While meeting their everyday financial obligations, many American workers also make 401(k) contributions to build funds for income during retirement.
Scott Galloway, New York University professor and bestselling author, offers recommendations for saving and investing in one’s retirement future, including advice on 401(k)s.
More importantly, Galloway shares additional essential advice to people looking beyond their employer-sponsored plan for opportunites to invest in their financial outlook.
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Regarding 401(k) plans, Galloway suggests a simple approach.
“Use them,” he wrote in his book, The Algebra of Wealth. “They combine forced savings with tax minimization and the power of compounding; they can be the bedrock of your economic security.”
Galloway emphasizes that when utilizing a 401(k) plan, the first and most important step is to take full advantage of any employer match available. He notes that there’s no better investment than an instant, tax-deferred 100% return.
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Under nearly all conditions, individuals should prioritize contributing enough to receive the maximum employer match, ensuring they make the most of this opportunity — and in some cases, more.
“Contributions beyond the match level are likely a good idea but should be determined by your tax situation and liquidity requirements,” Galloway wrote. “There is no single recipe for how to make use of these plans, and no plan is ‘better’ than any other in all circumstances.”
A man in retirement is seen teeing off toward the sun on a golf course. New York University professor and popular podcaster Scott Galloway recommends index funds for people investing beyond their 401(k) plans. He also has his eye on some Chinese companies that may be poised to experience future success.
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Scott Galloway recommends index funds for those investing beyond 401(k)s
Galloway recently shared his perspective on investing during a conversation on the Pivot podcast, which he co-hosts with journalist Kara Swisher.
He cautioned against the assumption that an individual can consistently outsmart the market and emphasized his preference for low-cost index funds as an effective strategy. His core message was the importance of maintaining broad diversification.
Rather than searching for standout investments, Galloway advised taking a comprehensive approach — investing in the entire market rather than trying to pinpoint exceptional stocks.
“You don’t need to find the needle in the haystack,” he said. “You want to buy the whole haystack.”
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He suggested allocating around half of one’s portfolio to an S&P 500 index fund or, for those looking for increased exposure to tech, the QQQ fund.
Galloway described a general investment breakdown that could work for many individuals: Fifty percent allocated to an S&P-related low-cost index fund, ideally through providers such as Schwab or Vanguard. Additionally, he recommended dedicating 30% of one’s portfolio to an international index fund or a credit and debt-focused fund.
To ensure liquidity, Galloway suggested keeping a portion of funds in Treasurys. This approach provides financial flexibility in case of unexpected challenges, such as job loss or short-term cash shortages.
Related: Dave Ramsey sends strong message to Americans on 401(k)s
Scott Galloway eyes stocks outside of 401(k)s, index funds
Given Galloway’s recommendations that emphasize diversified investments, 401(k)s, index funds and Treasurys, it’s important to note that he keeps an eye on specific company stocks as well.
He explained on No Mercy / No Malice May 2 that he believes China is in a better position than the U.S. to come out ahead through a trade war.
“I also believe that, over the long run, tariffs will always trend toward zero as consumers opt for cheaper goods over … everything,” he wrote.
Related: Scott Galloway’s net worth: The Prof G host’s wealth & income in 2025
Galloway lists two China stocks he is tracking.
Alibaba (BABA) — “The stock is up 50% YoY. I believe Alibaba is well-positioned to continue to take advantage of the U.S.-China AI race,” Galloway wrote. “Alibaba’s challenge is expanding its consumer business units domestically and accelerating cloud growth (up 13% YoY this quarter).”
BYD Company (BYDDY) — “Starting at $8,000, the BYD Seagull has a range comparable to those of other EVs and comes standard with autonomous driving technology, and in the coming years it will receive a battery upgrade with 5-minute charging capabilities,” Galloway explained. “My Pivot co-host, Kara Swisher, really wants one, but they aren’t available in the U.S. — a fact that hasn’t slowed BYD’s growth. Its first-quarter revenue jumped 36% YoY, to $23.5 billion, while its net profit doubled, to $1.26 billion.”
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