Comments on: 3 Lame Excuses For Not Saving Money

By: G

Sun, 27 Sep 2009 01:44:39 +0000

Patrick is correct, Jack would have saved $2,421,625, to be exact. However, if Jack had started saving 2 years before hand, at age 20, he would have saved $3 million!

By: James M

James M — Tue, 01 Sep 2009 16:56:26 +0000

This article proposes a good idea that I’m not sure works in practice. I am 24, and with a frugality instilled in me by my parents (i.e. making to without a car, and buying better not more), have managed to save (while still at university) a reasonable sum of money. When I was younger, this money was all kept in CD’s or savings accounts, which earned paltry interest. However, in accordance with apparently logical principles of money management, I invested in 2004 some of this money (which I don’t need for spending) in a variety of large-cap stocks that have global reach. Well, all went well and good, until everything went to crap in 08/09, and as I didn’t have the foresight to withdraw before then, forcing me to ride it out, take my lumps, and call it a “learning experience” while as of right now, I’m still waiting to regain the $4k to just get back to my principal (requiring another 6.5% growth, not counting 4 years of “lost growth”).

Granted, other than having more foresight, it made little sense to invest money not needed in the short-term in savings/CD/bonds, as these earn too little interest when the historical assumption is that broad risks of diversified market investing balance out over a 20-year horizon. Considering my recent experience, I have started to become skeptical that this conventional wisdom has much merit.

But a thought-provoking article nonetheless!

Best wishes,
JM

By: Will D

Will D — Mon, 31 Aug 2009 14:03:45 +0000

Hey Kyle.
As a 22 y/o man who has fully funded his IRA this year I will say that a good fund manager will be able to get you close to 10% with conservative investing by buying/selling government “No coupon” bonds. Federally guaranteed treasury bonds

In short – dont worry about it. Get the money together, and send it away to a smart guy (conservative) whose job it is to make his clients money. Someone with experience and a quarter million dollars spent on research is going to make better decisions than you or I.

Hope that helps

By: Kyle

Kyle — Mon, 31 Aug 2009 12:06:36 +0000

This principle is definitely lacking in the America. But I’d like to know how Jack consistently achieved 12% interest each year. The articles that promote saving always seem to use these large and unrealistic numbers. The average high yield savings rate is 2-3% while many were 4% before all the bank failures. Is he using stocks/funds? Because if he is you must also consider the risk of an investment which could mean a loss to savings, as many have experienced recently.

I have a small amount of savings in stocks and majority in high yield online savings, which yields about 4% return.

By: Patrick

Patrick — Mon, 31 Aug 2009 07:26:04 +0000

Actually, I think he makes very near that amount? Close to $2,470,000. If I did the math correctly. Correct me if I’m wrong please.

In any case, a bunch of money. Excellent article Brett.

By: Fred

Fred — Wed, 01 Jul 2009 02:28:08 +0000

Just to help people out, what Joshua said on the amount if Jack saved continuously 2000$ until 65 he would not be making 1,235,339+1,235,557. He would in fact make much more, though Joshua used nice logic it wasn’t quite sound. I have forgotten the formula but im guessing Jack would have made around 3 million-4 million. It just goes to show how powerful a savings account is.

By: Michael Q

Michael Q — Sun, 08 Feb 2009 08:03:11 +0000

There are many different ways to “save.” There isn’t anything wrong with treating yourself to luxury once in a while, but you must have discipline. If you can budget a purchase far enough in advance, you can enjoy luxuries and save at the same time.

This may seem counterintuitive, but if you want to save money in the long run, pay for quality and take care of your stuff. Sure you can buy a $90 dollar pair of dress shoes, but how long are they going to last you? If you buy a $300 pair of shoes, if you take care of them and resole them when you need to, you will save more money in the long run. It’s the same for everything, whether it’s kitchen utensils, safety razors, or luggage. Quality eventually pays for itself.

Every man needs a little motivation sometimes. Plan ahead and enjoy your savings.

By: Joshua

Joshua — Fri, 07 Nov 2008 17:02:33 +0000

If Jack had saved 2000 a year until he turned 65, he would have 1,235,339+1,235,557.

I recently subscribed to your blog and have really been enjoying it.

By: click4credit

click4credit — Sat, 01 Nov 2008 16:13:43 +0000

A bit related to No. 3, some people actually do not know the difference of wants and needs. Some would say something like, “I need to buy use my savings on this one” when in fact it is something that they could live without.

By: The I Deserve Mentality: How To Recognize and Modify Harmful Spending Behaviour | Bridging The Gaap

Mon, 08 Sep 2008 20:59:38 +0000

[...] Art Of Manliness article entitled “Three Lame Excuses For Not Saving Money” inspired this post. While all three excuses are interesting the third lame excuse for not [...]

By: Find a job

Find a job — Tue, 22 Jul 2008 01:44:00 +0000

Currently 40 years old I must admit it took me most of my life until about age 35 to get it into my thick head to tuck some dough away. Nobody was giving me money and I was spending all I had. I encourage all the whippersnappers to start early even if only a little. Now I am trying to play catch up and while not impossible it is pinching me a bit. Just do it damnit!

~Larry

By: depression rate

depression rate — Mon, 12 May 2008 10:41:02 +0000

[...] less common. In 2005, the U.S. recorded a negative savings rate for the first time since the Greathttp://artofmanliness.com/2008/01/21/3-lame-excuses-for-not-saving/Statistics by Country for Depression – WrongDiagnosis.comThe following table attempts to extrapolate [...]

By: James

James — Thu, 21 Feb 2008 15:02:25 +0000

I would love to hear your opinion on different saving methods and high yield methods.

By: Toby

Toby — Sun, 10 Feb 2008 21:10:47 +0000

Excellent information, I’m going to send it to all of my friends.
Much thanks

By: Brett McKay

Brett McKay — Sat, 02 Feb 2008 18:51:34 +0000

@ Sean- That’s great you’re going to start researching. That shows you have the initiative to take control of your life. Very manly. Good luck with your research.

If you want a better savings account, you might consider an ING account. They have great rates. Email me through the contact form and I’ll send you a referral. If you put in $250 you’ll get $25 for free.

I hope you keep coming back. I’ll be posting several posts on personal finance for young people. If you haven’t already, make sure to subscribe to the blog and tell your friends, too.