I recently took an Uber to my business networking meeting in downtown Austin a few weeks ago, My conversation with my Uber driver led us to a financial discussion and further went into his personal strategy at building wealth. We were trying to convince each other that our two different strategies were justified. At the end of my discussion with my Uber driver, it came down to him sitting on $16,000 in cash that he is sitting on in his personal savings account.
I was excited for him and tried to tell him that his decision for leaving that money in a personal savings account wasn't going to build him a significant life-saving account for his future. He proceeded to tell me as we were closing our discussion as my destination approached.
This conversation with him reminded me about 2 other couples that came by my office during the last 2 years had a similar situation on their hands too, but unlike the Uber driver, the two couples realized that just sitting on some pile of money wasn’t going to get them wealthy. I read an article recently from NeardWallet that the average American today is holding more than $32,000 in cash. They were able to come to that conclusion by looking at traditional savings accounts. These accounts, if you are lucky are only earning at most 1% interest on the average American citizen's personal savings account. To give you an idea on what the average American is missing out on let's just say a 30-year investment that is earning a conservative 6% could be making $140,000 over that 30 year period.
The article goes on to mention that 4 out of 10 Americans don’t invest their money at all! Almost more than half have admitted that they don’t know how to invest or think investing is way too risky. 16% of Americans said they don’t trust financial institutions, a surprising 8% of people said keeping their cash is the best way to make sure they hold and build wealth.
A good suggestion I would like to recommend following this article is instead of sitting on a stockpile of cash a good strategy would be to only sit on 3-6 months worth of an income and the rest of your stockpile should go into an investment type of product. Just remember the 30-year investment opportunity I mentioned above, If the average American invests their stockpile in a high-yield account, or in an investment product their wealth building strategy could be realized by a difference in the millions.
Between the average person who is investing men seem to be active more than women, The article goes on to mention that 24% of Americans are still not investing or actively doing their part to build strong wealth.
If at least a minimum take advantage of your employers 401(k) sometimes they are not the best programs put together, but at least you are doing something that is automatically being taken care of for you by your employer since they take out from your checks monthly and sometimes they offer matches. Take advantage of that!
If you live in the greater Austin area and would like to know how much you should be saving and how much you need to invest to meet your goals feel free to contact me. I can put together a customized financial plan tailored to your financial situation. All information provided to me is kept confidential and there is no obligation. Please take advantage of my resources, it is my passion for sharing valuable information that can help individuals and families secure a strong financial future.
Rene Gonzales
Senior Representative
c. 512-568-7203
e. Rene.Gonzales@Primerica.com
www.Primerica.com/ReneGonzales
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don't put all your eggs in the same bucket... is that something old to understand and applied for? well.. in my country, Indonesia we have a little different way on investment, rather than put the money in the bank at the traditional accounts, people who has more money will buy cows or goats and ask their relatives to take care of it or buy golden jewelry (not gold bars except for the higher class people).. all of that investment only for one goals, saving for a journey or pilgrimage to mekkah (mecca). Great advise and nice story to share @calastinone.
Thanks for adding your insight! I appreciate any feedback and love hearing from the community!
You make a good point.... But the problem is that the world is in such shambles that investment opportunities are barely existent.
Nowadays, most investment products are as risky as playing on a Casino Roulette.
Even things like Oil, Gold and Silver have crashed from their highs and stagnated ever since.
The safest investment available in my country offers a return of 1%... before taxes. It's not even worth the effort.
PS: I've came here after a suggestion by @karamyog in the Pay It Forward Contest
I don’t know where you live? I wish the investment world was better where you are at. To give you an idea of how the US market is doing in the last years we have witnessed an 8% growth in our stock market overall despite the dips in between those years. All I can say is stay positive out there, be optimistic even though it’s a tough environment, do your research and keep reading for materials that can help you in your personal financial situation. Stay productive and seek out resources that can help you navigate through those rough financial waters. I know you can do it
Good article mate and i agree with what your saying. By sitting on cash, people are not only eroding their present value of cash through inflation, they are also missing out on the opportunity cost of investing. May be its because people dont trust the financial system after 2008 crash but i am glad you are bringing these points out. Well written piece.
Thanks for mentioning about the effect of inflation I completely forgot to even mention how that affects cash. Thank you for your support. I just believe because we are not taught finance in school we are not educated in this important area of our lives. We are all going on with our lives trying to do the best we can with our financial situations, but with our having a financial GPS or a “financial Manuel” we struggle with this area of our lives.
Hi Sounds like you are doing a great job of spreading the word wherever you go.
I found you because you were featured by @karamyog in the Pay It Forward Contest this week.
Wow! Thank you for your support. I just read a recent quote you just reminded me of,
“NO ONE IS USELESS IN THIS WORLD WHO LIGHTENS THE BURDEN OF ANOTHER.” -unknown
The couple may have read or heard about Robert Kiyosaki's strategies, or at least about his "Rich Dad, Poor Dad" book. 😊
I learned from Robert's talks and writings (through his Facebook page) the same mindset of revolving your money instead of having the bank benefits more from it. It is good that you have echoed it out here.
I came across your post through @karamyog who featured it.
Awesome! Thanks for the support, I’m glad to get any feed back, it’s a good feeling to know I’m on the same page of some of the other popular Fiance role models out there.
I've been loaded and now it's past payout on this blog but I just wanna say you're welcome. 😊
Thank you for your support!
You're welcome.
It's a bit like my grandparents who used to have cash under their mattress all of the time; after living through the depression, they used the bank sparingly! Perhaps people are afraid to "lose" their money through investing?
I found your post because @karamyog featured you in an entry for our Pay it Forward contest where I'm one of the judges. We would love it if you joined us with an entry of your own next week too!
I understand your grandparents reasons, they lived through one of the hardest times in US history, I also remember my grandparents scraping every little bit of food out of containers before they threw anything away, as I grew up I asked them why they did that and they told me it was just a habbit after living through those tough times. We have been lucky not to have gone into another depression and we have been close, there are new talks about us going into another recession soon! so there is a reason to be concerned about finances. The new recent recession forecast is being widely talked about hopefully we don't realize another one, but as time passes it looks like we unfortunatley may be headed into another one soon.
I hope you're wrong about that, but it does look like the US especially is nearing another recession. Perhaps our grandparents were on to something :)
We’re supposed to witness another rise in interest rates before the end of the year, I keep seeing articles regarding our US housing and real estate market warnings from Wall Street stating there could be a halt in that industry a major indicator to watch
ah good to know @calastinone, thanks!
in this modern world where America never had any woman as president, I think your story not a shocking one to me, men invest more than women because the women invest all their money on themselves or families, I supposed? perhaps... people need more trust worthy system to secure their invesment right?
Hi, I think your on to something, as I read your comment I tried to relate to my wife on this, your right women are concerned with raising and taking care of their families as my wife never had time or showed any interest in this part of our financial lives. I think your right about women not actively taking part due to thier other priorities.
I was talking about myself as woman😊 Though I had much money from my job, I couldn't make any investment that time, I have to support my family and saving a bit by buying golden jewelry which is the best investmen system for me rather than buying stocks or other kind of investment😊 thank you for your respon.