Jaspreet Singh Reveals 3 Reasons Millionaires Save Money

Jaspreet Singh / Jaspreet Singh

Commitment to Our Readers

GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.

20 Years
Helping You Live Richer

Reviewed
by Experts

Trusted by
Millions of Readers

Jaspreet Singh is a financial personality known for his direct, common sense advice regarding the wealth-building process. His Minority Mindset blog and YouTube channel have “nothing to do with the way you look. It’s the mindset of thinking differently than the majority of people.” According to Singh, by approaching money from a different perspective, you can achieve greater financial independence than the majority of people.

To emphasize this point, on Sept. 23, 2023, Singh tweeted, “Millionaires only save their money for three reasons… If it’s not for these reasons, saving money is making you poorer.” If you’re curious how saving money can actually make you poorer, read on.

What Are the Three Reasons?

According to Singh, millionaires only save their money for these three reasons:

• An emergency fund
• A big purchase
• A big investment

These all seem like solid reasons to save that might apply to anyone. So how do millionaires do things differently?

Beyond these three reasons, Singh says that millionaires don’t simply sock away money and just leave it in savings. They invest it. While an emergency fund is an important basic building block of long-term financial success, beyond that, money should only be in a savings account when it’s awaiting a better investment opportunity.

The lesson here is that a savings account, even a high-yield savings account, is not the path to long-term wealth. It is merely a stepping stone.

How Can Saving Money Actually Make You Poorer?

You’ve likely read that America has a savings problem. Headlines proclaiming “Americans can’t pay a $1,000 expense” are everywhere. And while it’s true that many Americans need to boost their emergency funds, the real issue is the lack of long-term investments, and this is what Singh is addressing.

As Singh told GOBankingRates in an exclusive interview, “Do not save all of your money. If your savings are not growing faster than inflation, your savings are losing value.”

For example, if inflation is at 5% and your savings account is only paying you 3%, you’re actually losing 2% in real value every year. And this doesn’t even take into account taxes, which reduce your real return even more. This is what Singh means when he says that saving money can actually make you poorer. Unless you’re running to keep up — by investing your money — inflation and taxes will actually set you back. Your purchasing power simply won’t keep up unless it can outpace the rate of inflation.

What Are Singh’s Tips on Saving When You Don’t Earn Much?

While Singh stresses the importance of moving beyond a savings account into long-term investing, he understands that socking away that first $1,000 can be a key step in the process, especially for those that don’t earn a lot of money. In one of his videos, Singh outlines a method to save $1,000 in 30 days. His tips include:

• Renegotiate your bills
• Stop spending
• Sell your stuff
• Work to hustle
• Shop smarter

By making these changes quickly, you can build up a small emergency fund that can prevent you from going into debt for minor emergencies. From there, you can work on building a more sizable emergency fund and move into investing for the long term.

How To Move From Saving to Investing

Singh’s advice regarding how to get started investing is to treat it like a bill. In other words, make your investments the first “bill” you pay every month when you get your paycheck.

The actual breakdown, according to Singh, should be 75/15/10: no more than 75% should go to your expenses, at least 15% should go to your investments, and 10% should go to your emergency fund. Once your emergency fund is in place, you should bump up your investments to at least 25% of your earnings.

Singh bases his investment philosophy around building passive income. He suggests investing in rental real estate, dividend-paying stocks and/or small businesses as ways to throw off regular income. By reinvesting this passive income into more assets, you can eventually generate enough of a monthly “paycheck” to cover all your expenses and more. Once you’ve reached this level, where your passive income literally pays all your bills and even your discretionary expenses, you’ve found true financial freedom, according to Singh.

One thing to note about Singh’s recommendations: While he outlines a path to wealth that works for him, he stresses that he is not a financial advisor — and that he doesn’t necessarily recommend everyone follow his specific suggestions. Rather, everyone should create their own path to wealth based on their own needs and tolerance for risk. That is sound advice for everyone.

Share This Article: