Here’s How Self-Made Millionaire Vivian Tu Created Wealth

Building wealth and saving for retirement may be more difficult for women facing challenges such as lower wages, despite their increasing levels of education.

An early-career mentor sparked a mindset shift in Vivian Tu, the founder of Your Rich BFF, who became a self-made millionaire at 27.

“I learned early on how to budget and save,” Tu said, speaking at CNBC’s Women & Wealth event on Tuesday. However, before this mindset shift, she focused on “skimping and saving rather than creating more wealth” through investing.

While Tu was working on Wall Street, a mentor helped her develop “healthy financial habits” that paid off once she earned a higher salary in the tech industry.

“I was always living below my means and then investing that larger proportional difference,” she said. “As the years went by, I continued to ask for more and more money each year.”

These increases helped Tu invest and grow his wealth faster.

Tu’s change in mindset is an example that other women can learn from. Lifelong saving and investing are both essential for women, according to Boston-based certified financial planner Catherine Valega, founder of Green Bee Advisory.

“We are so short of time in the market,” she said, noting that women are more likely than men to leave the workforce to care for children or family members.

Indeed, about 14% of women aged 25 to 54 were full-time caregivers in 2022, compared to 1.5% of men, according to the Federal Reserve Bank of Minneapolis.

Leaving the workforce reduces income and the chances of saving and investing for retirement, Valega said. “This caregiver penalty is a double whammy,” she said.

That’s why she urges women to increase their 401(k) savings — aiming to maximize their contributions each year, if possible — and consider higher stock fund allocations, based on their risk tolerance.