A top personal finance influencer wants young adults to stop making these money mistakes

Your Rich BFF founder Vivian Tu has quickly emerged as one of the most prominent personal finance influencers, with millions of followers on Instagram, TikTok and other social media platforms. A former Wall Street trader, the 30-year-old changed gears after realizing that many of her co-workers in the corporate world needed help with even basic financial tasks.

Through Your rich best friend, she now offers financial advice to millennials and Gen Z in the places they like to get information – on social media, while also publishing a book, “Rich AF,” hosting a podcast and appearing on television. In an interview with CBS MoneyWatch, she dispels common myths about money and describes some financial mistakes young adults often make. This interview has been edited for length and clarity.

CBS MoneyWatch: How did you get into this line of work and what made you think it could become a full-fledged career?

Viviane You: I was surprised to see that people older than me or more advanced in their careers didn’t know the answers to questions like, “Can you help me rebalance my 401k, choose a health insurance plan, and understand if my stock options company are worth anything?” ?” I was asked the same questions over and over again, so I created content to answer them so people would stop asking me!

It turns out that a lot more people than just my coworkers needed information. We don’t understand this in school and it’s the one thing we all desperately need. We would all be better off if this was part of our education.

So where can people learn to be smart about money?

Just like you hold a pencil or learn to drive – you are taught by your parents and guardians. For some people who come from wealthy generations or have parents who understand money, they are getting that education.

However, the vast majority of us do not come from that type of background. Our parents are imperfect and they are also imperfect with their money. So we get the same financial problems that our parents had. Then you turn to the internet to try to find the information yourself.

What’s wrong with finding information online?

There are a lot of myths out there, especially on social media. A big myth is that investing is very exciting. It is not. It’s watching the grass grow or watching the paint dry. If you’re feeling like you’re on a roller coaster, your heart rate is increasing, you’re excited, you’re nervous, you’re probably doing something wrong.

Investing is a great way for anyone to have a dual-income family. You are working hard for money and your money can work hard for you. You can only work a few hours before your body and brain give out, but your money can work 24/7 without lunch breaks. Early in your career, the hope is that you are setting aside money and this will help you when you don’t want to work as much or can’t.

Right. And at a recent Wall Street Journal event you noted that the algorithms that power social media can amplify misguided and even financially reckless content, such as “get rich quick” schemes. How to make simple investing principles appealing to the TikTok generation?

In terms of making people actually care, I think this shows what money is really like when it’s in use. Instead of saying that if you save now, you will retire as a multimillionaire at age 65, say, “At 65, you can wake up every morning, drink lemonade, go to the golf course, live in Naples, Florida – you You can live every day without being indebted to the need to make more money.” This is more compelling than just the statistics.

Meeting people where they are, explaining why money is important to them, moves the needle. For example, when I talked about how having a good credit score helped me win travel rewards that I used to fly to Italy in a lie-flat seat, everyone wanted to know how to improve their credit score. Showing that responsible decision-making pays off is when people will really pay attention.

What are some other financial myths that you think need to be debunked?

Number 1 is thinking that you need to be completely debt free. Yes, eliminate as many high-interest debts as possible, but when you have low-interest rate debts, you don’t need to rush to pay them off. You can start investing while paying off debt. Not all debt is bad.

Number 2 is: don’t buy things you don’t need with money you don’t need to impress people you don’t even like. When making a purchase, ask yourself, “Do I want to have this, or do I want people to know I have this?”

Third, investing is not just for rich people. This is how rich people get rich. The best outcomes for average investors are to buy and hold exchange-traded funds and mutual funds that track broader indexes. It’s about having a portfolio that’s well-diversified and suited to your age and risk tolerance.

It’s not what people want to hear: they want to get rich tomorrow. If your horizon is 24 hours, few investments will pay what you need.

A hallmark of personal financial advice is that the choices we make as individuals determine our financial future. But this view fails to take into account the systemic forces that shape our financial lives, such as income inequality and recurring economic crises. More recently, for example, we have seen how the advent of artificial intelligence can suddenly transform some jobs. What’s your opinion?

We have to come to the realization that our generation cannot save our way to wealth – we cannot have the white picket fence “happily ever after” house that our parents had through savings. It used to be that you could work a middle-class job, earn a middle-class salary, buy a house, and go on vacation twice a year. It’s harder now. But you have to be able to do the best with the hand you are dealt. Control what you can control and if something happens, know how to pivot.

For example, if you just graduated with a degree in programming and are worried about AI taking over these jobs, learn how to work with AI and see how you can maintain job security. There will always have to be someone to make the AI ​​smarter, design the system, and be the engine behind it. It’s not like it just exists. We need to learn to use it to our advantage instead of competing. It should be a collaboration. Why not take advantage of it and take on 25% of the work you hate so that you are free to do other things?