The Real Secret: Velocity of Money
Saving feels safe — but it’s not making you rich.
For years, we’ve been told that saving is the key to financial success. “Spend less than you earn, stash the rest, and you’ll be fine.” The problem? In today’s world, that strategy barely keeps you afloat.
Think of money like a car. When it’s parked in a savings account, it’s safe… but it’s also going nowhere. Meanwhile, inflation, fees, and rising costs are quietly eating away at its value.
Wealth isn’t built by parking your money — it’s built by moving it with purpose. That’s where the concept of the velocity of money comes in.
This isn’t about risky speculation or chasing the next hot stock. It’s about learning how to make your money flow, not just sit — so it works harder and faster for you.
Why Saving Alone Fails
Let’s do some quick math.
If you park $10,000 in a “high-interest” savings account earning 4%, that’s $400 in a year. Sounds decent… until you factor in inflation at around 3%. That means your real gain is about $100 — and that’s before taxes.
Now imagine leaving it there for 10 years while prices climb, groceries double, and your rent or mortgage keeps creeping up. You didn’t lose money on paper, but your purchasing power shrank.
Meanwhile, banks never let your money sit still. They lend, reinvest, and redeploy it constantly. That’s how they grow while we settle for “safe.”
I’ve met people who’ve saved diligently for 20 years — and people who started investing just five years ago with the same income. The difference? The second group put their money to work. They reinvested dividends, bought rental suites, or started small side businesses that recycled profits into new opportunities.
The point isn’t to shame savers. It’s to remind you that safety without movement equals stagnation.
The Velocity of Money Explained
Here’s the simple version of what the wealthy understand:
Deploy → Recover → Reinvest → Repeat.
That’s the velocity of money. The faster your dollars complete this loop, the faster your wealth compounds.
Picture two people pushing something up a hill.
The “saver” is dragging a sled — every inch feels like effort.
The “investor” is spinning a flywheel — slow at first, then momentum takes over.
Your goal is to build that flywheel.
Here are 3 easy ways to start:
1. DRIP Your Dividends (Beginner-Friendly)
If you hold dividend-paying ETFs or stocks, turn on the Dividend Reinvestment Plan (DRIP). Instead of taking cash payouts, they automatically buy you more shares — which means next time, you earn dividends on those extra shares too. That’s velocity in action, no extra effort required.
2. Recycle Your RRSP Refund (Intermediate)
Every year, millions of Canadians get tax refunds from RRSP contributions — and then spend them. Instead, reinvest that refund. Put it toward debt, another contribution, or a TFSA. You’ve just turned one investment into two without earning a cent more.
3. Reuse Equity or Cash Flow (Advanced)
Bought a rental suite or made an investment that’s producing monthly cash flow? Use that income to fund your next asset. For example, a $700/month suite could cover a $700 TFSA investment. That’s recycling your profits instead of letting them sit idle.
Velocity isn’t about chasing huge returns — it’s about shortening the time between money out and money back in motion.
Time, Not Just Money, Is the Scarce Resource
Here’s what most people forget: every dollar that sits still loses speed — and time.
Inflation and lifestyle creep are running a race against your savings, and they’re faster than you think. Waiting until 65 to “finally enjoy” wealth doesn’t make sense anymore.
You don’t want a huge bank balance someday — you want cash flow systems that buy back your time as soon as possible.
When your money moves quickly and consistently, it creates freedom. Freedom to work less. Freedom to invest more confidently. Freedom to stop worrying about whether you’re “doing it right.”
That’s the true meaning of financial independence: when your dollars hustle harder than you do.
Conclusion
Don’t Let Your Money Parked
Saving builds stability — but velocity builds wealth.
You don’t need a finance degree or a six-figure salary to make this work. You just need to start.
Pick one small loop this month:
Turn on DRIP.
Reinvest your RRSP refund.
Use side income to fund your next investment.
Keep it simple, keep it consistent, and keep your money moving.
Because parked money doesn’t grow — it rusts.
Don’t let your money idle. Put it in motion and buy back your freedom faster.
Ready to take control of your finances—for real this time?
Want a step-by-step system to set this up?
Download your FREE copy of Your Financial Empowerment Starter Kit.
It will walk you through the habits and tools to start moving your money with purpose.
