Scott Galloway went on Mayim Bialik's podcast and assured Americans they can attain financial success by investing in 'forced savings vehicles' — here's what he meant
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Saving money can be hard, even when you know how important it is. But what if there was a simple, hands-off way to set yourself up for financial success?
New York University professor and financial expert Scott Galloway recently suggested one: forced savings.
Galloway was interviewed by Mayim Bialik of "Big Bang Theory" fame on her podcast "Breakdown," and he shared some financial advice with listeners. Specifically, he warned that you should be wary if you have an impulse to spend any money you have access to and instead "find forced savings vehicles."
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But what does that mean, and how could it help you improve your finances? Here's what you need to know.
How do you force yourself to save?
Galloway explained four common methods of forced savings that are pretty easy to use. As he explained, the U.S. economy runs on a consumption mindset and it’s really hard to fight. Many people can’t resist spending money on material possessions they think will make them happy.
However, you can set yourself up for financial success if you take those dollars away, removing the ability to spend, and instead putting your money into worthwhile assets.
Rounding up
Galloway advised signing up for a program through a bank or finance app that can round up your purchases and deposit the extra change into savings or investment accounts. So if you spend $5.50, your purchase would total $6, and you'd have $0.50 deposited into your savings/investment account automatically.
You can make the most of your spare change with Acorns.
Acorns is an automated investing app that transforms your everyday spending to savings. By simply linking your cards, a process that only takes a few minutes, Acorns will help effortlessly build a diversified investment portfolio, turning small change into significant growth over time.
With over 4.5 million users, and a 4.7 star rating on over 700,000 Amazon reviews, Acorns is a reliable way many Americans spend, save and invest all at the same time. Sign up today and get a $20 bonus investment.
Retirement accounts
Galloway suggested signing up to have money taken out of your paycheck and put into a tax-advantaged retirement plan — ideally, this would involve employer match contributions. If your employer takes the funds from your check before you receive it, you can't spend it.
Not all employers offer these types of retirement plans, but you can still benefit from retirement savings with an IRA. One tax-advantaged retirement account to consider is a gold IRA. With a gold IRA, you have the opportunity to diversify your portfolio and stabilize your finances — all while receiving enticing tax advantages that can help you grow your money in the long-run.
Gold has long been touted as a safe haven asset during market uncertainty. Amid persistent inflation, gold prices have reached new heights, now standing at around $2,338 per ounce.
One of the country’s most trusted precious metal companies — with an A+ rating from the Better Business Bureau — Rosland Capital has helped thousands of clients grow their retirement fund.
If you’re interested in whether this is the right investment for you, you can receive a free information guide to learn more.
Read more: Car insurance rates have spiked in the US to a stunning $2,150/year — but you can be smarter than that. Here's how you can save yourself as much as $820 annually in minutes (it's 100% free)
Real estate
"A house is forced savings because most people are worried about losing shelter — so they’ll find a way to make their mortgage payment," Galloway told Bialik. If you commit to a mortgage, each payment builds equity. In the end, you have a valuable asset.
However, with the average 30-year fixed mortgage interest rate hovering around 7%, more Americans are finding it increasingly difficult to afford mortgage payments. If high mortgage rates are making you feel priced out of the market, there are still ways to build wealth in real estate without buying property outright.
If you’re interested in owning a piece of a top-quality residential property in the U.S, Cityfunds makes it easy to break into the market in a city that you love.
Cityfunds is the only investment platform that provides direct access to a diversified portfolio of owner-occupied homes in the nation’s top cities, such as Austin, Dallas, Miami, Tampa, Denver, Phoenix and Nashville. As the home value appreciates, so does the value of your Cityfunds equity investment, alongside the homeowner.
With mortgage rates and real estate prices continuing to rise, renting has become the only option for many Americans. One way you can benefit from the rental market as an investor is through Arrived.
Backed by world class investors like Jeff Bezos, Arrived allows you to invest in shares of rental homes and vacation rentals, without taking on the responsibilities of property management. To get started is simple: browse through a curated selection of homes, each vetted for their appreciation and income potential, and choose the number of shares you want to buy.
You can start investing in real estate with as little as $100.
Set up your own forced savings program
While Galloway’s tips are worthwhile, not all Americans are in a financial position to lock their money away in long-term investment vehicles.
If you want to get aggressive with your forced savings, Moneywise has compiled a list of the Best High-Yield Savings Accounts of 2024 so you can have a streamlined look at which high-yield savings account is best for your growth over time.
Taking away the choice of whether to save or not could be a ticket to financial success. Create a status quo where building wealth is the default, and you may just find yourself sticking to it in the long-term.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
