HerCapital is here to teach all you ladies how to go about managing money and investing intelligently.
Money is still a taboo subject for women and we are poorer for it. An adage in the financial sector goes that women save and men invest – and this still rings true because the world of finance can sound like it’s full of jargon. Deliberately unclear language is designed to be intimidating, and that intimidation is worse for women, largely because male financial advisors greatly outnumber their female colleagues. The result? A large investment gap whereby fewer women take part in the financial market, and that hurts women’s wealth over time, thereby exacerbating the gender wealth gap.
HerCapital, a nonprofit and community organization, is on a mission to empower women to invest in their future aims to disrupt that narrative. Given their strong backgrounds in finance and technology, co-founders (and sisters-in-law!) Rabiya Ather and Zabreen Khan established the New York-based initiative in the summer of 2019 to start those long-overdue conversations with women about all things money, personal finance and investment.
Speaking to MangoBaaz, Rabiya and Zabreen detailed how they “noticed that there is a major gap in how women think about and make use of their personal finances.”
“Historically,” they stated, “women have not been given the resources and are not encouraged to think about money in the same way that men do. Add to that the gender pay gap, the fact that women’s salaries on average begin to decline earlier than men’s, and that we live longer than men, we have a problem on our hands that we felt needed to be addressed.”
“On average, women invest 40% less than men and of all the assets controlled by women, 71% is in cash, or not invested,” they stated.
“At HerCapital, we’re building an online knowledge base, community, and virtual toolkit for women to learn about personal finance. We hope that through the content we share and the events we plan, we are able to build a community of strong women who rise by lifting each other up.”
Both Rabiya and Zabreen grew up in Lahore and have been involved in social impact ventures for women from a young age.
Rabiya recalled her experiences of attending an all-girls’ school in Lahore and being one of four sisters.
“I think that made me hyper-aware of the patriarchy. When you’re in an all-girls’ school and are one of four siblings who are all girls as well, you don’t necessarily get exposed to some of the things that women in Pakistan (and even in other countries like the US) go through. So, I think I noticed some of the things that were unfair in our society a lot sooner.”
“When I was in high school in Lahore, I worked on a school improvement project in a rural part of Punjab where young girls weren’t staying in school because parents didn’t feel comfortable sending their daughters to a co-educational institution. My family and I set up a school that was only for girls and helped girls in the community to finish middle and high school. The project did really well and we started to get students from villages nearby traveling to come to school.”
Rabiya remains involved with the school, visiting whenever she returns home to Lahore. Her philanthropic efforts don’t stop there, though. Rabiyah also worked on the polio eradication initiative in Pakistan, both on the policy side and in the field. Upon moving to America at the age of 18 to attend Harvard University, the polio cause remained close to her heart and led her to work for the the World Health Organisation (WHO) in an effort to influence health policy, before changing course to the finance sector.
“Whilst I really liked the idea of working in policy and bringing about change in that way, in reality, those organizations are pretty bureaucratic and you don’t end up affecting that much change. I decided to get into the private sector so that I could learn more.”
Since graduating with a degree in Applied Mathematics with Economics and Computer Science in 2015, Rabiya has been working for Goldman Sachs in a role that focuses on developing systematic strategies to help large investors access public markets.
Similarly, after moving to the US for boarding school at 13, Zabreen would spend her winter and summer breaks back in Lahore working on a number of educational projects for women.
“Because I was so far away from home, whenever I would come back, I really wanted to do some kind of volunteering for women’s advocacy and women’s empowerment. One summer I helped a small government-run girls’ school fundraise to rebuild and improve the classrooms and teaching. I’m sure everyone’s aware of how high the drop out rates are for girls in school as they start to get older so that was a project that I was super passionate about.”
Honing in on skills outside of formal education can most definitely enhance self-employment and economic productivity. Zabreen recognized the need for more vocational education opportunities for women in Pakistan and helped to set up a vocational school.
“Our goal was to help women build their own stream of income. The school taught them a skill which was sewing and embroidery so that they could produce their own products, whether it was clothing items or pillowcases etc. The idea was that they could sell these products in their communities and feel empowered by being less dependent on their fathers or husbands.”
All of this wonderful volunteer work in Pakistan led Zabreen to be invited to deliver a TED Talk with the TED Women Conference in 2015.
She spoke eloquently about the misconceptions and stereotypes attached to Pakistan which are often reinforced by the media in the western world.
Zabreen went on to study Science, Technology, and Society and Creative Writing at Stanford University. Graduating in 2017, Zabreen started her career in sales at a position with Facebook and today works at Lead Edge Capital, a growth equity firm in New York.
Suffice to say that the lack of female representation in the finance field is something that Rabiya and Zabreen have experienced first-hand.
Zabreen spoke about how she is “the only female member on the investment team of 18-20 people in [her] company.”
“In our partnership meetings, there’ll be 20 men and then me, so if you walk into that room, you notice that difference instantly. I’m the only person who uses the women’s bathroom!”
Under-representation of women in finance is just part of the problem, though. The domino effect that this has on women generally feeling uncomfortable talking about their finances can be observed in all industries.
Zabreen states, “I began to realize that we were getting more and more questions from our own female peers about managing their own money because they thought, well, you guys are in finance so maybe you have the right answers. There’s a real lack of education and resources and women just aren’t talking about these issues enough.”
“Whilst it’s important to have strategies in place to get more women into roles within finance, the other side that isn’t being discussed is that women in any industry should know how to manage their money, how to budget, how to invest, etc. We felt like this problem in itself wasn’t getting enough attention and being in the finance world allowed us to be more exposed to it”
Rabiya also explored how in her role on the public market side, “[her] day job is to recommend investments to people and that’s something you’re taught how to do.”
“We noticed that a lot of our male colleagues would have conversations where they would take those skills and apply them to their personal lives. Even though we have the same skills and felt comfortable doing our jobs professionally, for some reason, we felt uncomfortable doing the same thing personally.”
“This made us think about women who aren’t part of the finance world; they probably don’t realize what they’re missing out on.”
Sharing an anecdote that really bought this home, Rabiya recalls, “A friend of mine invested a lot of money in Facebook and made so much money that he was able to buy a house just off of those gains. He wasn’t that much senior to me. That made me think, wow, we are really missing out here.”
“It’s pretty scary how much you can lose out from just a couple of years of not investing!”
These experiences ultimately acted as a catalyst for this pioneering duo to form HerCapital- a safe space where women can feel comfortable asking questions in order to learn how to better manage their money and make investments to secure their financial futures.
View this post on Instagram
This rings true in many parts of life, including investing. For so long, money has been a taboo topic for women and that needs to change 🙋🏽♀️⚡️💸 We should be comfortable speaking to our girlfriends about our salaries, negotiation techniques, investment portfolios, and so much more. If you’re just starting to learn more about money management, don’t hold back. It’s important to ask questions!💡You’ll be surprised to know that many women (and men) have the same questions as you. For anyone new to the world of investing and finance, know that the barriers to entry are often linguistic which make the topic look harder than it is. Use the #HerCapital platform to get the information you need in bite sized pieces and ask the questions you want answers to. We’re here to help and build a community of strong women who don’t hold back. 💪🏽✨👏🏽 (📸 via @artsyaffirmations)
For women, to talk of money, in any personal way, is deemed impermissible a lot of the time – actually, dirty. Having too much or too little – both of these states are used to disqualify women from talking openly. Rabiya and Zabreen have had to think about navigating the barriers in front of these conversations in order to allow us to feel comfortable with the idea that finances are our domain.
“Our plans over the next few months include more virtual events, live Instagram Q&As, and webinars to encourage the dialogue. As women start to see other likeminded women in a variety of fields, we hope that they will feel more comfortable asking questions – that’s a really big drive for us right now,” Zabreen explained.
“We’re always encouraging women to DM us directly and we send them tailored advice based on where they are in their lives.”
HerCapital also aims to close the financial literacy gap and ensure that women have access to a robust and meaningful financial education through their community.
Zabreen acknowledges, “Women tend to feel as if these topics are complicated. Another goal of HerCapital, whether it’s through aesthetics or making our content more digestible, is really to make the process less intimidating by demystifying what these big words mean.”
View this post on Instagram
A quick rule often used to roughly determine how much of your investment portfolio to keep in stocks is the 100 rule: subtract your age from 100 and that’s the percentage of your portfolio you should keep in stocks. As life expectancy is increasing globally, some experts suggest changing the 100 rule to 110 or 120. This would mean you allocate a larger percentage of your portfolio to stock-based investments to allow greater earnings for a more comfortable retirement (and also greater exposure in the short-term). The idea is that if you don’t need the money in the near future, you should put it in stocks. As we’ve mentioned in past posts, stocks are a riskier investment category, but they return more over a longer time frame. This is a simple rule, but one that provides a rough guideline. Of course, there is never a one-size-fits-all approach, so feel free to reach out with any questions! #HerCapital 💸🌟💪🏽
Building on this, Rabiya aptly stated the psychological aspects which lead to the fear of the financial world to permeate amongst women.
“A lot of people have written about the idea that women feel the need to be at 110% before they act or speak up about things, whereas men feel a lot more comfortable at a much lower knowledge level. It’s interesting because that can be the rationale behind why a lot of things are the way they are in the world.”
“A lot of our programming over the coming months is focused on distilling the information and making it easy to absorb so that women feel more confident. It’s also important to note that a lot of the financial knowledge that is already out there has been written by men. We’re really passionate about providing a knowledge base where women feel like the content is targeted at them.”
View this post on Instagram
There is no need to wait for the “right time” to invest. The earlier the better! A common misconception women have is that you need to be an expert to know how to invest. The truth is, you can start investing even with pocket change. If you’re new to the investing landscape we recommend a user friendly platform like the @robinhoodapp which makes the process easy and intuitive. ⠀⠀⠀⠀⠀⠀⠀⠀⠀ Make sure to follow along over the next few weeks as we share investment tips and advice. And stay tuned for more details on our first event in NYC… coming this summer! #HerCapital 💃🏻💥💪🏽
Rabiya and Zabreen intend to have a global reach and have been particularly enthused by the interest of women in Pakistan.
“We’re getting a ton of traction from women in Pakistan. A lot of the DMs we get are from young women who are working on their own businesses or just graduating from college and are curious about this. That’s something we’re super happy to see because most people think that this is a topic that’s talked about more in the west but actually, women in Pakistan are eager and want to learn. This has been awesome because, of course, that’s where we were born and raised,” Zabreen expressed.
Rabiya also interestingly identified the differences in the types of questions they receive from their Pakistani and US audience.
“The topics that Pakistani women are interested in are quite different from the average American female or male investor. We often get questions about currencies and real estate from Pakistani women because perhaps they want to invest in gold or plots, as opposed to the US where equities are a much bigger thing. This has given us the ability to target topics that would maybe be less relevant to a US-only focused audience.”
So, ready to learn about how to better manage your personal finances? Rabiya and Zabreen kindly outlined their ‘Top Five Personal Finance Tips’ for all of us women to help kickstart our journey:
1. Start Now:
There is no need to wait for the “right time” to invest. A common misconception women have is that you need to be an expert to know how to invest. The truth is, you can start investing even with pocket change.
2. Use the 5/20/30 rule to manage your finances.
50% of your income should go to essentials like rent, groceries, and transportation; 20% should go to savings, debt repayment, and most important, investing; 30% should be reserved for discretionary spending, whether that’s a weekend trip or a clothing item on your wishlist. This rule isn’t one size fits all and should be modified based on income level, but it is a good place to start.
3. Track your spending.
There are tons of apps out there that will help you be mindful of how much you’re spending and will allow you to better reach your financial goals. Some of our favorites include is Mint, Clarity Money, and YNAB (You Need a Budget).
4. Determine what you would like to achieve with your investing.
It may sound basic, but you need to be purposeful with your investing goals. A general rule to keep in mind is as follows. If you are looking to invest money for a short period of time (typically less than 5 years) you are better served by remaining in less-risky instruments like a savings account, bonds, or treasuries. If you are investing over a longer period of time and are willing to keep your money invested, you may be able to take on more risk by investing in stocks. Whatever you choose, make sure to diversify your portfolio.
5. Buy what you know.
It is easy to get carried away and invest in businesses we don’t understand, particularly when there is a hype around a specific brand or industry. Focus on sectors and companies you understand, particularly at the onset of your investing journey. For example, if you are passionate about fashion brands or know real estate particularly well, start there!
Women like Rabiya and Zabreen remind us of the importance of educating ourselves.
We simply cannot passively wait for change to occur before taking the initiative to understand a world which we may feel far removed from. Self-care doesn’t just have to be about face masks, manicures, and bath bombs. Self-care is also making money, discussing money, being organized, budgeting, filing taxes, and learning about the right things to invest in.
Ladies, we at MangoBaaz implore you all to follow HerCapital’s Instagram page and check out their website for regular updates on their upcoming virtual events. Make sure you keep us posted on what you think in the comments below!