FOUR reasons why savings accounts are stupid

Now this might sound like a crazy topic from a guy like me who continuously pushing not spending money.  Isn’t saving the opposite of not spending. Well yes, but around here we save to invest we don’t save for the purpose of saving.

See as I have said before, most people save for the purpose of making a bigger purchase but that doesn’t make you wise it just makes you massively dumb because you are a massive consumer.  Producers get rich. Consumers get poor. Consumers are dumb.

You have to see your money as little seeds, little workers, and their job is to go out and bring you more money.  They can’t do that snoozing in a savings account earning .25 percent and they damn sure can’t do that chilling on a beach taking pics for the gram. 

So we all know why that play play is dumb.  If you have been following me for some time you already know my spiel on that.  This blog though is about why I recently thought about opening a savings account but decided to throw more money into my investments counts instead.

Opportunity cost

So the biggest and most obvious reason is that savings accounts these days and even CDs pay terrible terrible rates.  An opportunity cost is the loss of potential gain from other alternatives when one alternative is chosen.  When most people think opportunity cost they usually think that this is the lesser choice.  They choose the better alternative they chose the job that makes more and the opportunity cost is the lesser job.  However, in a savings account making .25 your opportunity cost is the 7-12% you can get on the open market.  This is HUGE.  This is why its so easy to pluck private money out of savings accounts because the opportunity cost disparity is glaringly obvious.  Don’t be one of the people how misses out on the big wins betting on safety and security. YOLO.

Too easy to access

The key to wealth building is making money permanent.  This is the cash asset cash thing I keep talking about.  It doesn’t make sense to get wealthy and destroy the wealth.  It doesn’t make sense to sacrifice and save only to blow that money on a car down payment OR, even the down payment on a large home you can’t afford.

In order to keep your money permanent you have to make it tough to get to.  This is what Grant Cardone did when he created his “sacred accounts”.  This is what a brokerage account or even a rental property will do for you.  The beauty of buying assets is that you don’t really lose the money like you lose money when you consumer.  All you are doing is taking your income and shifting it.  In order to then access that money you gotta do some things though.  Its not easy and this is why people call real estate a forced savings if you will.  Forced and damn difficult to get into.

Your savings account is easy to access which then makes it easily susceptible to the play play. Keep it real, with the advent of technology your savings account is basically a second checking account.  When I lived in DTLA I would be on a rooftop, slide savings to checking via the mobile app and keep the party going! That ease of access is detrimental to your long term goals because sometimes you need to protect yourself from yourself.  Make it difficult to ruin your life by placing your wealth in difficult to access accounts.

Motivation to throw more in

Whenever I have a position that loses or takes a small dip, when I know long term it will do well, I am motivated to buy the dip.  To buy the dip I need new money, this new money grows my account balance because it increases the principal amount invested but it also adjusts my cost basis lower so that then when the stock finally does run I get a double bonus growth and return to even.

When I have a losing position that I know is high quality the “loss” gnaws at me.  I feel unease until I have corrected it. This has allowed me to grow my account balance exponentially over just a few months.

Sometimes we need other motivation to do great things out side of the results. For me, seeing the balance move and grow makes me happy, almost as happy as a consumer who buys some new Jays. This is motivation to throw more money to get more of that feeling.  I have connected a chemical feeling toward a positive goal as opposed to the chemical feelings we chase on detrimental goals.  You wont get this looking at your savings account sit there stagnant but you will get this through the oohs and ahhs of the market roller coaster.

Much better alternatives

I almost made the mistake of opening up a savings account but then I thought against it.  Investing is saving.  When you invest you put money away and you don’t touch it. The same is true for saving.  The benefit is that investing tricks you into saving more because its a game.  Also, investing keeps you saving longer.

These days, if you look hard enough there are so many better alternatives out there and this is exactly what we will be talking about at the Wealth Conference.  There are tax liens, foreclosures, businesses, stocks of course, real estate, silver, gold, oil.  There are so many opportunities to build your wealth when you start focusing on the things to build and less on the things to destroy. What  you focus on tends to expand and when you focus on assets and wealth the world of wealth expands to accommodate you and your goals. So stop saving, start investing.  Build the life you dreamed about.

Bonus: The bank makes more money on your money than you do

Banks aren’t doing you any favors. Its all a business. What a bank pays you is the wholesale fee for the right to lend your money.  The then take your cash and lend it out to other people at 4% or even all the way up to 25%.  Why not be the bank instead and you become the lender.

So that’s it.  If you want to shift from middle class to wealth you want to focus on your assets and growing them.  Its easy and lazy to let your money sit but easy and lazy never made anyone wealthy.  You have to be willing to do the research, gain the knowledge and gain the experience that will allow you to grow wealthy as an investor.  Don’t be a broke frustrated chump. Take the action to change your life.

As always, if you are interested in joining any of our investment clubs email If you have not yet filed your taxes or are looking to create an LLC to organize your hustle, email to get set up today!

Be great, invest well,

Todd Millionaire



Leave a Reply