The Importance of Saving There are many things to consider when saving for the future. The most fundamental factors are to save early and save more. No one can control interest rates or accurately predict what will happen in the stock market. The two things you can control are when you start and how much you save. The accumulations shown above assume an earnings rate of 5%. Starting to save early puts time on your side. Your savings will add up and the longer your funds are working, the longer the power of compound interest will work in your favor. You earn on what you have saved and you earn on what you have already earned. Consider the Rule of 72 – the value of money about doubles when the interest rate times the number of years equals 72. An initial value doubles in 12 years if you earn 6% and doubles in about 14 ½ years if you earn 5%.
Posted on: Fri, 14 Mar 2014 03:13:21 +0000
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