More Money Podcast - Stop "Saving" for Retirement - Money Minute with Jessica Moorhouse

Episode Date: February 7, 2020

If there's one thing that grinds my gears it's when people use the wrong terminology! And people, journalists, even some financial experts keep saying this and it is WRONG: "Save for retirement" Nope. You can't. You cannot save for retirement. Because saving is the act of putting cash in a savings account, keeping it liquid, and earning very little interest. So stop saving for retirement, and instead start investing for retirement. Investing is the only way to build your wealth for retirement. So stop saying "save" and start saying "invest" for retirement, because it more accurately describes the steps you need to take to get to that $1 to $3 million dollars you'll probably need to retire by 65. Learn more about your ad choices. Visit megaphone.fm/adchoices

Hello, hello, hello, and welcome back to another Money Minute episode with yours truly, Jessica Morehouse. Welcome back. I'm going to spend the next very few short minutes talking to you about something that is very important. This particular thing that I want to talk about is something that drives me crazy, grabs my gears, all that kind of stuff. It is when people use the phrase phrase saving for retirement. I first started, you know, kind of my own personal finance journey, started reading all these books about retirement planning and investing and saving for retirement. They would use that phrase over and over, saving for retirement. And I still see people use it in conversation or, you know, journalists use it in, you know,

articles they write. And it drives me crazy because it is inaccurate and impossible. So saving, the actual act of saving means putting cash into a savings account or I guess under your mattress, but that is a terrible idea. Don't do that. It is keeping your money liquid. So it is not investing in anything. It is just, you know, cash in a bank or under your mattress. Again, don't do that. You cannot, it is literally probably impossible unless you win the lottery or I think that's kind of the only way, get inheritance, I suppose. It is impossible for you to save enough cash, put it in the bank, and have enough by the time you turn 65 or 70 and want to

retire to have enough money to live off of. You cannot save enough for retirement. What you can do is invest enough for retirement. The only way you will have that one or two or three million dollars that you need in order to survive decades in retirement is if you invest your money. Well, right now, quite honestly, the sooner you start investing for retirement, the better off you'll be in the future. So let's stop using the phrase saving for retirement because it's inaccurate. You cannot save enough cash to live off of in retirement. The only way you'll be able to survive in retirement is if you invest your money. So it grows, it compounds and it becomes that big number of a million dollars. And one fun thing that I love to do is, you know, bring up a

little compound interest calculator and calculate, okay, if you were to personally contribute this amount of money, like a thousand dollars a month or whatever into a savings account, giving you, I don't know, 2% interest, how much will it grow in the matter of, I don't know, three or four decades, then do the same and say, you know, 7% interest you return on your investments, because that is the average market return of a stock market. And see what the number difference is. It is hundreds of thousands of dollars. So that's my little rant. I hope you enjoyed it. If anyone ever says to you saving for retirement, please correct them. Say, actually, it's invest for retirement.

And then they will most likely never want to talk to you about money again because you're that person. But you know what? I'm that person and I don't mind. It's fine. So that is my money minute. We don't save for retirement. We invest for for retirement you want to learn more about investing well well look at that i actually have a course just for you i have a course called investing foundations for canadians some americans have taken it so don't be afraid but uh it goes into all the things you need to know about investing as a canadian so rrsp's tfsa TFSAs, what are the different types of investment products you can invest in? How do you make an investment plan? It goes into all of that amazing stuff. There's a ton of students that have taken it, lots of great testimonials. So I'm not just

tooting my own horn. Check it out at jessicamorehouse.com slash investing foundations and start investing for your retirement. All right, that is it for me. Thanks so much for listening to this other edition of Money Minute with me. I will be back here next Wednesday with a fresh new interview for the Mo Money Podcast. Have an amazing Friday and amazing weekend. I'll see you back here next week. This podcast is distributed by the Women in Media Podcast Network. Find out more at womeninmedia.network.