Having a deep understanding of the challenges faced by her friends who are women and people of color, Tu recognized the need for easily understandable financial guidance. She started posting financial advice on social media, responding to recurring questions about investing and managing 401(k) investments. Picks had the opportunity to sit down with Tu and discuss her top advice for saving money and building long-term wealth.
According to Tu, opening a high-yield savings and checking account is an excellent way to make your money work for you. By setting aside money for expenses like your cell phone bill, you can now earn passive income while you go about your daily life. Tu explains, “That money you’ve put aside for a rainy day can continue to grow with you as you earn APY.”
In fact, some high-yield savings accounts currently offer upwards of 5% APY for opening an account with just a $1 deposit. (Check out the best savings account rates here.)
For Tu, these accounts also serve as ideal emergency funds. Unlike traditional savings accounts, they allow you to gradually build up your balance over time. “At every life stage, your emergency fund needs to keep growing,” she advises. “With a high-yield savings account, the gap you need to fill is smaller.”
Vivian Tu’s dedication to empowering overlooked communities through accessible financial advice is commendable. Her upcoming book, set to release in December, will undoubtedly equip even more individuals with the knowledge and tools to build their wealth wisely.
Invest like the wealthy
Working on Wall Street, Tu noticed a pattern in how wealthy clients invested their money. Contrary to popular belief, rich individuals don’t spend hours conducting investment research to choose individual stocks. Instead, they often opt for index funds, ETFs, and mutual funds. According to Tu, this is the primary composition of the portfolios of most ultra-wealthy individuals.
Tu practices what she preaches and invests her own money in index funds and ETFs. For those interested in investing but feeling overwhelmed, she suggests using a robo-adviser. By taking a quick quiz, these platforms generate personalized investment portfolios that cater to your specific needs.
Don’t get too comfortable at your job
According to Tu, one common mistake people make when trying to build wealth is staying in the same job for too long. If you’re not receiving a 10-15% raise every two years, it might be time to consider other options. A significant increase in salary allows for larger savings and better retirement planning.
Tu wants to remind people that it’s now our responsibility to fund our own retirements. To achieve this, we need to focus on increasing our income. Sticking to one job for an extended period no longer yields financial benefits.
Tu recommends adopting an “up or out” mindset. Every two years, seek opportunities for meaningful raises, promotions, or find a new job that offers better financial prospects.
