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Key Takeaways Former Goldman Sachs CEO Lloyd Blankfein says that his first move with $5,000 would be buying life insurance, calling it a form of savings that protects a young family.
After that, he would have some fun by buying a 14-year-old used car.
Once those necessities are covered, he recommends putting money into stocks.
Former Goldman Sachs CEO Lloyd Blankfein advised young workers with extra cash saved up to spend it on something practical — and something fun.
Blankfein spoke on a recent episode of the Financial Tea with Mrs. Dow Jones podcast, responding to a question about his advice for a 25-year-old with $5,000 in savings. His first instinct is to treat $5,000 as a foundation against worst-case scenarios.
“Well, the first thing I did was I bought an insurance policy,” he said. “The first purchase I made.” He says he bought life insurance as a “form of savings” since he built value with the insurer that he could tap if he ever really needed it. He added that if you have a young family, you “owe it to them” to think ahead and make sure they are protected.
Lloyd Blankfein. Photographer: Jose Sarmento Matos/Bloomberg
After that practical investment, Blankfein suggested buying a car for fun. “Obviously, you want to have some fun in your life, so you could buy that 14-year-old used car, I’ll give you that,” he told the podcast.
Blankfein’s investing tips
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