast Money especially, but the attitude of everyone in big finance is that regular people deserve to be penniless and taken advantage of.
i agree, except for the comment about community property, which is inaccurate, since 100% of assets can be controlled during marriage by one or the other. it is only upon death or divorce that assets (and control of those assets) are divided.
i remember thinking about careers when i was younger and actively deciding that moving money around for the sake of making money was the lamest possible waste of a life. i wanted to connect to people, to the earth, to music and the things that make life worth living, not superimpose some derivative, mercenary and disconnected Wall Street "lifestyle" onto myself, where all i could talk about is money, real estate, designers, more money, and boring gossip about other vacuous people.
money is an irritating tool to get to what matters, period. if what matters to you is looking like a hotshot to shallow, insecure non-producers with poor value systems, then hedge fund manager is probably ideal. if you have any shred of confidence or humanity, it will be obvious to you that money-based jobs are a dead end and a waste of potential, and that you don't need to impress greedy losers. now THAT is empowerment.
Isn't it an individual choice the way you choose to live your life in general but specific to morals and ethics. Yes hedge funds are dangerous but so is oil companies and electric companies, etc. In a controlled environment people can perform with pride and dignity.
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