Eric Schmidt, executive chairman of Google’s parent company Alphabet, is worth an estimated $11 billion.
While a significant amount his wealth comes from stock he received as Google’s CEO, the billionaire credits a few personal finance strategies with helping build his net worth.
Here are the three tips Schmidt says any professional can use to make and save more money:
1. Take full advantage of your 401(k)
“If your company offers matching 401(k), take it — all of it,” the exec tells CNBC.
“Maximize what you put into anything that’s matched,” he says. “That’s a 50 or 100 percent return depending on your company’s policy, instantly.”
This isn’t the only piece of advice Schmidt has for professionals. In a recently-updated edition of “How Google Works,” he says workers should have an elevator pitch memorized. It’s not only useful for getting a new job, but can help you advance in your current role.
In the book, Schmidt also encourages professionals to read constantly read about their industry.
2. Don’t try to beat the market
While it may be tempting to buy or sell stocks based on daily movements, short-term trading isn’t going to make you rich, Schmidt says.
“Don’t try to beat the market,” he says. “Don’t try to pick stocks.”
Instead, think long-term.
“Invest in index funds, Vanguard funds,” he says, emphasizing different types of mutual funds tied to broad sectors of the stock market.
This long-term strategy is the same one billionaire Warren Buffett , CEO of Berkshire Hathaway, swears by.
3. Think twice about hiring a money manager
“Two words: ‘Minimize fees,'” Schmidt says. “Do not pay someone a lot of money to manage your money for you.”
Schmidt says that paying someone to manager your money ends up costing you more over time.
“Understand how much it costs you to pay someone one percent a year to manage your money,” he says.
Instead, he says, take that money you save on fees and invest it yourself.