How to retire at 40 – according to JPMorgan’s asset and wealth management leader

 ·31 Jul 2021

“Invest every single dime you have, early and as often as you can.” That’s the advice from Mary Callahan Erdoes, the chief executive officer of JP Morgan Chase’s Asset and Wealth Management division on how to retire early.

Erdoes was speaking during an episode of Bloomberg Wealth with David Rubenstein.

“There’s a question, would I rather have a dollar double every day, or get a million dollars? A dollar doubling every day over a month would give you more than a million dollars. So investing and compounding, that’s the answer to every question,” she said.

Erdoes said that guarding against the unknown highlights the importance of diversification. This brings into play assets like cryptocurrency.

“When you have things like Dogecoin, which was created as a joke but now has $30 to $40 billion in value – you have to ask yourself, is it liquidity in the system that’s causing this, or are there real, new things happening,” she said.

“Only time will tell the answer to all these questions – but it all goes back to one of the most important things – diversification. There’s just no way to know what is going to happen in the future to every single asset class, so the most important answer is proper diversification.”

Speaking about whether she would help clients diversify into crypto assets, Erdoes said that blockchain technology – which underpins cryptocurrencies – is very real, “and is changing all of the ways that we digitally interact with the different financial markets”.

However, the digital currencies themselves are new, “and in general, digital currencies are being debated as to whether they are an asset class, or not.”

She said that JP Morgan does not have Bitcoin as an asset class per se, and time will tell whether it has the store value. “But the volatility that you see in it today just has to play itself out over time.”

On the best investment advice she has received,  Erdoes, said: “If it sounds too good to be true, it probably is.”

And answering a series of quickfire questions from David Rubenstein, Erdoes said: “You should never invest in something that can’t be simplistically explained to you.”

On the question of where she would tell clients to invest $100,000 right now, she said: “In a balanced portfolio, well-diversified, that they can store away for a long period of time, and hopefully it compounds healthily for them.”

“The most important thing is to be able to save early,” the investment expert said.

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