Search Results: earliest memory

I'm not talking about saver vs. spender types.

I've been doing some thinking lately. It turns out that social pressures (both negative and positive) seem to be engineered in such a way as to delay or even hinder financial growth.

Just think about it, there's a negative social stigma of "still living with your parents". When does it start to kick in? By the age where you're either still in college or just out of college and working. 18-24. During this 6 year time-frame, many people move out of home even though they really don't need to. They "feel" or "think" it's because they want to feel more independent, or they won't feel bad about still living at home. But by doing so, they trade financial growth for emotional comfort. 6 years of rent and utilities at let's say $1,000 per month, at an annual 3% rate of inflation (very modest) is roughly $78,000 at the end of that 6 year period. And that only represents the value of the funds SAVED. If that money was invested during those 6 years, at an average annual rate of 5%, would be roughly $88,000 at the end of the 6 year period.

But let's not stop there. There are other social pressures that apply to us and we choose to voluntarily wave our immunity to. The two very costly ones are:

- Engagement rings

- Weddings

Think about it.

The average engagement ring runs anywhere from $8,500 (1ct) to $36,000 (2ct). The average wedding runs anywhere from $80,000 to $140,000.

What's troubling is how EARLY in life these expenses are incurred; usually around late 20's to early 30's.

The thing about financial growth, is that it happens exponentially. The earlier you save and invest, the more your money will multiply (through the "compounding" effect of the rate of return and reinvestment of that return). More importantly, the MORE you invest, the more money you'll have subjected to that rate of return.

Things such as (cars, renting, engagement rings, weddings, and even homes) can be "holes" in one's pocket and have exponentially damaging effects on their financial future.

For example: If you avoided the cost of having a car, the price of buying that car, the cost of renting, the cost of an engagement ring and wedding; by the time you're 30 years old, you would have avoided a total of $196,500 to $304,000! That's PURE EQUITY!

Instead of being expensed, it can be invested instead during that time, and by the time you're 30, it could be $265,275 to $410,400 of equity instead.

Which begs the question.

Since you DO have the choice of how to live your life and where to spend your money; when you've found the person you want to spend the rest of your life with, which is more important to you?

Spending your money early on the ring and wedding to have lasting memories for a lifetime!

or;

Investing that money to be financially secure and grow as a couple so you can provide a better lifestyle for both yourselves and your family later on?