I recently took an Uber to my business networking meeting in downtown Austin a few weeks ago, My conversation with my Uber driver led us to a financial discussion and further went into his personal strategy at building wealth. We were trying to convince each other that our two different strategies were justified. At the end of my discussion with my Uber driver, it came down to him sitting on $16,000 in cash that he is sitting on in his personal savings account.
I was excited for him and tried to tell him that his decision for leaving that money in a personal savings account wasn't going to build him a significant life-saving account for his future. He proceeded to tell me as we were closing our discussion as my destination approached.
This conversation with him reminded me about 2 other couples that came by my office during the last 2 years had a similar situation on their hands too, but unlike the Uber driver, the two couples realized that just sitting on some pile of money wasn’t going to get them wealthy. I read an article recently from NeardWallet that the average American today is holding more than $32,000 in cash. They were able to come to that conclusion by looking at traditional savings accounts. These accounts, if you are lucky are only earning at most 1% interest on the average American citizen's personal savings account. To give you an idea on what the average American is missing out on let's just say a 30-year investment that is earning a conservative 6% could be making $140,000 over that 30 year period.
The article goes on to mention that 4 out of 10 Americans don’t invest their money at all! Almost more than half have admitted that they don’t know how to invest or think investing is way too risky. 16% of Americans said they don’t trust financial institutions, a surprising 8% of people said keeping their cash is the best way to make sure they hold and build wealth.
A good suggestion I would like to recommend following this article is instead of sitting on a stockpile of cash a good strategy would be to only sit on 3-6 months worth of an income and the rest of your stockpile should go into an investment type of product. Just remember the 30-year investment opportunity I mentioned above, If the average American invests their stockpile in a high-yield account, or in an investment product their wealth building strategy could be realized by a difference in the millions.
Between the average person who is investing men seem to be active more than women, The article goes on to mention that 24% of Americans are still not investing or actively doing their part to build strong wealth.
If at least a minimum take advantage of your employers 401(k) sometimes they are not the best programs put together, but at least you are doing something that is automatically being taken care of for you by your employer since they take out from your checks monthly and sometimes they offer matches. Take advantage of that!
If you live in the greater Austin area and would like to know how much you should be saving and how much you need to invest to meet your goals feel free to contact me. I can put together a customized financial plan tailored to your financial situation. All information provided to me is kept confidential and there is no obligation. Please take advantage of my resources, it is my passion for sharing valuable information that can help individuals and families secure a strong financial future.
Rene Gonzales
Senior Representative
c. 512-568-7203
e. Rene.Gonzales@Primerica.com
www.Primerica.com/ReneGonzales
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