We are raised on a lie.
Our parents and grandparents told us: “Work hard, save your money, put it in the bank, and you will be fine.”
For their generation, that was true. Savings accounts used to pay 10% interest.
For our generation, that advice is financial suicide.
If you are keeping all your wealth in a savings account because it feels “safe,” you are not saving money. You are slowly bleeding out.
In the modern economy, cash is not an asset. Cash is a melting ice cube.
The Invisible Thief: Inflation
You think $100 is always $100.
But money is not a constant; it is a measuring stick that keeps shrinking.
This is called Inflation. Governments print money to keep the economy moving. When there is more money in the system, each individual dollar is worth less.
Here is the brutal math:
- Inflation average: ~3% to 4% per year (sometimes higher).
- Your Bank Interest: ~0.5% per year.
If you have $10,000 in the bank, next year it will still look like $10,050. But it will only buy $9,600 worth of goods.
You didn’t spend a dime, but you lost purchasing power. You are working 40 hours a week for a currency that is losing value while you sleep.
The Discipline of Ownership
The only way to escape this trap is to stop being a Consumer of Currency and start being an Owner of Assets.
Rich people do not hold cash. They hold assets.
- Stocks (Businesses).
- Real Estate (Land).
- Gold/Commodities.
Assets are things that tend to go up in value over time, or at least keep pace with inflation.
It requires discipline to invest.
Saving is easy; it requires zero effort. Investing is hard; it requires you to overcome the fear of “losing money” in the short term to gain freedom in the long term.
The “Risk” Illusion
“But investing is risky!” you say. “What if the market crashes?”
Here is the Reality:
- Investing Risk: The market might go down 20% this year, but historically it goes up 8-10% average over decades.
- Cash Risk: Your cash is guaranteed to lose value every single year.
Keeping cash is not “safe.” It is a guaranteed loss. It is the only investment where the return is -4% every single year like clockwork.
How to Stop Being a Loser
You don’t need to be a Wall Street genius. In fact, trying to be a genius usually loses you money.
You just need to be Average.
- Keep an Emergency Fund: Keep 3-6 months of expenses in cash. This is for peace of mind, not for growth.
- Invest the Rest: Put the rest into boring, low-cost Index Funds (like the S&P 500 or a Total World Stock Market fund).
- Automate It: The ultimate discipline is removing yourself from the equation. Set up an auto-transfer the day you get paid.
The Verdict
You have two choices:
- Let inflation eat 4% of your life energy every year.
- Own a piece of the economy that grows.
Stop hoarding cash under the mattress. It’s rotting there.
Wake up and buy assets.
The Challenge:
Log into your bank account today.
Look at the interest rate you are earning on your savings (it’s often listed as APY).
Compare that to the current inflation rate (Google “Current Inflation Rate”).
Realize the gap. That gap is how much poorer you are getting every day.