Building your freedom fund (your retirement plan) is key and one many new millennials feel to grasp and understand the importance of putting your money to work for you. With items such as medicare, social security and pensions most likely a thing of the past (which they are still paying for) It is easy to see why so many millennials just don’t care to save. However it is a key importance to understand what a huge impact this can have on your retirement and how you actually have more control than ever to plan your future success!
Interest rates where at all time lows which is another reason why many felt trying to save money was just a waste. Your meager 0.05% savings per year translated into no income at all and you were actually losing your buying power by about 2% due to inflation.
However within the last few months we have seen interest rates start to climb which makes a CD of savings account that is FDIC insured a promising safe place to put money and make some return. To view the highest paying savings accounts I recommend checking out http://bankrate.com
Why is it so important to start saving money right now today after reading this message? The simple fact of compounding interest. Depending on the bank you interest is either compounded monthly or daily. This means if you earn $100 in interest last month that is now compounded and earning you interest for the next month. At a rate of 1.40% at the current highest paying savings bank I could find this results in $1.40 (yeah not much right however that also converts into 2 more cents a month which also gets compounded. This is only your first month and as it continues to build over the next 5 -10-30 years till you retire you could be sitting on a few million to retire on or if interest rates keep rising to where they once were about 3% your $250,000 savings now earns you $625 a month! Not too shabby right?!
This money could be used towards monthly expenses or even to continue to save and compound earning you more and more as you continue forward in your life. The sooner you can retire on your freedom fund the better and those steps start right here right now.
thanks for sharing
Haha, come on man, this is old school :-). Get your pension with crypto's
Crypto is very high risk and very volatile I wouldn't recommend it unless it is money people can afford to lose honestly.
Ok, i will honestly agree with that but a few % a year, it is just a joke, isnt'it? I hope blockchain will allow soon direct one 2 one loans where both investor and loan-taker will benefit and bl banks will dissapear. Investment is all about spreading portfolio where more risk is more possible reward, write something on that, will follow you and especially your progress :-)
Saving is good and works best for people who want to keep it save and maybe grow income gradually. But for aggressive investor, the motto is we "we trade it all or lose it all" and of course with good trading skills we double and make it all
Yes but the percent of people that are "good" or seem to think they are good at trading is very very low and honestly is based on some luck with as much good judgment as possible. No one can predict markets and anyone that says they can will most likely go up in flames at some point.
If your talking about normal trading in stocks then index funds are a good choice as you would be investing over many stocks and diversifying yourself. They have always proven to go up over time.
Yes, many people don't realize the power of compounding interest. That is why in my last post I discussed how everyone should track their net worth atleast semi-annual to actually see the progress.
Great point you can end up making a lot over the course of years when you start saving today.
We have negative interest rates and that will continue to prop up the financial system. Compound interest is a myth at this point. Sure, in nominal terms it may appear you are getting ahead but that's based on an underestimation of real inflation rates.
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So now savings accounts lose you less money! Wow, how awesome!😉
Or you lose more not by saving? Better of the two evils perhaps :)