Humphrey Yang Shares That You Shouldn’t Leave Your Cash in the Bank, Use These 5 Safer Alternatives

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Popular YouTube finance guru Humphrey Yang cautioned viewers that leaving excess cash in basic bank accounts erodes its actual value over time. He insisted that better options exist, which will not only protect money from inflation, but even generate healthy returns long-term.

Here, we break down Yang’s top 5 recommended alternatives for leveraging cash versus allowing accounts to sit idle.

Real Estate

Yang shared property investments as his top cash utilization pick, telling viewers “If you hold some piece of property or land — barring any natural disasters — that land is always going to be there, and it’s probably going to appreciate in value over time.” He noted that the relatively fixed housing supply is currently struggling to meet surging demand — meaning homeowners are sitting pretty with strong investments right now. 

As Yang explained regarding asset inflation, “More dollars are going to be chasing the same amount of homes, and so, if you do own a home in this particular location, then you’re going to see a lot of real estate appreciation.” He reminded viewers that the bedrock of property ownership carries value no matter what dollars actually buy or cost in the future.

Yang also explained how income-generating rental properties can provide extra inflation protection. Owning rentals allows landlords to raise rents over time as overall prices increase. So the rental income itself grows with inflation, offsetting higher owner costs.

Additionally, Yang noted that, by utilizing mortgages, landlords only have to put down a fraction of the property’s total value. For example, if you put $100,000 down payment on a $500,000 property, that means you control a $500,000 asset. If the property value grows 5% to $525,000 in a year, your $100,000 down payment earned a $25,000 return even though you only contributed 20% originally. This concept, called leverage, allows property owners to maximize gains.

Gold

Yang recommended shifting some cash savings into gold and silver since research shows they averaged 12%-13% annual returns amid 1970s/80s inflation. He explained that gold maintains its value better when more money is printed: “When governments print money and there’s more dollars chasing the same amount of goods, gold is going to be a really good inflation hedge in this case because it’s always going to be a tangible asset that people can’t make more of.”

Finite natural resources like precious metals resist sudden supply spikes, enabling their values to endure and even increase during periods of surging inflation or economic instability. 

Stocks

In addition to commodities, Yang trumpeted stocks — especially broad market index funds — as another inflation-combatting cash park avenue. He cited historical data showing that, on average, the S&P 500 returns between 8%-10% per year over multi-decade periods. This captures if not outpaces inflation while providing portfolio growth well beyond what idle cash accounts yield. 

Yang did qualify that stocks carry sequences of interim volatility risk missing from simple savings, making them inappropriate places to house money needed in the short-term. However, he shared that if you’re in it for the long(er) haul, temporary market declines matter surprisingly little if you stay invested. 

“If you hold stocks for 20 years, your real returns are going to be positive no matter what price you bought them at,” Yang said. He stressed that time in the financial markets beats fruitless attempts at timing markets for most amateur investors. Yang sees stocks as wealth vehicles if money won’t be needed for 5-10+ years.

Rare Collectibles

Yang also discussed rare collectibles like famous art or sports items. Their big advantage is limited supply, which gives them inherent value. But Yang warned that most average collectibles actually lose value over time even as stocks rise. He cited the example of the Beanie Baby craze of the 1990s deflating abruptly. Still, he sees gambling slightly on collectibles as generally a better bet than leaving your cash in the bank.

Owning a Business

Lastly, Yang likes using cash to help launch or fund businesses. He said that, unlike salaried employees, business owners can raise prices amid inflation, which protects their profit margins. Successful companies also grow value over time, meaning large future payoffs when sold one day. So while they can be risky, businesses also present almost unlimited long-term upside compared to holding idle cash.

The bottom line, according to Humphrey Yang, remains avoiding complacency. When you keep excess money in basic accounts, it’s vulnerable to losing its value over time. “Having too much cash in your bank account can actually erode your own wealth due to inflation,” he said. But by taking proactive control of your cash, you can stay ahead of the curve and come out on top.

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