Personal savings account rates have been trending up in 2018, with rates getting as high as 2.05%. While that is certainly the highest return we have seen in 5 years, it also doesn't factor inflation. The United States Federal Reserve targets 2% for inflation, meaning that it will eat away nearly 98% of the returns in your personal savings account. Once you include inflation, … [Read more...] about How Inflation Eats Away Your Personal Savings Account
Budgeting & Savings
When You Budget a Car – Follow the 1/10th Rule
Cars are one of the poorest investments you can make. After 5 years, the average automobile will depreciate by over 60%, so keep that in mind when you budget for a car. Since the average price of a new car is roughly $35k, this means that the average new car buyer will lose $21k over 5 years. When you consider the opportunity cost, they would have had over $90k had the $35k … [Read more...] about When You Budget a Car – Follow the 1/10th Rule
Build A Budget with Opportunity Cost in Mind
It's important to know the future value of your savings when you build a budget. A simple way to keep this in mind is to know your opportunity cost of saving. What is Opportunity Cost? Opportunity cost is a key concept of economics, which represents the scarcity of choice. You only have so much time and money, and opportunity costs are the costs incurred by not enjoying … [Read more...] about Build A Budget with Opportunity Cost in Mind
Net Worth Formula From The Millionaire Next Door
People often wonder what their net worth should be. Some compare themselves to the average, while others have a magic number in their head. Once they hit that number, they know they are financially set. The best net worth formula is courtesy of the Millionaire Next Door. The Millionaire Next Door is a groundbreaking book which revealed that the pop culture view of … [Read more...] about Net Worth Formula From The Millionaire Next Door
Save Money Effectively With The Hierarchy of Savings
You have done a great job saving – now comes the hard part, how to save your money effectively. There are many vehicles to place your savings - including a standard brokerage account, 401k, IRA, or investing in assets such as real estate. To help you prioritize your investments, we put together a hierarchy of where to save your money in order. Our mindset is to minimize … [Read more...] about Save Money Effectively With The Hierarchy of Savings