Cash stuffing is the act of saving cash over a period of time to grow wealth. Cash stuffing forces you to take a set amount of income and save it. The benefit of cash stuffing is that over time you save a ton of money. Investing funds from cash stuffing builds wealth significantly more than simple savings and it is easy to become a millionaire with this saving and investment strategy.
How Cash Stuffing Works
Cash stuffing works by making you save a set amount of money over days, weeks, months or years. You put a set amount of money in a jar or into your bank savings account and don’t spend it. As time progresses you slowly build your savings into a fortune.
Once you examine your budget and understand how much money you can save and not spend over your preferred timeframe, start acting on this habit immediately. Developing a strong routine of cash stuffing ensures that you hit your financial goals.
Decide Your Cash Stuffing Amount
Select a cash stuffing amount that is feasible for you to stick to over the long term. If you don’t have a lot of excess funds then simply choose a small amount to get started. As you grow in your career you may save more to increase your returns over the long term.
A recommended amount to cash stuff is 5% to 20% of your income. You want to save enough money that you accomplish your goals but not so much that you sacrifice your lifestyle or peace of mind.
Building the habit of cash stuffing ensures that you stick to a savings and investment method that is proven to generate significant returns over time.
Choose Your Cash Stuffing Period
Decide the period of time for which you want to cash stuff your income. This can be daily, weekly, monthly, or yearly. Most people find it easier to save a set amount daily or weekly. Some divert a set amount of income bi-weekly or when paychecks are distributed to make things simple.
Make sure your cash stuffing period is something that works for your budget and mindset. If you find it difficult to follow this method daily, try a weekly savings period. If its easier to move funds into your savings account or to cash stuff a jar for those that prefer a hard cash method, cash stuff on a weekly or bi-weekly basis.
Cash Stuffing Savings Plan
Save your predetermined cash amount in a jar or savings account over your preferred period. Cash stuffing at home lets you physically place money into a jar or container on a cadence you choose. This method works best over the daily or weekly period due to smaller amounts being handled which are easier to manage over shorter time periods.
If you have trouble sticking to your financial goals because you spend too easily from your bank account, or don’t have a lot of disposable income, then physically stuffing cash into a jar may work for you.
An alternate method to physically saving money is to route a percentage of funds into a savings account. This method works best with direct deposit income from your workplace business and when you are paid on a weekly or bi-weekly basis.
Most companies let you route funds to multiple bank accounts and divide your income distribution into multiple ratios. This method works best for most people because you never have to think about cash stuffing and it automates your savings strategy.
Cash Stuffing Investment Plan
The best approach to cash stuffing is to route your disposable income into a high yield savings account or brokerage investment account to minimize the effects of inflation which reduce your purchasing power over time.
Interest based income from high yield savings accounts protects your savings against inflation. Routing your funds into a high yield savings account is recommended for those that plan to save up to $30,000 because you will maintain your purchasing power but never grow your wealth from interest based income due to the average inflation rate of about 4% annually.
Interest based income from brokerage investment accounts allows you to earn income from your investments at a rate of 6% to 10% or more annually which means you beat inflation and your money works for you to grow your wealth.
Build Wealth with Cash Stuffing
A healthy balance of cash in a high yield savings account and the remainder invested long term in high yield investments from a brokerage account will drive exorbitant wealth over the long term.
Use an Investment Calculator to determine how much money you may earn over time to meet or exceed your financial goals.
Cash Stuffing Savings Results
Starting with $100 and saving $100 a week will generate $5,407 in savings over a year assuming a 4% rate of return from interest in a high yield savings account. Free interest income in this scenario is $207 annually since saving $100 over 52 weeks only generates $5,200 in savings.
Starting with $5,000 and saving $100 a week will generate $10,507 in savings over a year assuming a 4% rate of return from interest in a high yield savings account. Free interest income in this scenario is $307 annually since starting with an initial $5,000 balance and saving an additional $100 over 52 weeks only generates $10,200 in savings.
Cash Stuffing Investing Results
Starting with $10,000 and saving $100 a week will generate $15,711 in savings over a year assuming a 4% rate of return from interest in a high yield savings account.
Starting with another $10,000 in an investment account and investing $100 a week will generate $15,974 in investments over a year assuming a 6% rate of return from interest in a low risk investment portfolio.
This example assumes you start with $20,000 in initial funds and route $200 a week into both a high yield savings account and low risk investment account to generate a combined $1,285 ($511 from savings and $774 from investments) in free interest based income.
Cash Stuffing Long Term Results
The more money you save and invest the more money you will earn over time.
Assuming you start with $10,000 in a high yield savings account at a 4% interest rate and $10,000 in a typical low risk investment account at a 6% interest rate and invest $100 a week into each over a 30 year period, you will generate $334,602 in savings and $497,526 in investments for a combined $832,128 in wealth!
If you only cash stuffed into a jar and did not leverage the power of investment income from a high yield savings account or low risk brokerage investment account, your combined funds and additional savings over your cash stuffing period would amount to only $332,000.
By not cash stuffing you are missing out on an additional $500,128 in free interest based income!
Interest based income is the only way to beat inflation and have your money work for you which is what wealthy people do. Rich people don’t work they live off of interest income from their savings and investments, and cash stuffing is the best strategy to help you do this too.