The saying goes: “A penny saved is a penny earned…” Yet I would argue that this is a case of flawed thinking.

We sometimes get a chance to peek into the lives of financial gurus that have made the jump into the billionaire category from very humble beginnings. I’m talking about Bill Gates, Warren Buffet and Sir Richard Branson here, for example.

When you look at their lives you will NOT find any evidence that either of them was able to attract such a fortune from the power of a savings account. Why is that and if that is true that saving money does not make you rich or in almost all cases even make you financially independant why do banks and financial advisors keep steering us into saving our money?

Before we go on let me clarify one quick thing: When I talk about saving I mean the kind of behaviour where we go and put our earned cash into an account that yields at best 2-3 % per year. I am not talking about saving, as in getting a better deal, on something you are buying or investing in.

So let’s approach this issue from 2 angles and put the myth to bed that saving will make you rich one day.

1) There simply isn’t enough time for your money to multiply in a savings vehicle

Time is a crucial element in determining the growth of capital.

The best rule to use is called the Rule of 72 !

If you take the interest you are getting from your account and divide 72 by that number, it will tell you how many years it will take before your initial amount doubles.

Example: If you are getting 3% in your savings account (72 / 3 = 24 years) it will take 24 years for your money to double in value. At 2% that would be even longer as it would take 36 years to do so.

Now, if you are starting out on this financial abundance journey like the majority of people, you likely don’t have $ 500,000 sitting around to put into a bank account for retirement. On top of that in order for you to have a cool 2 million to retire on it would take a whooping 48 years (at 3%) and that’s a bit longer than we want to wait for.

The other part of this is a little concept called inflation. If inflation is 2% per year, which indeed is very low for current times, and you earn 3% then really you are only 1% better off than last year with your money.

If inflation is 3% and you are getting 3%, guess what it’s a big fat 0 in terms of growth.

2) Saving comes from the mental standpoint of lack, not growth…

The law of attraction is deeply aligned with the laws of nature and nature only knows one principal law: the law of growth ! If you observe a tree over the years you will surely see that it cannot help but grow a bit more every year.

If we can manage to allign our mind with the concept of growth then we will prosper in every way. Financial growth is no exception here. If we instead follow the line of thinking that we need to have money for a rainy day, not only are we repeating the thought subconsciously so much that we end up creating the rainy day we are trying to avoid, but we also tell the universe that we don not believe in our power to create growth for ourselves.

Those that are always looking to save a penny more and are overly stingy with everything are not alligned with the law of attraction and thus are cutting themselves off from massive growth. Those that believe in their ability to create whatever they need and want are coming from abundance and they will always harness the power of the universe in their endeavors.

To conclude this post, I just want to reiterate that it’s ok to get started with a bank account that allows you to put money in and draw money out easily like a chequing or savings account. Both these vehicles have value for both personal and business use and to pay bills.

But you should part with the idea of using your savings account as a means to build wealth for retirement or to fund your dreams. Instead make a financial plan and set an ambitious goal to reach by investing in the market place and in yourself to realize your dreams.

After all, Richard Branson took many big gambles in his life but always came out on top with even more money than before. You can do the same.

See you at the top…

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