This Glasbergen cartoon explains why people — at least in America — don’t tend to save. The father says to the son,
Your grandmother sent you $5 for your birthday. Put it in the bank for a very long time and someday it will be worth $2.
That pretty much sums it up.
June 10, 2015
It does not quite work that way in just numbers. Notionally yes, but with compounded interest the investment could indeed become very substantial.
Your interest rates for savings account must be more than ours. Thanks to the Feds keeping the rates low, our bank pays 0.05% a year. That’s a lot less than inflation, which gets compounded too.
years and years ago… before i was married…
i worked at a savings and loan.
our savings account interest rate then earned 4 1/4 percent.
i save now. a little emergency fund.
but i don’t invest. i’m not that savvy nor affluent… and its complicated vernacular makes my head tired. 🙂
What a difference in interest rates between then and now! My sister plays the stock market and loves it, but Andy and I would rather spend our precious time doing other things. Clearly we agree with your choice. 🙂
I save anyway. It’s ingrained by my upbringing.
Love it.
We save too. My husband’s parents taught him that by investing for him starting when he was young. That illustrated compounding interest over a long time 🙂 But it’s a lot higher than a 0.05% rate…
Andy and I were both savers, but at 75 and 80 years old, we live within our means but don’t try to save more. It’s harvest time.
people want something now – they put it on the credit [whatever] – and pay, and pay and pay…. lots of interest% to a loan shark [bank, lender…]
oh they want it new as well…
That’s one thing we’ve almost never done. When we were first married we didn’t have a car for three years while we saved up to get one without having to borrow and pay interest. We did borrow money to buy the land, but we paid it off as soon as possible, even though it would have been financially advantageous to invest the extra money at a higher interest rate than we were being charged. We didn’t feel comfortable being in debt.
My sister has given me two refrigerator magnets that reflect my savings strategy. One reads
“I’m financial set, provided that I die tomorrow.” and the other one is a screaming skeleton face with the words “What was I saving my money for?!”
Actually, I think I should write a post about this myself.
I have some thoughts about it that is probably opposite of most people.
But right now, as it has always been, I’m robbing Peter to pay Paul.
Someday I hope to pay myself a bit too.
I would love to read your post on the subject. Andy’s Father used to preach, “10% of all you earn is yours to keep!” Being savers ourselves, we loved it.