- Millionaire financial literacy coach Vivian Tu teaches her TikTok followers about crypto and NFTs.
- She says crypto will be a huge part of our future, but you shouldn’t be “YOLO-ing your savings” on it.
- Tu advises people to focus on “guaranteed wins” like a company 401(k) match, if you have one.
- Read more stories from Personal Finance Insider.
When asked why so many millennial and Gen Z investors are flocking to cryptocurrency, 27-year-old millionaire and ex-Wall Streeter Vivian Tu says, “No one wants to get rich slow anymore. So many people get rich overnight, which is a fault of our generation.”
Cryptocurrencies are digital assets that are created and run on blockchain, a digital ledger that prevents people from changing or hacking past money exchanges. The most popular cryptocurrency is Bitcoin, which dipped to $3,300 per coin in March 2021, and is worth $43,800 at the time of this writing. Cryptocurrency is fairly new, and doesn’t have the same protections as fiat currencies, like the US dollar.
At this point, most millennials and Gen Zers have heard urban legends of people making massive gains by investing in Bitcoin early, or hopping on the newest memecoin trend. Tu says she’s even heard stories of people “paying off all their medical bills, student debt, or buying their mom a house” from overnight crypto success stories.
Tu says, “No hate for anyone who chose to do that, but for every story for making a bunch of money on crypto, there’s a story of someone who’s lost money on crypto, too, and I just hope the people who lost money could afford to lose it.”
Crypto isn’t the only way to get rich
Tu says one of the reasons young people feel such an urgency to invest in crypto is because they feel it’s “the only way they’re going to retire, or the only way they’re going to get rich.”
Because millennials and Gen Zers are the generations that witnessed the effects of the 2008 recession , a global pandemic, and the Black Lives Matter uprising, they have lost faith in old systems of making money, and now feel like investing in crypto is their only way out.
“These are still uncharted waters,” Tu says. “In the same way that banks had to go through decades and decades of iterations to be safe, there are still security loopholes in crypto that haven’t been discovered yet.”
Crypto can be part of your portfolio — but not all of it
“Cryptocurrency is likely going to be an important part of our future,” Tu says, “and I think everyone should invest in cryptocurrency. But it shouldn’t be more than 1% to 3% of your portfolio, and it shouldn’t be any more money than what you can afford to lose. I don’t think people should be YOLO-ing their entire savings into crypto and not investing in the stock market.”
She continues, “Keeping crypto as a modest portions of your investments helps you partake in the potential upside in things such as the metaverse, but there are certain things that are guaranteed wins, such as your company’s 401(k) match.”
A 401(k) is an employer-sponsored retirement account where you can contribute pre-tax earnings that accrue compounding interest. Your employer may offer to match your contribution up to a certain percentage.
Let’s say, for example, that you contribute 5% of your monthly income, which comes out to $500, into your 401(k). If your employer matches up to 10% of your monthly contribution, it will give you an extra $500 in your 401(k) to match your 5% contribution. However, if you’re not using the maximum amount your employer will match, you’re leaving an extra $500 on the table per month that can go toward your retirement savings.
Before putting your money into crypto, Tu advises, take advantage of the wins already available.
Leo Aquino (they/he) is a Spending & Saving Reporter. Before joining the Insider team, they covered relationships, sexual wellness, beauty, fashion and more, always uplifting stories of BIPOC and LGBTQ+ communities. You can reach Leo at email@example.com. Learn more about how Personal Finance Insider chooses, rates, and covers financial products and services » Sign up to get Personal Finance Insider’s free email newsletter in your inbox »