Re: Question - Cash Flow from Savings 2 Investing
This is a tough question. As Jim mentioned, they have the tremendous luxury of time as far as retirement savings is concerned. $1,000 invested at age 18 and earning 8%/year will grow to over $42,000 at age 65. In contrast, if I put away that same $1,000 today at age 42, I'll only have $6,000 at age 65. For the same $1,000, the 18 year old ends up with 7 times more than me. That's a pretty powerful argument in favor of starting early for retirement.
On the other hand, buying a house is important too, though I honestly had no thoughts along those lines when I was 18 or 20. I was nearly 30 and married for almost 2 years when we bought our home. Until I knew where I was going to end up job-wise, I saw no point in buying a home. I was quite content to rent based on where I needed to be at the time. Since renting was much cheaper than owning, that also gave me the opportunity to save a lot of money and be able to make a 20% downpayment when we did buy a house. The high percentage of people today who buy with little to nothing down is disturbing.
Originally posted by LuxLiving
On the other hand, buying a house is important too, though I honestly had no thoughts along those lines when I was 18 or 20. I was nearly 30 and married for almost 2 years when we bought our home. Until I knew where I was going to end up job-wise, I saw no point in buying a home. I was quite content to rent based on where I needed to be at the time. Since renting was much cheaper than owning, that also gave me the opportunity to save a lot of money and be able to make a 20% downpayment when we did buy a house. The high percentage of people today who buy with little to nothing down is disturbing.
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