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Stop Saving for retirement. Start Investing for Retirement Instead.


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Saving money is never a bad thing, right? You take a proportion of your check every payday and then tuck it away in a savings account. You’re doing exactly what you’re designed to, correct?

Wellllllllll, type of. Unfortunately, saving alone won’t ever get one to retirement. You’re the perfect path, but the money that you ’re siphoned off isn’t even growing like it might be. Not really close.

Let’s take a look at why this won’t function — and also exactly what you should do .

The Downside of Saving

To retire comfortably, you have to grow your money. You will need to build wealth.

Saving money is all well and good, however it ’t actually grow your money. That’s what investing is to get .

Here’s the thing about savings: Let’s say you set your money in a savings account at a bank. According to the Federal Deposit Insurance Corporation (FDIC), the average rate of interest on savings accounts is currently 0.05percent APY, which is super low. Not that long ago, you might have discovered rates upwards of 3 percent, but those times are over.

And if you bank with a big national series, your speed is most likely even lower. The best brick-and-mortar banks frequently provide you with a measly 0.01% APY on savings accounts.

What exactly does that mean? This means that if you deposit $100 into that savings accounts, you’ll earn one cent of interest per year.

This ’s correct — a cent. A cent.

You might as well push your money under your mattress for all of the good that’ll do you.

The Benefit of Investing

Now, let’s say you spend that money, instead.

Historically, investing in the stock exchange has given an average yearly return of 7%, adjusted for inflation, according to the U.S. Securities & Exchange Commission. Stock prices go down and up. However, more than they usually grow by 7% a year.

Let’s say you spend $100 in shares. Rather than earning a cent following a year, you’d earn an average of $7.

Let’s believe larger. Let’s say you’t got $1,000 saved up. After a year, a savings accounts could earn you , while investing could earn you $70.

Now let’s believe somewhat larger . Let’s say you’t got $10,000 in savings. After a year, a savings accounts could earn you $10, while investing could earn you $700.

You see the difference?

The Way to Start Investing?

Should you truly feel like you don’t even have enough money to start investing, then you’re not alone. But guess what? You actually don’t even need that far — and you may also find free stocks (worth up to $200!) In case you know where to look.

If you’t earned $5, $100 or even $800 to spare, then you should start investing with Robinhood. Both investing beginners and pros love it as it doesn’t control commission fees, and you can buy and sell shares free — no limitations. Plus, it’s super easy to use.

When you download the program and finance your account (it takes no longer than a few minutes), then Robinhood drops a share of free inventory into your account. It’so random, however, in order that inventory might be worth anywhere from $2.50 to $200 — a great boost that will help you build your own investments.

There’s the chance that you could strike it rich.

Sure, an average yearly return of 7% is nice, but a good deal of investors did a lot better than that last year. They essentially triple their money — or more.

Two examples:

At the start of 2020, an share of Amazon inventory cost $1,900. At the conclusion of 2020, it cost $3,250.
At the start of 2020, an share of Tesla inventory cost $96. At the end it cost $705.

Therefore, if you wish to retire comfortably — or if you want to retire at all — it’s time to start investing.

The ideal time to begin investing has been a year ago. The second best time to begin investing is correct now. If you’t earned $5, $100 or even $800 to spare, then you should start investing with Robinhood.

Mike Brassfield (mike@thepennyhoarder.com) is a senior writer at The Penny Hoarder. He’s not rich, but you believe he stinks.

This was originally published on The Penny Hoarder, which helps countless readers worldwide save and earn money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 rated The Penny Hoarder as the fastest-growing personal media business in the U.S. at 2017.

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