This is how the ultra wealthy really invest, says this former Wall Street trader

Tu, who is publishing her first book in December, decided to start posting financial advice on social media after she found she was hearing the same financial questions — like how to invest your money or how to make sure their 401(k) investments were balanced. MarketWatch Picks sat down with Tu to discuss her best advice for saving your money (psst: open a high-yield savings account, as many are paying upwards of 4%, as you can see here) and building long-term wealth by investing like the wealthy do. 

Open a high-yield savings and checking account.

Opening a high-yield savings and checking account is a great way to get your money to work for you, Tu told MarketWatch Picks.  “Money you’re setting aside for your cell phone bill can now make you money while you’re just chilling,” she says. “That money that is just sitting aside waiting for a rainy day can continue to grow with you as you’re earning APY.” 

Indeed, some high-yield savings accounts are paying upwards of 5% APY for opening a savings account right now, sometimes with just a $1 deposit. (See some of the best savings account rates you can get here.)

These accounts can be a great way to create an emergency fund, Tu says. It will allow you to build up your balance over time in a way that a traditional savings account won’t. “With every single life stage, your emergency fund needs to keep getting bigger,” she says. “With a high yield savings account you have a smaller delta to make up for.” 

Invest like the rich.

While working on Wall Street, Tu observed certain patterns in how wealthy clients invested their money. A common misconception is that rich people pick stocks themselves, when in fact, wealthy investors are often putting their cash in index funds, ETFs, and mutual funds, Tu told MarketWatch Picks. 

“When you’re ultra wealthy you do have access to some unique investment opportunities, but the vast majority of ultra wealthy people’s portfolios consist of index funds, ETFs, and mutual funds, and maybe some sector funds,” she says. “Really smart rich people aren’t sitting there for 12 hours a day doing investment research to pick the perfect investment.”

Tu says she follows this investment advice herself, and invests her money in index funds and ETFs. If you want to try investing but aren’t sure where to start, she has another solution. “If you feel overwhelmed by investing, just get a robo adviser,” she says. “You take a quick quiz, then they spit out an investment portfolio that is tailored to your needs.” 

Don’t be loyal to your job.

A common mistake that most people make when it comes to building wealth is staying at their job too long, Tu says. If you’re not getting a 10-15% raise every two years, it’s time to look for something else, she says. 

A significant raise will allow you to put more money aside and save for retirement. Staying at your job for a long period of time no longer pays off financially. 

“I want to remind people that now that we are the ones funding our own retirements and we need to have more money to fund those retirements,” she says. “You have to have an up or out method. Every two years you have to get a meaningful raise or promotion, or find a job that will give you that raise.”