$50 per month for thirty five years saved with no interest at all is $21k, so I can absolutely understand the point of view that it’s not worth it if you’re currently struggling to scrape by to wait 35 years for what might be just an extra $14k
If that $50 has literally no other use to you, then great, if that $50 can provide fair value for you now, it’s a much tougher decision.
I blew a lot of my money when i was younger, something I don’t regret spending lots of money on is decent tools, they can last a lifetime if taken care of and can save you money in the long run if you learn to do your own work. Sometimes stuff now is a better investment but it can be super specific depending on your situation.
I absolutely agree. I used to have no choice but to buy budget and have to deal with it when stuff inevitably failed and broke. But now I’m much more financially stable, I made a commitment to buy quality when I can, the old “buy once, cry once” mantra.
With clothes I’m in the best of both worlds. I’m a proper hawk for charity shops and if you’re patient you can get both budget and quality. I bought a £100 shirt for £3 the other day and it looked like it had never even been worn, there’s no reason it won’t last me decades if I look after it. Good riddance to TK MAXX and fast fashion. Charity shops are especially good for suits and smart shirts as a lot of men only get them out for interviews and weddings, meaning they are usually in great condition and can be bought at a tiny fraction of the original price, you just have to be patient waiting for ones that are the correct size for you.
Taking a step further, if the last thirty five years are any indication, that future $21k would be worth less than today’s $10k.
Besides, to overcome inflation, you’d need to average double digit returns on your investment every year for half a lifetime.
Like you say, it’s a tough decision if there’s anything that can provide you value now. Not to argue against savings, but expecting it to grow exponentially with no effort is folly.
To overcome inflation you need returns higher than inflation. That’s it. Historically the markets outperform inflation. You’re saying things out of fear and not reality.
Funny how a mistake in a single sentence earns vitriol on the entire comment.
Despite what I’d mistakenly wrote, I meant that to overcome inflation and see a return of double to quadruple your investment - which is what the comment starting this thread suggests as the outcome - you’d have to beat the market by around 10%.
Regardless, my point was more to do with whether someone with only $50 to spare a month is truly in a position to invest in anything or whether they might be better off saving it for a rainy day or something like that.
If someone has a few dollars to spare come month’s end, but has found themselves skipping the odd meal, that money would probably be better spent on a small grocery trip than putting it into an ETF that’ll take years to turn a profit.
Regardless, my point was more to do with whether someone with only $50 to spare a month is truly in a position to invest in anything or whether they might be better off saving it for a rainy day or something like that.
True enough, but short-term or non-locked-in investments are available to most people.
If OP doesn’t have the starting funds to buy an investment vehicle of some sort, then they could put it into a zero-fee savings account and vigorously ignore it. This is, in fact, your rainy day fund.
Then when they have scrounged up the appropriate amount (likely $500 or $1k), they can buy a guaranteed investment certificate or the like, and get better interest rates while they continue to put money into their account.
When the term is up, they can buy a bigger one with their new savings. This way, they have both an emergency fund, and the starting point for a life of investing towards retirement, if nothing else.
(Of course your later point - if they’re struggling to eat - is still true as well.)
$50 per month for thirty five years saved with no interest at all is $21k, so I can absolutely understand the point of view that it’s not worth it if you’re currently struggling to scrape by to wait 35 years for what might be just an extra $14k
If that $50 has literally no other use to you, then great, if that $50 can provide fair value for you now, it’s a much tougher decision.
I blew a lot of my money when i was younger, something I don’t regret spending lots of money on is decent tools, they can last a lifetime if taken care of and can save you money in the long run if you learn to do your own work. Sometimes stuff now is a better investment but it can be super specific depending on your situation.
I absolutely agree. I used to have no choice but to buy budget and have to deal with it when stuff inevitably failed and broke. But now I’m much more financially stable, I made a commitment to buy quality when I can, the old “buy once, cry once” mantra.
With clothes I’m in the best of both worlds. I’m a proper hawk for charity shops and if you’re patient you can get both budget and quality. I bought a £100 shirt for £3 the other day and it looked like it had never even been worn, there’s no reason it won’t last me decades if I look after it. Good riddance to TK MAXX and fast fashion. Charity shops are especially good for suits and smart shirts as a lot of men only get them out for interviews and weddings, meaning they are usually in great condition and can be bought at a tiny fraction of the original price, you just have to be patient waiting for ones that are the correct size for you.
Taking a step further, if the last thirty five years are any indication, that future $21k would be worth less than today’s $10k.
Besides, to overcome inflation, you’d need to average double digit returns on your investment every year for half a lifetime.
Like you say, it’s a tough decision if there’s anything that can provide you value now. Not to argue against savings, but expecting it to grow exponentially with no effort is folly.
To overcome inflation you need returns higher than inflation. That’s it. Historically the markets outperform inflation. You’re saying things out of fear and not reality.
Funny how a mistake in a single sentence earns vitriol on the entire comment.
Despite what I’d mistakenly wrote, I meant that to overcome inflation and see a return of double to quadruple your investment - which is what the comment starting this thread suggests as the outcome - you’d have to beat the market by around 10%.
Regardless, my point was more to do with whether someone with only $50 to spare a month is truly in a position to invest in anything or whether they might be better off saving it for a rainy day or something like that.
If someone has a few dollars to spare come month’s end, but has found themselves skipping the odd meal, that money would probably be better spent on a small grocery trip than putting it into an ETF that’ll take years to turn a profit.
True enough, but short-term or non-locked-in investments are available to most people.
If OP doesn’t have the starting funds to buy an investment vehicle of some sort, then they could put it into a zero-fee savings account and vigorously ignore it. This is, in fact, your rainy day fund.
Then when they have scrounged up the appropriate amount (likely $500 or $1k), they can buy a guaranteed investment certificate or the like, and get better interest rates while they continue to put money into their account.
When the term is up, they can buy a bigger one with their new savings. This way, they have both an emergency fund, and the starting point for a life of investing towards retirement, if nothing else.
(Of course your later point - if they’re struggling to eat - is still true as well.)