Current Events > The SEC chairman thinks you can get 8% in a savings account.

(+) Yeah! (+)

https://twitter.com/GaryGensler/status/1440705940567719944

lmao.

---

Did this used to be true? I was taught 4% return in a high school class

All of the banks here give 1/10 of 1%. 40x less

---

give me 8% return every year year over year and i'd be okay

---

He never mentions savings account - he says save $5/week and gain 8% return (the historical average return from stock market) and you can see the effects of it compounding.

$5/week in a 401k and you're following his advice (which is the same advice every young person gets)

---

I'm getting 2% in a PenFed account. Where can I get 8?

---

shockthemonkey posted...

Id cry tears of joy if I could get 8% on a 5 year CD.

This, that's a great deal. I'd throw money into that.

---

Cokewave posted...

He never mentions savings account - he says save $5/week and gain 8% return (the historical average return from stock market) and you can see the effects of it compounding.

$5/week in a 401k and you're following his advice (which is the same advice every young person gets)

Putting your money in the stock market isnt saving it. That is called investing it.

---

He didn't say the words "Savings account".

He was probably thinking about some kind of market-related fund, like a 401(k). I suppose we can't know for sure unless he clarifies.
---

BlueTigerLion posted...

Putting your money in the stock market isnt saving it. That is called investing it.

I mean you can argue over the semantics of words, but that is exactly what he is referring to.

---

BlueTigerLion posted...

Putting your money in the stock market isnt saving it. That is called investing it.

Common personal finance advice is that you should "save" 15-20% of your income for retirement. It would be very silly if that meant putting 15-20% in a savings account. Although common personal finance advice is to also have some safe liquid money in an account like that too. What he's saying is very ordinary vernacular here.

---

He also said "maybe 8%", which in other words he's saying if you invested in an S&P 500 fund until retirement.

Bad topic.

---

8%?

The best I can even find online are .4-.6%

The best.

Cokewave posted...

He never mentions savings account - he says save $5/week and gain 8% return (the historical average return from stock market) and you can see the effects of it compounding.

$5/week in a 401k and you're following his advice (which is the same advice every young person gets)

He says savings and at least implies a savings account.

---

T-mobile money gives the highest savings account APY in the country iirc

4% on upto $3k (for t-mobile customers), 1% on everything else for anyone

After that it would probably be Zynlo money market at 0.8% APY, not available in all 50 states though

---

Where the fuck does he think a college student is going to earn 8% on his savings? If he was encouraging DeFi via lending (the equivalent to a saving's account), then sure, spread the good word, but he's not and the SEC is trying to regulate the heck out of the crypto market. On top of that, students are going to be concerned with getting a job and paying off student loans.

Cokewave posted...

I mean you can argue over the semantics of words, but that is exactly what he is referring to.

If he meant investing he would have said investing unless he's being deliberately disingenuous. Investing and saving are fundamentally different. Investing implies a magnitude of risk higher than savings and is affected by market conditions.

---

Sad_Face posted...

Where the fuck does he think a college student is going to earn 8% on his savings? If he was encouraging DeFi via lending (the equivalent to a saving's account), then sure, spread the good word, but he's not and the SEC is trying to regulate the heck out of the crypto market. On top of that, students are going to be concerned with getting a job and paying off student loans.

If he meant investing he would have said investing unless he's being deliberately disingenuous. Investing and saving are fundamentally different. Investing implies a magnitude of risk higher than savings and is affected by market conditions.

You can save in an investing account. This is how most people in America save for retirement. I assume you've heard the term "save for retirement" before. It doesn't mean put it in a savings account. This is very, very ordinary language to use in personal finance.

The fact that he used the number 8% makes it clear too, because 7% or 8% is very often used as a conservative estimate of annual stock market returns.

---

He didn't say a savings account.

Enjoy this bad token.

---

OrangeWizard posted...

He didn't say the words "Savings account".

He was probably thinking about some kind of market-related fund, like a 401(k). I suppose we can't know for sure unless he clarifies.

Is it realistic for a freshman college student to have access to a 401k?

Ruvan22 posted...

Is it realistic for a freshman college student to have access to a 401k?

I think a 401k is tied to a job, but an IRA yes absolutely.

---

He didn't say savings account. There are things you can do with your money to get an 8% return.

---

Ruvan22 posted...

Is it realistic for a freshman college student to have access to a 401k?

OrangeWizard was wrong to say "a market-related fund, like a 401(k)", but the point is kind of right. A 401k is just a place to invest which usually offer broad market funds. But if you invested in a market fund in any account it'd be all the same and you'd get the same 8% return whether it's invested in a 401k (which most college students wouldn't have access to), or an IRA (which any college student with a job has access to), or a taxable brokerage (which anyone has access to). The only major difference is just that the 8% returns would be taxed less in the first two.

Either way excess savings should be invested. Speaking personally, I've wished a lot that I spent a few hours learning basic finance in college instead of just piling it all up in my bank account for years. The growth would've put me a few steps ahead, but saving it at all is still good. The whole point of the video though seems to be just remarking how powerful compound growth is, which is very true.

---

Now that's what an SEC education will get you

---

Probably nervous that the peasants are going to stop investing after the robin hood fiasco.
Need to keep bleeding the little people.
Gary can go fuck himself.

shockthemonkey posted...

Id cry tears of joy if I could get 8% on a 5 year CD.

LOL, 5 years? You might as well put your investments into high yield bonds then or futures like gold. You could potentially profit A LOT more than a measly 8 fucking percent. Even if you put your money into a diversified portfolio with strong company fundamentals, you'll have a better chance of getting more return in 5 years.

Cokewave posted...

He never mentions savings account - he says save $5/week and gain 8% return (the historical average return from stock market) and you can see the effects of it compounding.

$5/week in a 401k and you're following his advice (which is the same advice every young person gets)

---

Damn_Underscore posted...

I think a 401k is tied to a job, but an IRA yes absolutely.

Do most IRAs have 8 % return?

Sad_Face posted...

Where the fuck does he think a college student is going to earn 8% on his savings? If he was encouraging DeFi via lending (the equivalent to a saving's account), then sure, spread the good word, but he's not and the SEC is trying to regulate the heck out of the crypto market. On top of that, students are going to be concerned with getting a job and paying off student loans.

If he meant investing he would have said investing unless he's being deliberately disingenuous. Investing and saving are fundamentally different. Investing implies a magnitude of risk higher than savings and is affected by market conditions.

Lol you are making up semantic bullshit to find a reason to be mad about nothing

You can invest savings
They are *not* fundamentally different, they just have different risk/return profiles
Thats not even remotely controversial
And obviousy the head of the SEC knows that savings account rates arent 8%
---

Ruvan22 posted...

Do most IRAs have 8 % return?

Straight up government bonds have an average return of 6% and they're considered a "bad" investment.

---

Kuuko posted...

OrangeWizard was wrong to say "a market-related fund, like a 401(k)", but the point is kind of right. A 401k is just a place to invest which usually offer broad market funds. But if you invested in a market fund in any account it'd be all the same and you'd get the same 8% return whether it's invested in a 401k (which most college students wouldn't have access to), or an IRA (which any college student with a job has access to), or a taxable brokerage (which anyone has access to). The only major difference is just that the 8% returns would be taxed less in the first two.

Either way excess savings should be invested. Speaking personally, I've wished a lot that I spent a few hours learning basic finance in college instead of just piling it all up in my bank account for years. The growth would've put me a few steps ahead, but saving it at all is still good. The whole point of the video though seems to be just remarking how powerful compound growth is, which is very true.

Agree on the distinction but I'm still not sure that the average IRA has an 8 % return rate? Been a while since I looked at them...

Tyranthraxus posted...

Straight up government bonds have an average return of 6% and they're considered a "bad" investment.

Interesting hadn't kept track of bond rates recently

you can get 10% a month if you know what you're doing

---

Ruvan22 posted...

Do most IRAs have 8 % return?

Ones that are invested in primarily equities/based off one of the major indices, yes
---

Tyranthraxus posted...

Straight up government bonds have an average return of 6% and they're considered a "bad" investment.

Uh not US govt bonds
---

g980 posted...

Uh not US govt bonds

Yes US bonds.

Well not if Bitch McTurtle defaults the debt but assuming that doesn't actually happen bonds are expected to have a 6% return.

---

NeoShadowhen posted...

Probably nervous that the peasants are going to stop investing after the robin hood fiasco.
Need to keep bleeding the little people.
Gary can go fuck himself.

...how else should people who arent wealthy save enough for retirement?

Consumer access to the stock market is one of the best things about capitalism
---

Tyranthraxus posted...

Yes US bonds.

Well not if Bitch McTurtle defaults the debt but assuming that doesn't actually happen bonds are expected to have a 6% return.

I jumped to coupon rate, not overall returns, and i was wrong

@Tyranthraxus
---

Kuuko posted...

You can save in an investing account. This is how most people in America save for retirement. I assume you've heard the term "save for retirement" before. It doesn't mean put it in a savings account. This is very, very ordinary language to use in personal finance.

The fact that he used the number 8% makes it clear too, because 7% or 8% is very often used as a conservative estimate of annual stock market returns.

No it's not. Again, investments and savings are fundamentally different by the virtue of risk factors and market conditions being a major factor. This isn't semantics. I dumped my savings in crypto but my crypto portfolio is not my savings. It's an investment.

And he knows his target audience, college students, will mainly be thinking of savings accounts when he brought it up. He's deliberately being obtuse and misleading.

---

Sad_Face posted...

No it's not. Again, investments and savings are fundamentally different by the virtue of risk factors and market conditions being a major factor. This isn't semantics. I dumped my savings in crypto but my crypto portfolio is not my savings. It's an investment.

And he knows his target audience, college students, will mainly be thinking of savings accounts when he brought it up. He's deliberately being obtuse and misleading.

It is. Have you or haven't you heard the phrase "save for retirement"? If you have, you should know you don't save for retirement by using a savings account. Most Americans save for retirement by investing (in their 401k or otherwise). I'm trying to use an example here to make it abundantly clear.

Go read some personal finance books and you'll see the term "save" used this way very often.

---

Yikes dude find something productive to do instead of crying about semantics over a Twitter video

---

you can get at least 15% from polygon stablecoin liquidity mining

legacy finance has no idea what they're in for

---

Your current options are:

Put your money in a savings account and watch inflation erode it away.

Put your money in bonds and watch inflation erode it away slightly less quickly.

Put your money in real esta- (nevermind, you don't have enough money for that thanks to permanently low interest rates)

Put your money in a stock market reaching all-time highs propped up by QE bubble money from the Fed.

Absolute clown economy.

---

Cokewave posted...

He never mentions savings account - he says save $5/week and gain 8% return (the historical average return from stock market) and you can see the effects of it compounding.

$5/week in a 401k and you're following his advice (which is the same advice every young person gets)

---

Here's a rough rundown of how your "savings" should be:

liquid: checking
ohshit: savings
retirement: 401k/IRA
investment: stocks/bonds/forex/etc.
paranoid: gold

Gold is actually a terrible investment. It never gains value, but money just collapses around it instead. It simply stores the value your money had at the moment you bought the gold.

Kuuko posted...

It is. Have you or haven't you heard the phrase "save for retirement"? If you have, you should know you don't save for retirement by using a savings account. Most Americans save for retirement by investing (in their 401k or otherwise). I'm trying to use an example here to make it abundantly clear.

This right here is what I'm talking about. Saving and investing are different. Yes, one influences the other but they're not the same. You invest to grow your wealth. You have to find an investment strategy but it's not savings. You don't inherently get an 8% APY on your savings account and this is the knowledge, "just save X% of your paycheques", the target audience is thinking of. It was a poor choice of words, he should have said learn to invest.

SK8T3R215 posted...

Yikes dude find something productive to do instead of crying about semantics over a Twitter video

Realize the financial world thrives on being misleading and obtuse and convolutes information to raise the barrier to entry.

---

Log off and go outside.

---

Sad_Face posted...

This right here is what I'm talking about. Saving and investing are different. Yes, one influences the other but they're not the same. You invest to grow your wealth. You have to find an investment strategy but it's not savings. You don't inherently get an 8% APY on your savings account and this is the knowledge, "just save X% of your paycheques", the target audience is thinking of. It was a poor choice of words, he should have said learn to invest.

Realize the financial world thrives on being misleading and obtuse and convolutes information to raise the barrier to entry.

Again, I'm surprised but I find myself completely agreeing with you. Especially when talking to 18 year olds, language is important as you *can't* assume prior knowledge.

Sad_Face posted...

This right here is what I'm talking about. Saving and investing are different. Yes, one influences the other but they're not the same. You invest to grow your wealth. You have to find an investment strategy but it's not savings. You don't inherently get an 8% APY on your savings account and this is the knowledge, "just save X% of your paycheques", the target audience is thinking of. It was a poor choice of words, he should have said learn to invest.

Realize the financial world thrives on being misleading and obtuse and convolutes information to raise the barrier to entry.

You have no idea what you're talking about. Most people's retirements savings are in 401ks, which are inherently investments (in stocks or bonds). I'm having trouble following what you're really trying to say but it sounds like you're thinking people invest, grow money, and then move it to a savings account and that's when it's officially "saved money". But that's not true and also not how any 401k's work. I'm only using retirement accounts as an example because I'm assuming you've heard people talking about saving for retirement a million times and hopefully you know how that's not done using savings accounts. But the concept is the same in any investment account. Savings can be, and for most Americans in fact are, investments. Just because someone could decide to risk all their savings in volatile shit like crypto or gamestop doesn't mean investments can't be savings.

Please read a personal finance book and you'll see this is a very, very common way of speaking about finances. If you feel misled then maybe that is a point against the video though because it's possible college students watching might be as clueless about it as you.

---

Kuuko posted...

Savings can be, and for most Americans in fact are, investments.

Well, I mean, if you're attempting to invest money that isn't "extra", you're just heading for disaster.

Questionmarktarius posted...

Well, I mean, if you're attempting to invest money that isn't "extra", you're just heading for disaster.

Investments aren't what you see CEmen doing in the stock and crypto topics lol. That's called gambling.

---

Questionmarktarius posted...

Well, I mean, if you're attempting to invest money that isn't "extra", you're just heading for disaster.

You are right of course. 100% of someone's spare wealth should not be invested. 100% of someone's savings being in a savings account would also be a disaster for retirement. Your rundown was completely true.

---