Lloyd Blankfein, the former Goldman Sachs CEO, says young workers with spare cash might want to buy something sensible — and something fun.
Blankfein was asked during the latest episode of the “Financial Tea with Mrs. Dow Jones” podcast for his advice to a 25-year-old with $5,000 in savings.
“Well, the first thing I did was I bought an insurance policy,” he replied, noting that many of his coworkers used their first cash piles to buy cars instead.
Blankfein said life insurance is a “form of savings” because you build up value in the insurance company that you can “tap if you need it.”
He added that if you have a young family, you “owe it to them to think about them and protect them.”
After that prudent purchase, Blankfein said that “obviously you want to have some fun in your life, so you could buy that 14-year-old used car.”
He also recommended young savers buy stocks and other riskier assets as they’re “likely to grow faster” than safer options like bonds. He also advised them to avoid “high fees” by investing in “low-cost ETFs.”
Blankfein, who left the top job at the storied investment bank in late 2018, recently published a memoir titled “Streetwise: Getting To and Through Goldman Sachs.”
He said on the podcast that he keeps his spare cash in Goldman’s Marcus savings account because of its low overheads. Marcus “doesn’t have branch offices and doesn’t have to pay for a lot of people, no pens to give out. No TVs or toasters,” he said.
Blankfein also touched on his love of trading, saying he’s “known the price of everything all the time for just about 40-something years.”
“When they bury me, they’d better put in a market screen and extra batteries,” he quipped.
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