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Subject:  Re: Saving in a Nation of Spenders Date:  4/7/2004  11:10 AM
Author:  TMFEldrehad Number:  29938 of 46949

First, great post!

There is one thing I would point out though.

I ran the numbers... If a person saved $30 a month (~$1 per day) at a 4% interest rate, for forty years (from age 25 to age 65), at the end that person would have $35,458.84.

True, if one saved $30 per month nominally. You are not accounting for inflation here though, so that $30 in the first month some 40 years back would be, at 3% average inflation, much closer to $100 in today's dollars. Assuming a nominal 4% interest rate and average 3% inflation rate, that makes the inflation-adjusted return rate only 1%, which means that to get to $35.5K at the end of 40 years one would have to have saved closer to $60 per month in today's dollars to get there. Still, though, your point is the same. $2/day is still less than a lot of us spend at Starbucks on the way into work.

How do we create a nation of Fools?

A good question. I don't know about creating a nation of Fools, but this one Fool was created by watching, and learning from (both via example and by purposeful instruction) my parents.

Teach your children well.



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