Believe It or Not, Saving Money Is STUPID!

Dear reader,

Like most people, you were probably told growing up that saving money was a smart financial decision. Our culture is filled with positive little sayings about saving money like, “A penny saved is a penny earned,” or “Rainy day fund,” and “Another day, another dollar.” 

“My poor dad always said, “Work hard and save money.” Conversely, my rich dad always said, “If you want to be wealthy and financially secure, working hard and saving money will not get you there.”

Of course, I agree with my rich dad. In fact, I believe savers are losers. Of course, I’m speaking of a certain kind of saver. The one who puts money in a low-interest account and hopes that by the time they get to retirement it will have magically grown into all they need to live on. It doesn’t work, and its bad financial advice. In an economy where almost everything is built to take your money, saving it is of little value. 

From inflation to taxes to hidden fees in your 401(k), the system is stacked against you. Below are the three main reasons you should give up the idea you can save your way to being rich:


If you notice, you can get a tax break for buying a house and going into debt, but you don’t get a tax break for saving money. Given that the government uses tax policy to encourage certain behaviors, it would stand to reason that since there are no tax breaks for saving money, they don’t want you actually saving it.

“People who work hard and save money have a hard time building wealth because, relatively, they pay more in taxes,” said rich dad.

He went on to explain that the government taxed savers when they earned, saved, spent, and passed on their money in the form of income tax, capital gains tax, sales tax, and estate tax.

Saving is not an activity the government really wants to encourage—even though it pays ample lip service to it—because saving does not grow the economy, debt does.

So if you’re a saver, you’re a loser because of taxes.

Rich dad also explained that another tax decimated savers—a hidden tax called inflation.


Rich dad explained, “Your $1,000 is immediately eaten away by inflation, so each year it is worth less.”

Rich dad went on to explain that each year the interest the bank paid you was eaten away by both taxes and inflation. The government took 30 percent of the interest earnings through capital gains taxes and inflation ate away at almost all the rest…or more.

As mentioned above, $1,000 saved 50 years ago would be worth $137.45 today. That, coupled with taxes, means you are in the negative when it comes to the purchasing power of your dollars when you are a saver. That is why rich dad thought that working hard and saving money was a difficult—if not impossible—way to get rich.

So, savers are also losers because of inflation.


When you work hard to save money, you place your “security” in those savings. It becomes very hard for those who spend all their energy saving money to branch out and invest it for fear all their hard-earned money will be lost.

“People who work hard and save often think that investing is risky,” said rich dad. “And when you think something is risky, you avoid learning.”

Rather than take a perceived risk to grow their money exponentially through investing, most people take the “safe” route of saving their money because it is what they know and understand.

Unfortunately, as we learned above, saving is not safe. In fact, it often is the riskiest way to use your money because of taxes and investing.

Invest Instead And You’ll Win

If you want to get ahead financially, you must know how to spend your money wisely—by spending your money on cash-flowing assets. 

When Kim and I were young, we did this by hiring our bookkeeper, Betty. Each month we instructed Betty to first put our money for investing to the side…even if we couldn’t pay our bills. She didn’t like doing it, but she did. And we didn’t need to think about it. It was automatic. 

Spending money wisely, of course, takes financial intelligence. And that takes financial education. In order to see and understand the markets, you must teach yourself the language of money and the concepts that make the markets run. You must study, and hard.

The good news is that information is plentiful. All you have to do is look. Today, start thinking less about saving your money and more about investing it. This subtle mind shift will make a huge difference in your financial future.

The Need For Financial Intelligence

At the end of the day, why do people save? For most, it is to prepare for retirement. Yet, most of us know that saving itself is not enough to prepare for a secure retirement. This is especially true for young people who will never see a pension from their employer.

Today, everyone is expected to invest for a secure retirement. Unfortunately, our schools do not prepare us to invest wisely or well. So, it is up to us to become financially educated—and to teach our children financial education as well.

This is something the wealthy have done for generations. For instance, Mike, my rich dad’s son, had an investment portfolio of $200,000 by the time he was 15-years-old. “Whether he chose to be a policeman, politician, or a poet,” said rich dad, “I wanted Mike to first be an investor. You’ll become far wealthier if you learn to be an investor, regardless of what you do to earn money along the way.”

The rules have changed. In the modern world, you need a greater level of financial sophistication, and so do your kids. I encourage you today to increase your financial education and prepare for a brighter, more secure financial future.


Robert Kiyosaki

Robert Kiyosaki
Editor, Rich Dad Poor Dad Daily

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Robert Kiyosaki

Robert Kiyosaki, author of bestseller Rich Dad Poor Dad as well as 25 others financial guide books, has spent his career working as a financial educator, entrepreneur, successful investor, real estate mogul, and motivational speaker, all while running the Rich Dad Company.

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