This finance influencer once said middle-class Americans keep falling for 2 money traps laid out by the big banks. Here’s how to dodge them

Is Chan right? If so, how can you spring yourself from these traps and start building real wealth?

Trap 1: Low-interest savings accounts

Many middle-class Americans trust traditional savings accounts for security, but with their interest rates barely above zero, they do little to grow wealth. The national average personal savings rate is just 0.40% as of November 2025 (2) — far below inflation — meaning the value of your money is shrinking over time.

For example, $10,000 in a savings account earning 0.40% interest will net just $40 in a year, while inflation erodes its purchasing power by about $250. This slow leak can seriously impact your long-term financial goals.

To get started, a high-yield account, such as a Wealthfront Cash Account, can be a great place to grow your emergency funds, offering both competitive interest rates and easy access to your cash when you need it.

A Wealthfront Cash Account can provide a base variable APY of 3.30%, but new clients can get a 0.65% boost over their first three months for a total APY of 3.95% provided by program banks on your uninvested cash. That’s ten times the national deposit savings rate, according to the FDIC’s January report.

With no minimum balances or account fees, as well as 24/7 withdrawals and free domestic wire transfers, you can ensure your funds remain accessible at all times. Plus, Wealthfront Cash Account balances of up to $8 million are insured by the FDIC through program banks.

Another option is to invest in low-risk, higher-return vehicles such as certificates of deposit (CDs), money market accounts, or treasury bonds. These options often require locking in your money for a period of time, but the returns can be significantly better than any savings account.

When interest rates are moving, high-yield savings accounts can feel like a moving target. You might be earning a competitive APY one month, only to have your bank quietly lower it the next. That’s the trade-off with HYSAs: they’re flexible, but your returns may not be guaranteed.

With the Fed cutting interest rates recently, many savers are already seeing those yields drop. That makes locked-in returns more valuable than ever — and that’s where a certificate of deposit (CD) shines.

With a CD, you lock in a guaranteed rate upfront, so your earnings stay steady for a set term, even if rates slip further. It’s predictable, reliable growth, which is something you don’t always get with traditional accounts.

With platforms like Robinhood, you can invest in ETFs like the Vanguard S&P 500 to get a start on your nest egg.

Robinhood has 24/7 support, and you won’t pay any commission fees on stocks, ETFs and options. Their platform also offers both a traditional IRA and a Roth IRA, so you can benefit from tax-efficient retirement investing.

New Robinhood customers can also get a free stock once you sign up and link your bank account to the app.

You can pick your stock reward from top American companies, with amounts ranging from $5 to $200.

Trap 2: Failing to leverage debt

Debt has a bad rap for good reasons. But used wisely, it can be a powerful wealth-builder. The key, Chan believes, is knowing the difference between good debt and bad debt.

High-interest debt, like credit cards, drains your finances, while low-interest debt, like a mortgage, can help build equity in appreciating assets like real estate. To build wealth, avoid using debt to buy depreciating assets and always tackle bad debt before taking on more debt of any kind.

For anyone juggling high monthly balances, those interest charges can really be a strain on your monthly budget. If you want some breathing room, consider consolidating your high-interest credit card balances to a personal loan with a much lower rate.

Paying off high-interest debt as quickly as possible frees up cash flow and reduces the amount of money lost to interest payments over time.

A financial advisor can help crunch the numbers and build a plan that works.

But hiring an advisor can be a lifelong commitment, which might make or break your retirement. That’s why finding reliable advisors is crucial.

That’s where Advisor.com can come in. The platform connects you with an expert near you for free.

Advisor.com does the heavy lifting for you, vetting advisors based on track record, client ratios and regulatory background. Plus, their network comprises fiduciaries, who are legally required to act in your best interests.

Just enter a few details about your finances and goals, and Advisor.com’s AI-powered matching tool will connect you with a qualified expert best suited for your needs based on your unique financial goals and preferences.

Finding the right advisor isn’t always easy — there’s no one-size-fits-all solution. That’s why Advisor.com lets you set up a free initial consultation with no obligation to hire to see if they’re the right fit for you.

Once you’ve got the right financial advisor in your corner, the next step is getting a clear picture of where your money’s actually going. That starts with the basics — budgeting and tracking your spending.

For those with good credit, taking out debt strategically can accelerate wealth building. You can use lower-interest loans to invest in real estate, start a business, or fund income-generating ventures — but always weigh your risk tolerance and ensure the returns beat the cost of debt.

Another smart move? Make extra mortgage payments. Even small amounts can slash interest costs, speed up loan payoff, and boost your home equity, giving you more financial freedom.

Invest in real estate without taking on a mortgage

Using ‘good debt’ to your advantage in a smart investment is one way for Americans to secure their financial future. But there are some other creative ways to get into real estate using hard-earned savings, other than leveraging your FICO score.

If you’re more interested in the long term earning potential of short-term stays, you can get into this market for a mere $100 minimum. Real estate platform Arrived offers you access to shares of SEC-qualified investments in rental homes and vacation rentals, curated and vetted for their appreciation and income potential.

Backed by world class investors like Jeff Bezos, Arrived makes it easy to fit these properties into your investment portfolio regardless of your income level. Their flexible investment amounts and simplified process allows accredited and non-accredited investors to take advantage of this inflation-hedging asset class without any extra work on your part.

Another option is the Arrived Private Credit Fund, which invests in short-term loans for real estate projects such as renovations.