Gensler's saving advice spurs backlash from crypto bulls
Crypto bulls react to Gary Gensler's recent saving advice to college students.
Video transcript
[THEME MUSIC]
ZACK GUZMAN: Welcome back. In today's hot takes, a tough go for SEC Chair Gary Gensler on social media after he was posting a video for savings advice for college students out there. Taking a look at how much they could save for retirement if they get started early, assuming an interest rate though that may have irked crypto Twitter just a bit. Take a listen to his advice.
GARY GENSLER: If you were to save $5 a week, and you earned maybe 8% starting off while you're at college, you may have $130,000 plus saved by the time of retirement at 65. Just from $5 a week. But if instead, you waited until, let's say, you're 40 years old to start saving, to get to the same numbers you'd need about $30 a week.
ZACK GUZMAN: Now Akiko, of course, that message was immediately met with a very tough ratio. A lot of comments coming from crypto Twitter specifically around the timeline, of course, that the SEC just shut down Coinbase's plans to roll out their lending platform that would have offered 4% on the USDC stablecoin. We've seen other lenders offering 8% like BlockFi on stablecoins. So that 8% really hit a nerve, I think, because a lot of people are pointing out the average interest rate right now in bank accounts across the US is 0.06%. So assuming that 8% really had a lot of people trolling the SEC chair on Twitter.
AKIKO FUJITA: I will say, Zack-- I'm not sure if I'm allowed to say this on a financial network, but I was not thinking about savings in college. So what I have learned from this-- and you're right that the timing of this certainly not good at a time when there is debate. And we've been talking about this a lot, about what they did with Coinbase, and that 4% yield, and the product they initially had proposed, so that's not a good look.
But I'm surprised at how many people are actually thinking about savings. That, to me, was a revelation because I was certainly not thinking about what percentage the yield would be on any kind of savings account when I was in college, and I was just spending money.
ZACK GUZMAN: Yeah. I guess that's the position he took on here was like, look, I don't want to talk about spending. We'll talk about savings instead. But either way, just a quick kind of rebuke coming from the crypto community around the timing of a message like that. The ratio was not good. That's the term on Twitter, Akiko, when you start to see those comments piling up-- as you know, I know, everyone who uses social media knows-- but it was pretty rough. It was about 5 to 1, I think, likes to comments on that one.
But it's one of those things where you could assume 8%. And it's not bad to assume when you think about S&P 500 returns and stocks. But just talking about putting in banks, obviously, far cry when you think about maybe how that would have been different years ago.
AKIKO FUJITA: It doesn't have to be crypto per se, right? I mean, I get why crypto Twitter responded. I completely understand that part, but you're right. I mean, I think any of our guests would argue that it's better to put it in the markets, in stocks, than just have it sitting when the yield is so low on a savings account when you go through a traditional bank.
ZACK GUZMAN: And that's why it's been interesting to see how the younger generation maybe plans around this at a time where you got people on our air talking about an allocation between stocks and bonds. But at the same time, you got other people saying bonds are completely worthless if you're only-- as you said, the yields are so low. What's even the point of putting it in the portfolio if you got so much time to save for retirement? That's the benefit if you're a younger saver out there. So it is interesting to see this generational divide around crypto, the advice around saving if you're assuming 8%, and how low interest rates are in the bank right now. But--
[INTERPOSING VOICES]
AKIKO FUJITA: Yeah, the expectations have shifted, right? You're right the expectations have completely shifted. If you can get more of a quick return, why sit around and just wait for that 0.6%?
ZACK GUZMAN: Yeah, if you can turn $1,000 into 50K in a year by plowing into Dogecoin, it's tough to really think about simple saving rules coming from the SEC chair here. But that's what Twitter had to say about it. We'll leave that there for now.
