Part 4/12:
Why? Because savings in bank accounts yield minimal or zero returns—sometimes less than inflation. Therefore, the money stored in banks continuously loses its value, making it an ineffective strategy for wealth creation.
Key Issues with the 10% Savings Rule:
Negligible interest: Banks typically pay less than 0.5% annual interest, which is often below inflation rates.
Inflation eats away: Even if you earn some interest, inflation often surpasses these returns, reducing your real wealth over time.
Retirement inadequacy: Saving 10% of your income might not be enough to retire comfortably, especially with decreasing expected stock market returns.