The first step towards financial independence is developing a habit of saving money. By saving money, you are exhibiting self-control and responsibility. The belief that saving is a virtue is widely spread and was probably passed down to you by your parents. Many of you may have already done a savings account comparison and deposit money regularly into a high-interest savings account, safe in the knowledge that your money is safe and sound.

But what if today none of that was true? 

What if your savings were costing you money? Is this possible? 

In a nutshell, yes.


Let’s pretend you have a crisp fifty-dollar note in your pocket. Now through the wonders of science, you were sent back in time to 1981. Many a cult classic horror movie was premiering in movie theatres, and with your $50, you could have seen all of them twice. Due to inflation, taxes and other complex factors, your money would have been worth more back in 1981 than it is today. Data shows us that ticket prices have increased by a %1000 since 1980!

Now let’s pretend you get sent forward in time, to say, 2081. How much would your $50 buy you? I’m willing to wager not much. By placing your money in a savings account, you run the risk of falling behind the market. Even a high interest online savings account pays only marginally higher than the projected rate of inflation.


Should you just spend all your savings instead? No, and in no way am I suggesting that you pull all your money out of your high-interest online savings account either. Having some money saved for emergencies is a fantastic idea, and everyone should have a small buffer of cash available to them. As an investment, a savings account is a false economy. You will pay more in fees and tax than you will receive in returns. As a secure place to keep your money from deteriorating I give the savings account a thumbs up.

Use it or lose it.

By keeping your money locked away in a savings account, you not only risk losing value but also opportunity. Using your savings as capital for investment will net you far higher returns than any savings account and could even grant you tax breaks. There are several distinct invest types so let’s have a look at them now:

  • Commodities

Tradeable goods and materials. Think precious metals, oil, or grain.

  • Paper

Agreements such as stocks, mutual funds, and bonds.

  • Businesses

Investing a stake into a business. For a very Hollywood example, think Dragons Den.

  • Real Estate

Owning property. You can rent out a property or ‘flip’ a property for a profit.

As you can see, there is a wide variety of investments you could choose that will grow your money, instead of stagnating in a bank account. Banks use your deposited money to play financial markets and make profit so why shouldn’t you? There are many great resources online pertaining to investment, so there is no excuse for ignorance. 

The concept of losing money through savings may seem foolish, but it is a very real threat. Going against accepted tradition is always difficult, but if you can break free from mindless saving you may just see the light. Do you think the Steve Jobs and Elon Musks of our world grew wealthy from online saving accounts? Or did they build their wealth through bold investments and putting money on the line? Saving may be safe, but you may be losing out in the long run.