Oversaving (is That Even a Thing?)

stuffed-piggy-bankAre you saving too much money? First of all, for many folks, that seems like such a ridiculous question in the first place. Many folks aren’t saving at all and many more aren’t saving enough; but saving too much? Is that really a thing?

I absolutely think so. Saving shouldn’t just be something that you do– it should be something that you do with purpose. Like I’ve said countless times in regards to our financial lives, it’s important to have a plan. That includes how and why we are saving. Continue reading

Compound Interest

compound_interestLast week’s post and the three questions in it have me thinking about a principle that’s worth devoting a little bit of time to. I want to talk about compound interest. Often, when I am counseling people and I breach the topics of either retirement or investing, I ask if the member knows what compound interest is. Also often, they don’t.

Einstein is quoted (perhaps fictitiously) as having said, “Compound interest is the greatest invention in human history.” He is also quoted (also perhaps fictitiously) as having answered, “Compound interest,” when asked the question, “What’s the most powerful force in the universe?” Whether Einstein actually said this stuff or not is up for debate; whether compound interest is an amazing thing or not isn’t. Compound interest is amazing. Understanding compound interest is a key component of financial literacy, because it’s something that can work greatly for you– but it can also work against you, if you don’t understand the concept. So, let’s talk about what compound interest is, why you should fall madly in love with it, and how to make it work for you.

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