The Accumulation Trap: Why You Must Keep Your Money Moving!

“I want my money to be like a river, not like a pond.”
– Lisa Sasevich, Inc. 500 business owner

Money TrapWe said in our last article, we’re tired of “investing” being equated with the stock market/ mutual funds! Wall Street is NOT the only option!

We’re equally tired of “wealth” being equated with ACCUMULATION. Accumulation does NOT equal wealth and prosperity!

Financial planning teaches us to “Accumulate first, then Disburse.” Save and invest to accumulate ample assets – generally in a 401(k) and other assets based largely in stocks and mutual funds. Then someday, when you accumulate “enough” money in your accounts, you can stop working, begin the distribution phase, and live off of your assets (or the interest your assets produce.)

In Busting the Retirement Lies, I detail why this thinking is so harmful and show other options. Today, I just want to look at one little piece of the formula: the idea that accumulating money should be our primary financial goal.

Accumulation is the goal of most investors. Everybody desires to have enough money, though there is much debate about how much is “enough.” People strive to accumulate an amount of money that means they will never have to worry about money again – or at least, they’ll never have to move in with their kids!

But we believe that the “Accumulate first, then Disburse” model is dangerously FLAWED.


First, because it relies on guesswork and speculation.

How do you know you’ll have “enough” money? Well, typical financial planning relies on solid mathematical formulas… using  numbers that are nothing but speculation, generalization, extrapolation, and GUESSWORK!

Do you see the problem!?

Secondly, because CASH FLOW is what we actually live on.

As a matter of fact, many people are AFRAID to spend their principle! We see this all the time – people accumulate many thousands, perhaps even millions of dollars, but are afraid to USE their own money!

You’ve heard it said that “It doesn’t matter how much you make, only how much you KEEP.” But the truth is, It doesn’t matter how much you make, how much you keep, or even how much you save – it only matters how much you can SPEND after you’ve earned it and saved it!

As we detailed in “Focus on Cash Flow to Build Prosperity,”  if the purpose of accumulation is to provide income in later years, why not concentrate on strategies most proven to generate cash flow? But typical financial planning TELLS us to accumulate the biggest possible pile of money – money that isn’t in our control and that we’re told not to spend!

So we work hard and throw a portion of our income into 401(k)s, IRAs, perhaps a taxable brokerage account, and a 529 plan or two. Accounts that can only be used for limited purposes at specific times. Accounts we can’t access without paying taxes, penalties, perhaps even fees.

Meanwhile, the financial institutions and even the government benefit from the accumulation. They leverage it, or tax it, or collect fees for sending us quarterly statements letting us know how “our” money is doing. They may even keep a portion of it when we die.

Third, accumulation isn’t an effective wealth-building strategy.

Dollar tapIt keeps money stuck, trapped, and inefficient.

What’s the alternative?


Move money THROUGH your assets, not just TO them!

Money is lot like water. It stagnates when it sits. It becomes unproductive, useless and goes to waste. You want to keep water moving and flowing!

Just as LIFE depends on the movement of water… evaporation, rain for crops, flowing rivers for fish, water for drinking and usage… so PROSPERITY depends on the movement of money.

You may be aware that consumer spending – movement of money – makes up the MAJORITY of our economy. But we’re not trained to move money in our personal economies, we’re taught to accumulate it and let it sit in various types of accounts, sometimes unused for decades!

Savvy business owners, corporations and bankers know how to keep money in motion. If banks acted the way we are taught to act, they would keep all of their deposits sitting in the vault unused! And they’d go out of business, unable to compete or turn much of a profit.

Of course, banks USE it, leverage it and multiply it, and generate enormous profits… much higher than what we imagine.

People think that when banks pay us 1% on our savings and allow us to borrow money at 4%, they are earning 3% on that transaction – 4% earnings subtract 1% cost. This is NOT correct. When a store owner buys a widget for $1.00 and sells it for $4.00, they are enjoying a 400% mark-up!

It is the same with banking. When the cost of attracting dollars is one-fourth the cost of loaning those dollars, banks are enjoying a 400% gain. (And that’s BEFORE they start creating money through the process of fractional reserve banking, which we’re NOT a fan of, but that’s another topic.)

Moving Money THROUGH Assets

Infinite Banking,  a concept popularized by author Nelson Nash, teaches us to move money through assets such as whole life insurance. Moving money increases its velocity and accelerates wealth-building.

Do you want to buy a rental property or invest in a business? By leveraging your own money for a down payment or a cash-flowing investment, you can actually increase your returns!

Will you need a car in two years? By saving the money in a cash value account then financing your own vehicle (either through the insurance company or through a bank, using the cash value as collateral), you get the car AND you get to keep your savings working for you, long after you pay back the car loan you make to yourself.

You can let money “sit” and accumulate in your cash value account and you will experience safe, steady, modest growth. But the secret to accelerating wealth-building? USE your money! Follow the example of how banks make money and move money THROUGH your accounts.

Find reliable investments where you can generate double-digit returns, pay off or avoid using high interest credit cards or equipment loans, put a down payment on a second home you can rent out when you’re not using it.

By using your money wisely – rather than just letting your banker or brokerage house use it – you can:

  1. Grow Your Asset Base. Use money from one asset to purchase another asset.
  2. Increase Your Cash Flow through Leverage. When you purchase a cash-flowing investment (perhaps a private mortgage contract, a cash-flowing investment property, even loan a family member money at 10% so they can pay off their 19% interest rate credit card), you increase your spendable cash flow.
  3. Build Wealth Safely and Soundly through Diversification. You can diversify away from the dollar into assets that will have value in any economy. Ownership, not accumulation, is the foundation for prosperity!
  4. Decrease Taxes. By moving money from regular income to capital gains, you can lower your taxes.
  5. Control Your Money. Prosperity is not measured by how much money you have, but by how much FREEDOM you have with your money.
Is YOUR Money In Motion?

Do you have money “sitting” in your savings account, whole life cash value account, or even under your mattress? If so, contact us to find out if you can put it to good use and accelerate your wealth and prosperity!

For more on keeping your money moving – MOVE is the 6th Prosperity Principle – See “Move Your Money to Accelerate Prosperity.”


Share this post


Begin your journey with the Prosperity Action Pack

Get immediate access to our short ebook Your Guide to Activating Prosperity, audio recording, our summary sheet about the 7 Principles of Prosperity™, and our subscriber-only Prosperity on Purpose Round-Up. 

Just fill out this form and get access now!

Get access to our free webinar today

Discover the first step to financial freedom


How much permanent benefit high cash/value dividend paying whole life am I entitled to?

Free Webinar! The first step to financial freedom.Get Access

pt image

Learn the First Step to Gain Financial Freedom

Enter your information to access the free webinar now.