Why Your Money Won’t Grow Under Your Mattress

The following is a guest post from our friend John at Frugal Rules. If you are interested in guest posting at Club Thrifty, please see our guest posting guidelines.



Why Your Money Won't Grow Under Your MattressWelcome Club Thrifty readers! While Holly and Greg enjoy their resort vacation, they’re allowing me to share my musings on growing money with you. Let’s face it, not many of us want to put in 40-50 hour weeks forever; we want to be able to enjoy life as we get older. Whether that means you travel in retirement, volunteer or pick up new hobbies, many of us view retirement as a time to be able to enjoy the things we did not have the time for when we were younger.


Mind you, I am not espousing a retirement where you sit on your a$$ watching life go by and not being a productive member of society, but one that you get to enjoy the fruits of being able to choose what you want to do because you have become financially independent. That begs the question – how do I get to that place where financial independence is a tangible reality? Whatever your answer is, it is incredibly shortsighted to think you’re going to get there by burying your head and putting your cash under your mattress. The key to growing wealth is investing it and taking on some risk.


Pad Your Future

There is a common saying that goes, “Those who fail to plan, plan to fail.” This is ever true when it comes to growing wealth that lasts a lifetime and hopefully beyond. View this plan as you would using a map for a vacation. You won’t get to your destination without your map, and a plan is the same for saving for the future. As a part of my plan, I am investing in the stock market with hopes to build solid wealth as the years go on. Investing in the stock market is not fool-proof, nor is it free from risk, but being in the stock market (in some form or fashion) is vital to building wealth. If you’re not certain where to start investing, then the best choice might be some low-fee index funds or some solid dividend paying stocks. Either, in general, is a great way to get started at building wealth for the future. Unfortunately, your mattress offers very little in terms of wealth creation.


Spring Your Savings Into Action

The key to any plan to growing wealth almost certainly has to be time. Time is the greenhouse to your money’s growth. If you wait and wait, then you’re going to see the results and find your later years to be potentially more difficult because you HAVE to work as opposed to having the choice of whether or not you WANT to work. Don’t allow lack of massive funds to hold you back either. When it comes to saving for retirement, don’t make excuses. If you can only afford $50-100 per month to begin with, great, start with that and you’ll be amazed at how it works for you in the long run. That little bit invested now can reap good returns in the long run, plus it develops a discipline of saving and investing that will last a lifetime. Saving for retirement can be a daunting proposition, don’t let time passing you by make it even more difficult. The moral of the story is to start now!


Don’t Box Yourself In

Nearly as important as time in regards to your investment plan is being fully diversified. I know that your co-worker might have given you a “hot stock tip” and you decided to throw everything at it. However, I am sad to say that wealth creation generally does not happen in this way. The stock market is known for being temperamental (just look at the past few years). You can, to a certain extent, weather those storms by being fully diversified among asset types and classifications. If investing in the stock market is not your thing, then there are many other things, like real estate for example, that you can invest in that will further diversify your overall portfolio. Like it or not, your mattress is unable to offer you the growth you need; being appropriately diversified is a much sounder approach.


What are your thoughts? Have you been able to find that magic mattress yet, or do you have a plan for your wealth creation?




John is the founder of Frugal Rules, a finance blog that regularly discusses investing, budgeting, and frugal living. John is a father, husband, and veteran of the financial services industry who’s passionate about helping people find freedom through frugality. Follow him on Twitter.





  1. says

    I have a magic mattress that`s a special savings account for young people under the age of 34, who are saving to buy a house. It´s a 4.5% interest, and I get about 800 dollars back on my taxes each year, if I filled up the saving amount for one year; 3 600 dollars. So far I`ve managed to save about 13.000 dollars, while being a student. This is in Norway though;-)

  2. says

    What about those fancy Sleepmember mattresses? They cost so much you’d think they grew money! No, good points. I see people almost weekly who are over 70 and working full time. Many choose to because they enjoy it, and are pretty happy. Those who have to because of no retirement savings are pretty miserable and it takes about 30 seconds to tell the difference. It will be even harder for our generation, as I think social security will not be very helpful at all. I can only hope I’m doing the right things.

    • says

      Lol! I know Kim. My in-laws have one and I about choked when I heard the amount they spent, they could afford it though so it’s ok. I agree that it will be more difficult for our generation to enjoy “retirement” as the numbers do not point to good savings methods in general.

  3. says

    No magic mattress here sadly, I’m just working on a diversifying investments like everyone else.

    I imagine I will keep working into retirement, but only part-time doing what I love. It helps keep my mind active, the money is just a benefit of something I would otherwise enjoy.

    • says

      That’s great Alex! Diversification, when done appropriately is a great tool to help grow and weather ups and downs. I’ll probably look to do something part time as well in order to stay active and be a productive member of society.

  4. says

    No magic mattress, although the hens with golden eggs aren’t performing too bad. Buying 10 and getting 7 more two months later plus free omelets is kind of magic. But since I followed your advice about diversification and won’t be opening an egg empire, that is only part of the wealth growth!

  5. says

    They don’t sell magic mattresses? LOL :)

    Saving for retirement is so important! We have one more bill to pay off (working on it!), and then we are going to throw as much as possible to funding our retirement.

  6. says

    I have just began to focus on diversifying my assets and income to make sure that I continue to grow my net worth. I wish my wife would jump on board with me, but she doesn’t seem interested in any of it. It is like she sticks her money under the mattress.

  7. says

    For me retirement is going to be more of a 2 pronged approach. I’m saving through the normal retirement vehicles such as an IRA and 401k but I’m also build as side business right now that will also become a continual source of income as well. It’s this type of approach that you talk about John that I feel will bring a successful retirement without sitting around all day long and doing nothing. Great article John.

  8. says

    I have adopted a solid policy that simply states: “Money is best employed making more money.” My chosen investment route is dividend growth stocks. So far, this strategy has been beneficial for me.

    I’m currently working on sizing up local real estate as a potential investment. So far, things aren’t looking too good for becoming a landlord where I live. If real estate doesn’t pan out, then I’ll just move down the list of asset classes and start running some numbers on the next one.

  9. says

    I’d never trust a hot tip from a mate. The stock market has made fools out of many people over the years. Plan your own strategy and stick to it. I’m not against taking advice from those who know better, but not from my mate at work. Great post John.

  10. Justin@TheFrugalPath says

    No sorry John, I haven’t found that magic mattress yet either. I do plan on creating one of sorts though. I’ve got a business model that should allow me to make money while I sleep. So, hopefully in the next ten years I will be able to achieve this, though it will be a lot of work.

  11. says

    Nice post! If time is the main key to growing wealth, then rate of return on your investments has to rank a close second. $50-100/month invested at 10% rate of return will create a much bigger number over time than the same amount invested at 6%.

  12. says

    Any hot stock tip has already been digested by the market, so if you’ve heard about it through legal means then it’s already too late! Make sure you have some form of savings before investing, as well. Nothing worse than having to pull money out of investments if you could have avoided it.

    • says

      That’s just it…way too many people do not realize that. They think they have something on the “know” and will make money hand over fist. Having good savings is also vital before jumping into the market, great point!

  13. says

    Excellent post, John! You hit it right on the nose! You can’t expect financial freedom to just fall into your lap. You have to proactive and yes, you have to take a little risk. The days of stuffing money in mattresses or regular savings accounts are long gone. As you said, investing in the stock market isn’t fool proof or risk-free, but is your best way to grow money. You need to be smart and do your due diligence. And don’t be afraid to ask for help – with the caveat that just because someone has some fancy acronyms behind their name (and yes, I have them too) doesn’t mean that he or she is automatically the right person for you. Interview lots of people and find the one who listens back.

    • says

      Thanks Shannon! You bring up a great point about interviewing advisors and make sure that they’re the right fit for you. I have worked with way too many retail investors in the past who’re in a bad advisor relationship and it was costing them in fees as well as lack of confidence that they were in the right vehicles for their needs. It just takes some time to interview some people to make sure they’re who you should entrust your money to.

  14. says

    Asking questions are really fastidious thing if you are not understanding anything totally, however this piece of writing gives nice understanding

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