Most people would likely agree that their goal is to save money. It’s what we’ve been told to do since we were old enough to understand what money was. One budgeting expert, however, surprisingly doesn’t think saving is the way to go.
A budget expert has asked people to stop saving their money.
A woman named Angie, who shares content about “life and money” on social media, urged everyone to stop trying to save all of their money. “Please stop saving your money!” she declared in a TikTok video. “Saving money will never get you rich.”
This is pretty shocking coming from the mouth of a budget and financial expert, as from a young age, we’re taught the importance of saving as much money as we possibly can. But Angie felt that she had a better alternative.
“Let’s say you decide to start saving money today,” she said. “So you go to the bank, you open a bank account, and you start depositing $400 every single month into that bank account for 12 months — for a whole year. After that one year, you will have a total of what? $4,800 in that bank account.”
Instead, Angie suggested that you put your money to work for you.“Let’s say instead of saving $400 away into a regular bank account, you decide to take that $400 and start investing it every single month in an ETF or stocks, assuming an 8% growth rate or 8% rate of return.”
The difference in outcomes is truly astounding. “In one year, you will have $5,400 in that account. Now looking into the long term, after 50 years … if you start saving when you’re 20, you’ll be 70, okay? Just keep in mind after 50 years … and you have always saved $400 in that account, or every single month for 50 years, you have $240,000,” she shared. “That’s not bad, right?”
Almost a quarter of a million dollars is nothing to sneeze at, but the outcome is vastly different if you invest the money instead. “But if you invested that $400 every single month for the next 50 years, consistently at a rate of return of 8%, you will have over $3.1 million,” she revealed. “So please stop saving your money.”
While Angie was confident in her alternative to saving money, commenters mentioned the risk involved with investing.
Angie’s fellow TikTokers were quick to point out that investing money often isn’t as rosy as she made it sound. “Let’s normalize talking about risk involved,” someone said.
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“Investing is not simple to the average person,” another added. “Save while you’re learning, then invest when you’re ready and comfortable. You wanna know where your money is going.”
Others encouraged those watching the video and reading the comments to put time, energy and money into both saving and investing. “It’s important to do both,” one person said. “Save first and then invest. Have an emergency fund first, then invest.”
If you are interested in low-risk investments, there are plenty of options out there.
If you weigh the options and advice and feel like Angie’s guidance is the best for you to follow, there are multiple ways to do that without putting yourself and your money at too much of a risk. Of course, with greater risk comes greater reward, but not everyone is comfortable taking that leap.
Writing for Bankrate, James Royal, Ph.D., listed multiple forms of low-risk investments that are great for beginners, like money market funds, fixed annuities, and corporate bonds. Royal said these work best “if your goal is to preserve capital and maintain a steady flow of interest income.”
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Whatever you decide to do with your money, remember that the choice is ultimately up to you and depends on what you feel most comfortable with. The return might not be as high, but there’s nothing wrong with just saving if that’s what you choose to do.
Mary-Faith Martinez is a writer with a bachelor’s degree in English and Journalism who covers news, psychology, lifestyle, and human interest topics.
