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The problem is by saving that one penny it only goes up about 3% a year so under current savings interest rates. Compare that to buy a stock for one penny, provided it goes up in value, it creates INSTANT interest. It compounds much more faster, this is why college graduates are expected to start their 401K in their first job. The more money put aside earlier, the more it will be at age 65 when it is tapped into. A savings account will guarantee a rate of return but it is smaller with less risk. To compare that to the stock market is apples to oranges because of the high risk, high return of Wall Street.
"Save a penny" does not mean "park the penny in a bank and let it rot there." Now I think you're being willfully obtuse. Saving a penny means "finding a way to not spend that penny so that you have that penny do work for you elsewhere." That is what this thread is about after all. People who make 10 million pennies per year or more and cannot for the life of them figure out how to spend less of them and invest more.
Ben Franklin did not insult his audience's intelligence when he wrote Poor Richard's. He became famous for his sayings because he held his audience in high esteem. Surely most of the people here are smart enough to realize that when the interest rate is close to the rate of inflation, no work is being done by the capital in question. Spending less is exactly the same as earning more. Save a penny.
My strategy is dead simple: assemble six or seven million pennies and invest them in many areas. I save my pennies. And then I turn them loose on the markets like a horde of Mongols savaging Asia.
"Save a penny" does not mean "park the penny in a bank and let it rot there." Now I think you're being willfully obtuse. Saving a penny means "finding a way to not spend that penny so that you have that penny do work for you elsewhere." That is what this thread is about after all. People who make 10 million pennies per year or more and cannot for the life of them figure out how to spend less of them and invest more.
Ben Franklin did not insult his audience's intelligence when he wrote Poor Richard's. He became famous for his sayings because he held his audience in high esteem. Surely most of the people here are smart enough to realize that when the interest rate is close to the rate of inflation, no work is being done by the capital in question. Spending less is exactly the same as earning more. Save a penny.
My strategy is dead simple: assemble six or seven million pennies and invest them in many areas. I save my pennies. And then I turn them loose on the markets like a horde of Mongols savaging Asia.
You aren't getting what I am saying though, several pennies (while getting to the six/seven million penny mark you mentioned) under your mattress don't do you any good at all, the bank does a little better however it does much more better invested into the stock market and growing that way. It is an opportunity cost by waiting until it is big enough to turn them loose. If you bought Apple stock in 1997 when NEXT was bought out and Steve Jobs returned and didn't sell it until Jobs died, you'd have a pretty penny and spent little compared to waiting until you had the six/seven million pennies to buy Apple in say 2003 when the iPod got huge driving the stock price up so you spent more for the same amount of stock.
Arrgh. I would shake you roughly by the shoulders if I was able. Where have I suggested that we let all these forlorn pennies rot under a mattress or in a bank account earning three percent? Where? Find it. The previous post compared all those pennies to a horde of Mongols savaging Asia. Does that sound REMOTELY like placing money in a mattress or in a bank account?
31 pages of this cockamamie thread and it's still the same garbage over and over. I submit that you have a fundamental misunderstanding of the definition of the word "save."
I think the point is everyones definition of save is different. We can all live in a tent and eat chef boyardee in k-mart clothes with no cell phones and no cable tv and save most of our income.
There is a balance between what each of us wants to spend vs save. That balance can be tilted by going about the end result in different ways.
I know really frugal people who re-use tea bags and re-use paper towels. But they cheerish those pennies so much they do not invest them for fear of losing a few.
My view is live a little , splurge on new tea bags, maybe a trip , invest the difference and you will be light years ahead
I think you're being willfully obtuse as well. And you could also spend some time having a look at the various ways the word "save" can be applied to life.
Being frugal is not contrary to investing like an evil genius. It is very complementary to investing like an evil genius. Why is it that this strawman who reuses teabags NEVER invests in your hypothetical scenario? Is that how you look at the people who live simply? That they are so concerned with the price of aluminum foil that they miss the chance to grow their money in an index fund?
Why not hold your audience in just a little higher esteem?
I think the point is everyones definition of save is different. We can all live in a tent and eat chef boyardee in k-mart clothes with no cell phones and no cable tv and save most of our income.
There is a balance between what each of us wants to spend vs save. That balance can be tilted by going about the end result in different ways.
I know really frugal people who re-use tea bags and re-use paper towels. But they cheerish those pennies so much they do not invest them for fear of losing a few.
My view is live a little , splurge on new tea bags, maybe a trip , invest the difference and you will be light years ahead
Quote:
Originally Posted by ScoopLV
I think you're being willfully obtuse as well. And you could also spend some time having a look at the various ways the word "save" can be applied to life.
Being frugal is not contrary to investing like an evil genius. It is very complementary to investing like an evil genius. Why is it that this strawman who reuses teabags NEVER invests in your hypothetical scenario? Is that how you look at the people who live simply? That they are so concerned with the price of aluminum foil that they miss the chance to grow their money in an index fund?
Why not hold your audience in just a little higher esteem?
How is this thread still going?
No secret: stocks historically offer better returns than conservative financial instruments; some people spend too much; sometimes you've got to spend and live a little. [/end of thread]
I think you're being willfully obtuse as well. And you could also spend some time having a look at the various ways the word "save" can be applied to life.
Being frugal is not contrary to investing like an evil genius. It is very complementary to investing like an evil genius. Why is it that this strawman who reuses teabags NEVER invests in your hypothetical scenario? Is that how you look at the people who live simply? That they are so concerned with the price of aluminum foil that they miss the chance to grow their money in an index fund?
Why not hold your audience in just a little higher esteem?
we judge by our own experiences with people and we call it as we see it.
aren't you doing just that by assuming folks who may spend more for things are wasting money they should be saving even though in reality they may be accumulating more money than those who live more frugally?
not only do we eat out almost all weekend but we have our groceries delivered and shop on line for them. our time has a big value to it. but I can tell you what we have managed to save has grown through our investments by leaps and bounds.
it is a balance between the lifestyle we want and what we want to save. I don't consider what we do wasting one dollar.
Why have you not looked into food co-ops already? I've mentioned them OFTEN in this thread. This keeps turning back to food. But there's a good reason for that. People are spending WAY, WAY, WAY, WAY, WAY too much on food. Why are people spending so much when better quality, lower prices and less hassle is just down the street?
Scoop, what are a couple of your favorite Las Vegas co-ops?
No secret: stocks historically offer better returns than conservative financial instruments; some people spend too much; sometimes you've got to spend and live a little. [/end of thread]
Some places don't have too many co-operatives in their area so they have to settle for Wal-Mart. Inner cities don't have that nor do suburbs (within a reasonable drive.) It's like when the smoking taxes went up in New York in the ninties, my father and uncle would goto the nearest reservation and buy cigarettes there because of no taxes but, they would spend an hour both ways and nearly 100 miles on gas (try doing that now with $3.00+ per gallon.) I'm all for this but it is a limited resources issue. If you don't have it, it is not an option. (I don't know if I have any or Houston-Dan has any by him.)
I did a quickie search, closest one to me seems to be in the city, of which I do NOT want to drive 1.25 to 1.5 hours one way, just to do, and also have to pay for parking. Any savings I'd get would likely be wiped out by those other expenses.
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