5 Things We Need To Do To Close The Gender Wage Gap, with Kelly Hollingsworth and Candice Georgiadis
Women are uncomfortable receiving more money than they think is reasonable. That internal ceiling called reasonableness is the real glass ceiling. It’s the thing we have to bust through to close the wage gap. When we conquer it, all the other ceilings will come crashing down as well.
As part of my series about “the five things we need to do to close the gender wage gap” I had the pleasure of interviewing Kelly Hollingsworth. Kelly is one of the few women in the world to manage her own hedge fund. She has a lot to say about how women can succeed in male-dominated industries. She also wants women to know that making money is a whole lot of fun. You can get more of her money-making advice at kellyhollingsworth.com.
Thank you so much for joining us! Can you tell us the “backstory” that brought you to this career path?
My mom delivered newspapers to support me and my two sisters. We didn’t own a working television. We gathered scrap wood from abandoned logging sites to heat our house. I used Crisco as a lip balm when all my friends had Bonne Bell Lip Smackers.
My first job was cleaning houses for $5 an hour. I was poor, but I pined for big diamonds. I wanted to trade my grimy rubber gloves for opera-length silk gloves. Making more money became my mission in life.
I put myself through college working at a steakhouse in Missoula, Montana. I generally ate free salad bar and baked potatoes. But once in a while, I feasted on king crab legs from the plates of spendthrift patrons who didn’t ask for a doggie bag.
A co-worker’s sister was a hedge fund regulator in Chicago. I had no idea what a hedge fund was, but I parlayed that one contact into my first job. I packed up a U-Haul and headed to the Windy City. I’d never encountered a toll booth before, and I remember panicking that I didn’t have enough change.
I bought a purple skirt suit with big shoulder pads and reported for work. I made $27,000 a year answering questions of hedge fund attorneys who earned a thousand dollars an hour. In these conversations, I noticed something striking. The male attorneys would take on work, and then call and ask me how to do the work. The female attorneys were different. They were already experts, and their questions were minor.
The men seemed to have most of the clients, so I guessed they were making most of the money. I took a lesson from their playbook, and decided to get out there and start earning, even if I didn’t feel ready.
I left the regulatory agency for a job on the for-profit side of the industry. I doubled my salary by asking for the biggest number I could say with a straight face.
I thought I’d hit my income ceiling, but then something amazing happened. Another hedge fund asked my employer if they could “borrow” me for a couple of weeks. They agreed to pay my employer three times what my employer was paying me, but I wasn’t going to receive one dime extra. My employer was going to pay me my regular salary, and pocket the difference.
This didn’t sit well with me. If there was extra money to be made from my skills, I was the one who was going to make it. So I quit my job, hung out a shingle, and began my practice as a legal and business advisor to hedge fund managers.
My income skyrocketed. My life changed. But I was concerned about other women who were struggling. One of my friends was a lawyer with Ivy-League degrees and amazing credentials. She was working as in-house counsel at a hedge fund, but earning less than a well-paid secretary.
This was in sharp contrast to the hedge fund managers — all men — that I worked with. They weren’t bothered by what they didn’t know. Sometimes this paid off for them, but often, it was the cause of their downfall.
I began to see under earning for men and women as the flipside of a single coin. When men under earn, it’s because they think they know a lot, when they actually know very little. When women under earn, it’s because they think they know too little, when they actually know a lot.
My lawyer friend who was earning a secretary’s salary was the first woman I coached on making more money. When she stopped mentally discounting her own skills, she quadrupled her salary. That was the beginning of my coaching practice for women who under earn.
Can you share the most interesting story that happened to you since you began this career?
One of my most meaningful stories is how I started my own hedge fund.
Early in my career, I set out to find the best undiscovered trading talent. In that search, I found a gifted trader who had an impressive history of day-trading the S&P 500. He earned a very stable income doing something that most people consider very risky.
He wanted to try his hand at trading “other people’s money” and I agreed to raise it for him. I was living in the Virgin Islands at the time. I was the only female partner in my firm, and my male partners said I was wasting my time. But I saw brilliance in his skills. I gathered up all the cash I had and started a little hedge fund. With only my money in the fund, I hired him as the trader, and I sat back and watched the profits roll in.
The first month I made money. The second month I made money. The third month I made money. Pretty soon, my naysaying partners were asking, “What is this fund you started? Can I get into it?”
They invested, too, and that’s how I became one of the few women in the world to manage her own hedge fund.
What I learned from this is that most people will tell you not to act on your great idea. If you wait for a cheerleader for your money-making efforts, you’ll be waiting a long time. You don’t get the cheerleaders until after you start making money.
Can you share a story about the funniest or most interesting mistake you made when you were first starting? Can you tell us what lesson you learned from that?
The biggest mistake I made was closing my hedge fund.
It was kicking out consistent income for me, so I moved back to North Idaho intending to buy a waterfront house and write novels about my adventures in finance.
I bought a tear-down on the water that I intended to rebuild. Then my trader told me he was done trading other people’s money. He wanted to go back to just trading for himself.
In my mind, this meant that my business was over. I built the fund around his skill, and I thought that without his skill, the fund was doomed. I called up my investors and told them I was sending their money home.
So there I was, in my waterfront teardown with a giant mortgage and no income. The monthly payment felt like a gut punch. Then the housing market crashed. I couldn’t sell and I couldn’t rebuild. The house had no heating system, so I spent the first winter dragging space heaters around from room to room.
Initially, I blamed the end of my income on my trader’s decision to quit. I was a victim in the classic sense of the word.
But then I realized the end of my income was not his fault. My income ended not because my trader quit, but because of my thoughts about him quitting. I thought he was irreplaceable.
If I could go back in time, I would tell my thirty-something self not to shut down that fund. I would tell her that opportunities are like cockroaches. Where there’s one, there’s two. Where there’s two, there’s four. You just have to look for them, because often they’re not in plain sight.
The fact is that my brilliant S&P trader didn’t just fall out of the sky. I went looking for someone like him, and I found him. If I could do it once, I could do it again. I could have hired someone else to trade the money. I didn’t see that at the time, so instead of keeping my hedge fund going, I closed it. My mind was closed to my opportunities, and that closed off the income I was earning from my fund.
Ok let’s jump to the main focus of our interview. Even in 2019, women still earn about 80 cents for every dollar a man makes. Can you explain three of the main factors that are causing the wage gap?
When we talk about the wage gap, we generally talk about factors outside women’s control. We discuss blatant sexism. We discuss rich white guys hiring, mentoring, and promoting other rich white guys. We envision them running in a pack. They wear the same suits, drive the same cars, and drink the same scotch. We feel left out.
None of this is helpful. If someone else is the problem, someone else is in control of the solution. Commerce is a self-centered place. If we’re waiting for someone else to help us make more money, we might never close the wage gap.
So I’d like to discuss three factors that are wholly within each woman’s control. When women focus on correcting what they can correct, each woman’s personal wage gap takes care of itself. And if each individual wage gap closes, eventually we no longer have a wage gap.
Feeling Bad About Money
How a woman feels about money, and her role in earning it, accurately predict how much money she’ll earn.
Does money feel like a big gray cloud, or a dose of bright yellow sunshine? Is money a board room or a birthday party? Is earning an obligation or a celebration? Does making money feel foreign or familiar? Does it taste like shortening or champagne?
This is where I start in my coaching practice, because all of this affects what women earn. When women feel better about making money, they make more money.
Working for Non-Cash Compensation
Another wedge in the wage gap is that many women work for non-cash compensation. They would rather be well-liked than well-paid. Often, they’d rather learn than earn. They give up cash for a flexible work schedule, a shorter commute, or the ability to work from home. “Security” also is a bugaboo for women. I once coached a woman earning $60,000 year, when she could have been making $600,000. She accepted the low compensation because at $60,000 a year, she knew they’d never fire her.
I teach women that they can have all of these side benefits, plus cash. This revelation helps women generate a lot more revenue.
Discounting Your Skills and Expertise
When women discount their skills and expertise, they create a domino effect of under earning. They ask for less. They earn less. They collect credentials instead of cash. They also shy away from the bigger jobs and the bigger paydays.
This domino effect of under-earning halts when a woman stops discounting what she knows and what she can do.
We Don’t Need an Act of Congress to Fix These Problems
Women are 100% in control of fixing each of these under-earning factors. When women stop doing the things that cause them to under earn, they start making money. Each woman has the power to close her own personal wage gap.
Can you share with our readers what your work is doing to help close the gender wage gap?
By day, I’m the CEO of a hedge fund. In my evening and weekend hours, I am a coach for women who want to make more money.
These roles may seem very different, but they’re actually quite similar.
Hedge fund management is about seeing obstacles as opportunities. At my firm, a falling stock market is never a problem, because we short the market and make money from the decline. Our performance is never about the market. It’s always about what we’re thinking about the market.
It’s exactly the same for women. What a woman earns or doesn’t earn is never about the market she’s working in. It’s always about what she’s thinking about that market.
Here’s an example. One of my first jobs was at the Chicago Mercantile Exchange. The escalator coming down from the trading floor was like a Pez dispenser of men. But never did I think that I was in a “male-dominated” industry. My thought was that I was in a “male-populated” industry.
That subtle difference in my thinking made all the difference in my experience. When a woman thinks her environment is “male-dominated,” what happens? She generally hangs back and allows men to dominate. I never did that. Even in meetings filled with men, I was the alpha. My thoughts about my situation were far more important than the situation itself.
Women are exactly like hedge fund managers. They’re much more in control of their earnings than they often realize. I help women see how much control they have over what they earn. As a result, women who work with me routinely double, triple, or quadruple their incomes.
Can you recommend 5 things that need to be done on a broader societal level to close the gender wage gap. Please share a story or example for each.
Let’s fix the wage gap ourselves
Let’s stop waiting for a societal solution. If we wait for society to solve this problem, we will continue to feel angry, powerless, and underpaid.
I’m all for a level playing field. But I also want women to know that they can make more money without one. All it takes is the right mindset, the right message, and some effective strategy.
Every “disadvantage” can become an advantage that puts more cash in your pocket.
Here’s an example from my own life. We think of hedge funds as the ultimate insiders’ game. But I succeeded in that business as an outsider. I was a hayseed from North Idaho who knew no one. My lack of connections played to my advantage because I could tell my clients what no one else was willing to say. This blatant honesty is a big reason I’ve never had a problem finding clients.
No matter what’s happening, I’m going to make money, and I teach the women I coach to function the same way. It’s not that I don’t care about injustice. I definitely do. But I’ve realized that getting angry is far less effective than getting paid.
Don’t Apologize for Making More than a Man
Women must lose the opinion that it’s wrong or unnatural to make more than a man.
Women live longer. We’re more likely to need extensive long-term care. The cost to insure for that care is higher. We spend more time out of the workforce. We still do the lion’s share of childcare and housework. Our personal care is more expensive. Botox, blowouts and Balenciaga blouses come with a high price tag, not just in terms of money but also the time those things require. Many of these things no longer feel optional.
So the fact is that women need to earn more money than men, and we need to do so in less time.
We need this even if we don’t have kids. I was injured while hiking on the Pacific Crest Trail. For three years I was largely unable to sit, stand, or walk. But because I earn a high hourly rate, I was still able to earn a high income even though I was able to work very few hours.
This ability is something every woman needs, and this is what I help women achieve.
Let It Be Easy
Women who under earn work very hard for their money. So they think that making more money will be even more difficult.
The opposite is what’s actually true. I worked much harder as a waitress than I do as a CEO. In my restaurant days, I was often required to work when I was ill. I had little or no control over my schedule. I dealt with people I’d rather not have had to deal with. I had to keep going even when I was exhausted. All of this unpleasantness fell away when I started making more money. Now that I’m a CEO, I experience none of that.
Bottom line: The more money a woman earns, the easier her life becomes. She gets more sleep. She eats better food. Her house is cleaner. Her car is nicer (and more reliable). She has money for her own hobbies. She has room to dream. She works less, and worries less. She has more help. She feels more secure. We need to spread the word on this. Women who under earn are always telling me that it will be too difficult to make more money. This is a lie that keeps women under earning.
Break the Rules
Girls are trained to follow rules far more than boys. Women who want to make more money must let go of this training, because an ineffective rule is a nose ring that leads them away from money.
Here’s a rule I teach women to break. Many “experts” tell women not to ask for more money until their client or employer is flush with cash. If times are tight, the advice is that women should sit tight and wait.
Advice like this causes women to under earn, so I teach women to disregard it. When women decide that someone else’s cash flow problem is not their problem, they start getting paid.
Learn to Receive
Recently, I gave one of our female contractors an unsolicited raise. She told me that she didn’t deserve more money and she listed the reasons. She was slower. She wasn’t as experienced. She was older. She needed more breaks.
None of this was true. She’s one of our best-performing contractors. Reliable. Timely. Efficient. We get great value in that relationship and we wanted to pay her more money to keep her around.
Against her wishes to receive less, I had to insist on paying her more.
This is not a conversation I’ve ever had with a man, but I have it with women all the time. Why? Because women are uncomfortable receiving more money than they think is reasonable. That internal ceiling called reasonableness is the real glass ceiling. It’s the thing we have to bust through to close the wage gap. When we conquer it, all the other ceilings will come crashing down as well.
You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. :-)
My mission is for each woman to realize that what she earns is wholly within her control. We could wait for “society” to provide us with pay parity, or we can roll up our sleeves and grab it for ourselves. The latter is far more empowering and effective. It’s also much more fun. Underearning women think that making money is going to be a tough slog. In reality, making money is a party. I want every woman to know that she’s invited.
Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?
A friend’s wealthy grandfather used to tell us that there are three rules for success in life:
1. Always begin at the beginning.
2. Always conduct yourself as a lady.
3. Buy low, sell high.
I don’t know about the first two rules, but the last one has always served me well.
We are very blessed that some of the biggest names in Business, VC funding, Sports, and Entertainment read this column. Is there a person in the world, or in the US whom you would love to have a private breakfast or lunch with, and why? He or she might see this, especially if we tag them. :-)
Dr. Michael J. Burry is a personal idol. He’s the physician-turned-hedge fund manager depicted in the movie The Big Short. He foresaw the housing crisis, and famously shorted the sub-prime mortgage market.
His investors thought he was reckless and turned against him. But he stuck to his guns and made millions for them. Meeting him would be a dream come true. I love people who think differently. I’m also drawn to people who aren’t afraid to take an unpopular position when it’s the right thing to do.
This was really meaningful! Thank you so much for your time.
Thank you for having me. I love talking about how women can make more money.