Are you making this big money-saving mistake?

  • October 23, 2019

CMG Image

Chances are if you’re working, you are saving for retirement.  Most employers have a retirement savings program where employees can set aside pretax money directly out of their paycheck and save it in a retirement account.  While most of us know we are “saving for retirement,” we may forget we are actually “investing for retirement.”  The money you deposit in your 401(k), Roth IRA, or other retirement account is typically invested in the stock market so your money grows. 

A MetLife survey of 8,000 Americans over the age of 18-years-old found 55% said they are not actively participating in the stock market, however one-third of those surveyed said they had a retirement account.  By using the wrong language, many Americans are unaware they are participating in the stock market.  This lack of understanding ends up hurting many consumers when it comes to investing, especially women. The survey found 44% of men and 59% of women are not investing. 

When you’re ready to get started investing, you don’t have to do it alone.  There are plenty of mobile apps and free sources to educate you about the stock market, but you can also work with a broker to show you how to invest based on current market trends.  For a fee, your broker can manage your money and help you set an achievable growth plan.

Saving money is also important, but where you save money makes a difference.  Bankrate found almost two-thirds of American savers are using savings accounts that pay less than 2% APY, one-fifth are using a savings account that pays less than 1% APY, and one in four are not earning any interest at all. Some banks offer a savings rate as low as 0.1%.  By using a basic savings account, or worse, saving money outside of an account, you’re missing out on interest-earning potential. 

Many digital banks offer higher-yielding savings accounts, because they operate with less overhead.  Some are paying up to 2.5% APY.  Digital banks are also less sensitive to market conditions, so if the Federal Open Market Committee (FOMC) continues to cut rates they won’t be as reactive.  The Federal Reserve reports the average American’s savings account balance is $8,863.  At 2.5% APY interest you’re earning about $221 extra each year, at 0.1%, that’s only about $8.

Whether you’re saving for retirement, a new home, or a special trip, the way you save matters.  Understanding the power of investing and choosing the right high-yield savings account can mean the difference between waiting for years or waiting for months to achieve your goal. 


Sources: CNBC, Money.com

Kevin Long
Area Sales Manager
NMLS # 195255
Branch NMLS # 1108042

Kevin Long

PHONE: (615) 567-8901

CMG Image
© CMG Financial, All Rights Reserved. CMG Financial is a registered trade name of CMG Mortgage, Inc., NMLS ID #1820 in most, but not all states. CMG Mortgage, Inc. is an equal opportunity lender with corporate office located at 3160 Crow Canyon Road, Suite 400, San Ramon, CA 94583 888-264-4663. Licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act No. 4150025; AK #AK1820; AZ #0903132; Colorado regulated by the Division of Real Estate; Georgia Residential Mortgage Licensee #15438; Illinois Residential Mortgage Licensee; Kansas Licensed Mortgage Company #MC.0001160; Massachusetts Mortgage Lender License #MC1820 and Mortgage Broker License #MC1820; Mississippi Licensed Mortgage Company Licensed by the Mississippi Department of Banking and Consumer Finance; Licensed by the New Hampshire Banking Department; Licensed by the NJ Department of Banking and Insurance; Licensed Mortgage Banker – NYS Department of Financial Services; Ohio Mortgage Broker Act Mortgage Banker Exemption #MBMB.850204.000; Licensed by the Oregon Division of Financial Regulation #ML-3000; Rhode Island Licensed Lender #20142986LL; and Licensed by the Virginia State Corporation Commission #MC-5521. CMG Mortgage, Inc. is licensed in all 50 states and the District of Columbia. Offer of credit is subject to credit approval. For information about our company, please visit us at www.cmgfi.com. To verify our complete list of state licenses, please visit www.cmgfi.com/corporate/licensing and NMLS Consumer Access (www.nmlsconsumeraccess.org).