This Viral Finance Pro Says This Simple Math Problem Can Help You Maximize Your Investments at Any Age
Vivian Tu, whose online persona is YourRichBFF, is somewhat of a financial genius and the Chief of Financial Empowerment at SoFi at the young age of 32. Her simple math problem can have you maximizing your investment portfolio at any age to grow and protect your funds.
Tu has been doling out financial advice online to her 3.8 million followers since 2021, offering insight on investments, mortgages, inheritance, and more to help Americans make their money work for them. Her popular online videos complement the advice on her website with little digestible nuggets of financial information anyone can understand.
A Healthy Balance
In a recent video, Tu recommends reassessing your investment portfolio every 5 years to align with where you are in your financial journey. Her latest easy math problem gives you a quick layout for the balance you should strike between growth investments (equities) and protection investments (bonds).
Equities are riskier but meant to help grow your nest egg, while bonds don’t yield as much of a return but protect the money you’ve already made. Her math problem states that your age should determine the percentage of your portfolio to allocate to protection investments.
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One Easy Math Problem
According to Tu, you should take your age, subtract ten, and round up or down to the nearest number divisible by five. So if you’re 67, it should look like this:
67 – 10 = 57
The closest number divisible by 5 to 57 is 55
Therefore 55% of your portfolio should be in protection investments
Tu notes that the younger you are, the larger percentage of your portfolio should be in growth funds because you have more time to recover in case of a market crash. Retirees or anyone close to retirement would benefit more from bonds and fixed income products to protect the money they’ve already made.
She Knows Money
Tu became a millionaire at 27 after working as a trader at J.P. Morgan and making smart financial moves. She’s a podcaster and author. Her podcast, Networth and Chill, which has done live tapings at South by Southwest (SXSW), discusses common financial topics with guests. Her book, Well Endowed, is geared toward building generational wealth.
If you haven’t reevaluated your portfolio in the past five years, now is the perfect time. With Tu’s simple math problem, you can adjust your investments so your money is working the hardest to set you up for long-term comfort.
