Forget Willpower: The Smartest Wealth Strategy Is Forced Saving

A common answer to the question of the best way to build wealth is owning your own business. It’s a great answer, because when it works, it supercharges your income, gives you equity in something scalable, and offers control over your financial destiny. In fact, the richest Americans ($100M+) typically hold greater than 50% of their wealth in business equity.¹

But here’s an interesting counterargument: The most effective wealth-building tools for everyday people are not always the most lucrative; they are the ones that consistently work.

Owning a business might offer the highest ceiling for building wealth, but it comes with real risks and demands an enormous investment of time and energy. My sister is now in year four of her startup, Ellavate Wagon, and through countless conversations with her, I’ve seen firsthand the toll it can take. She underestimated the stress, burnout, and fatigue involved. 

While I hope that we can all explore an entrepreneurial endeavor at some point, the reality is this: for many people, long term wealth isn't built on risk-taking and upside potential. It's built on structure, discipline, and automation.

That’s why the tools that consistently build wealth (mortgages, pensions, auto-enrollment retirement plans) don’t rely on brilliance. They rely on consistency. And often, that consistency is only achieved because the system forces it.

These devices make you pay. You don’t get to “wait until the market is better” or skip a couple months to pay for a family vacation (guilty). You’re on the hook every single month. And strangely enough, that’s exactly why they’re successful at building wealth.

The Psychology of Forced Saving

Let’s start with a core behavioral finance truth: humans are not natural savers. We procrastinate, prioritize the present over the future, and hate giving up control.

That’s why behavioral economists love commitment devices: tools that lock you into a future behavior that you know is good for you, especially when your future self might flake. Mortgages and pension plans are prime examples of this. They strip away optionality, and in doing so, create consistency.

Building Wealth In the Background

Mortgages may not be the ultimate savings tool (after all, so much money is lost to interest payments); however, they sure are a steady way to save.
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Even though in the early years of a mortgage, most of your payment goes toward interest, the structure still creates a long-term store of wealth. Each monthly payment gradually builds equity, and over time that equity compounds. Most importantly, it happens automatically. You don’t have to make an active decision to save, it just happens in the background.

According to the Federal Reserve’s 2022 Survey of Consumer Finances, the median net worth of U.S. homeowners is $396,200, compared to just $10,400 for renters.¹

​There are many reasons for this gap: demographics, price appreciation, income differences, etc. However, one key factor behind the spread in net worth is the consistent, long-term buildup of home equity. It’s a clear example of how forced savings through ownership can outpace more flexible, self-directed approaches.

Pensions, on the other hand, particularly the old-school kind (like defined benefit plans or public-sector pensions), offer virtually zero control over how contributions are invested and often don’t let you touch the money until retirement. They are about as flexible as a cast-iron pan.

They do have a major advantage, however: people with fully vested defined benefit pensions often retire better off than those with complete freedom in 401(k)s. It’s not magic; these plans have the benefit of simply removing an employee’s choice to opt out. No temptation to skip contributions. No panic selling during a market crash. No paralyzing analysis about how to allocate. Just automated, locked-in wealth accumulation over a long period.

In fact, studies show that retirees with defined benefit pensions have significantly higher retirement income replacement rates (and are more likely to maintain their standard of living in retirement) than those relying solely on 401(k)s.²

One of the most authoritative analyses from the Center for Retirement Research (CRR) at Boston College examined actual replacement rates across households. Their findings revealed:

• Households with pensions achieved median replacement rates of approximately 79% for couples and 89% for single-person households.
• Households without pensions were far behind, with replacement rates of around 62% for couples and 63% for singles

That 15–25 percentage point gap illustrates the power of non-elective, automated contributions in achieving retirement readiness.

Why It Works: A Behavioral Framework

Both mortgages and pension systems create non-discretionary financial behaviors, so people have no choice but to stay the course. That consistency leads to real wealth.

Here's how these systems hack our brains:

Take the Principle, Leave the Product

I’m not advocating for anyone to stretch themselves thin with a mortgage, nor am I suggesting that a pension is the superior form of retirement investing.

The real takeaway is this: If saving is optional, it often doesn’t happen. The more you automate and obligate your savings, the more likely you are to build wealth.

Want to apply this without locking into a 30-year fixed mortgage or getting a job that offers a pension? It takes work but it’s well worth the effort.
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• Set up automatic retirement contributions that increase annually
• Use auto-transfers into savings or investment accounts each month
• Create disincentives for withdrawal (e.g., using CDs or separate bank accounts)
• Label your savings accounts with purpose (“Emergencies Only”, “Early Retirement Fund”, “Italy Trip 2027”)
• Save at the beginning of the month, not the end. Make saving your default, not your leftover.

Final Thought

Building wealth is as much about mastering our behavior as it is math. Mortgages and Pensions often work not because they’re financially superior, but because they’re behaviorally aligned with how people operate. They force consistency, which is more valuable than choice and optimization for most people.

If you want better results, build systems that force you to win.


More Reading:
When It Comes to Money, It Pays to Keep Things Simple
The Less I Know the Better: How Over-Monitoring Your Investments Sabotages Your Success
​The Subscription Trap​

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¹ Federal Reserve Board. (2023). Survey of Consumer Finances 2022. https://www.federalreserve.gov/publications/files/scf23.pdf

² Rutledge, M. S., Sanzenbacher, G. T., & Vitagliano, F. M. (2019). Do retirees want constant, increasing, or decreasing consumption? Center for Retirement Research at Boston College. ​https://crr.bc.edu/wp-content/uploads/2021/12/wp_2021-21.pdf

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