Former Goldman Sachs CEO Lloyd Blankfein has a clear and practical framework for young workers wondering what to do with their first $5,000 in savings. Speaking on the Financial Tea with Mrs. Dow Jones podcast, Blankfein offered straightforward guidance for a 25-year-old navigating early financial decisions — and his answer starts not with stocks, but with protection.
Blankfein’s first recommendation is buying life insurance. He views it as a form of savings, since policyholders build value with the insurer that can be accessed in times of need. For those with a young family, he believes it is simply an obligation. “You owe it to them,” he said, emphasizing the importance of planning for worst-case scenarios before chasing returns.
Room for a Little Fun
Once protection is in place, Blankfein does leave room for enjoyment. He suggested buying a 14-year-old used car, acknowledging that young people deserve to enjoy their money while still being financially responsible. It is a rare blend of pragmatism and permission.
Building Wealth Through Smart Investing
Only after these two steps does Blankfein turn to investing. He advises young savers to put money into stocks rather than bonds, since equities tend to grow faster over time. He also stresses avoiding high-fee funds, recommending low-cost investment options to preserve more gains.
Blankfein, who led Goldman Sachs from 2006 to 2018 through the height of the financial crisis, keeps his own extra cash in Goldman’s Marcus high-yield savings account — a no-frills, online-only option with minimal overhead costs.