An article about "saving early"

[Tpoints]

I am not against saving money. But if you put aside the fact that 7% is nowhere to be earned, not without risk, and definitely not for 40 years.

Consider this :
Let me give you a real example: Say you have Sarah, who decides at 25 to save $1,000 a month. She does that for 10 years. And then she stops. Then you have Roger, who waits until he's 35, and he saves $1,000 a month for 30 years. They both earn 7 percent on their savings.

Now, 30 years after she stops contributing Sarah would have $1,262,089.05. But Roger, who would have put away three times as much as Sarah, would only have $1,133,529.44.

The reason Sarah only saved a third as much as Roger but ended up with more money is because she started earlier.
http://finance.yahoo.com/news/invest...154751502.html

Doesn't that mean, if Sarah paid off her house in 10 years, Roger paid 3x for his house after 40 years while Sarah can be wasting $1000 a month for the remaining 30 years? Obviously most people can't earn 7% on their savings, so how can you make this work to your advantage?

What in this country is a guaranteed fix rate other than CD, bonds, child support, and mortgage?

[erowe1]

Obviously most people can't earn 7% on their savings

I think that financial experts usually figure 7% is a good amount of growth to count on as an average over a long period of time for a portfolio that includes mutual funds, but that is still relatively low-risk.

[Tpoints]

I think that financial experts usually figure 7% is a good amount of growth to count on as an average over a long period of time for a portfolio that includes mutual funds, but that is still relatively low-risk.

is there a 20 or 30 year record to support that?

[bxm042]

I think that financial experts usually figure 7% is a good amount of growth to count on as an average over a long period of time for a portfolio that includes mutual funds, but that is still relatively low-risk.

This may have been true before the cash helicopters but most people nowadays don't have a safe 7%. If you invest wisely (ie, far far away from the dollar), you can still get that, but it requires extra work/thought.

Most people's savings (or what's left of it) will get raped in the coming collapse.

[Tpoints]

This may have been true before the cash helicopters but most people nowadays don't have a safe 7%. If you invest wisely (ie, far far away from the dollar), you can still get that, but it requires extra work/thought.

Most people's savings (or what's left of it) will get raped in the coming collapse.

exactly!

[Gumba of Liberty]

This may have been true before the cash helicopters but most people nowadays don't have a safe 7%. If you invest wisely (ie, far far away from the dollar), you can still get that, but it requires extra work/thought.

Most people's savings (or what's left of it) will get raped in the coming collapse.

Its called precious metals and you will make well over 7 percent.

[Tpoints]

Its called precious metals and you will make well over 7 percent.

Not without risk.

[Gumba of Liberty]

Not without risk.

The only risk is confiscation or physical theft. The Fed is the lender of last resort. The Feds are the spenders of last resort. It matters not if the public goes into a deep deflationary depression. Helicopter Ben will come to the rescue and the government will spend us into hyperinflation or enact price controls. Regardless, precious metals will protect purchasing power.

[erowe1]

is there a 20 or 30 year record to support that?

Yes. Absolutely. I doubt there have been any 20-year periods in the history of any American stock markets that they didn't average better than 7% a year.

As bxm said, mutual funds may or may not continue to be good investments. But historically, 7% has been a safe estimate for them.

[Tpoints]

The only risk is confiscation or physical theft. The Fed is the lender of last resort. The Feds are the spenders of last resort. It matters not if the public goes into a deep deflationary depression. Helicopter Ben will come to the rescue and the government will spend us into hyperinflation or enact price controls. Regardless, precious metals will protect purchasing power.

No, depreciation is just as much a risk, especially if you're investing year after year and waiting a 30 year time frame.