Saving vs. Investing vs. Surrendering

Has your saving really been a loss? Has your investing really been saving? Let’s find out. To start, here are my definitions…

Investing – the placing of assets to build wealth in a way where overall return can be maximized and risk minimized confidently, competently, and consistently.

Saving – the act of reducing spending in an effort to accumulate wealth.

Surrendering – the placing of money into a situation where you have little to no understanding of where your money actually went… and thus little or no control of what happens to it.

Building on that, my philosophy of wealth building contains 4 simple truths:

  1. Investing primarily in the stock market is only possible on a large scale (like Warren Buffett) or with nonpublic information. The latter is illegal and can result in imprisonment.
  2. In the current inflationary environment, saving US dollars results in a loss of wealth… even in a CD or money market fund.
  3. The average person’s investable assets are inside retirement accounts, such as IRAs or 401(k) plans.
  4. The average person cannot invest until they restructure their retirement accounts to have unrestricted investment options.

What you’ve called investing may have actually been saving and surrendering under my definitions.

Investing into a stock may be a matter of speculative investing, but investing into a mutual fund is more a matter of surrendering. The latter is what is most applicable to average Americans because 85% of IRA wealth is held in mutual funds.

Mutual Funds = Surrendering

Over time it has become increasingly apparent that it is difficult, at best, for an average person to truly understand where their “investment” money actually went. In the dot-com crash of 2000, it was discovered that many mutual funds were much more invested into internet technology stocks than previously disclosed. In 2003, it was discovered that several major mutual funds were taking part in illegal late trading. In 2007, it was discovered that many mutual funds were more heavily invested in subprime mortgages than previously disclosed. Fund managers who haven’t met their performance expectations are often faced with a difficult choice: lose their job or swing for the fences (invest their fund’s money radically differently than disclosed in an effort to “catch up”). Additionally, just type in “mutual fund scandal” into any search engine, and you can find 101 reasons why money placed into mutual funds is surrendered. In a recent Fortune article, even Warren Buffet laughs about how, on the extreme side, of things sometimes there are “…750,000 pages to read to understand one security.” On fund managers, he even comments, “When you start buying tranches of other instruments, nobody knows what they hell they’re doing. It’s ridiculous.” When asked “If big financial institutions don’t seem to know what’s in their portfolios, how will investors ever know when it’s safe?” Warren replies, “They can’t, they can’t.”

Saving = Loss of Wealth

If you save money and put it into a CD or money market fund that earns 3.5% in an inflationary environment of 11.5% annual currency debasement, you’re losing 8% per year.


Well, that’s what the rest of my writing is mostly about. But, Step Uno is to stop saving and stop surrendering.

Reader Interactions


  1. Like Buffett says, “Risk comes from not knowing what your doing.”

    In my mind giving money to other people who don’t know what they’re doing (mutual funds) is like compounding risk.

    It’s like asking an adolescent boy who doesn’t speak english to pack your parachute for you.

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