Wednesday, May 18, 2016

Young People Should Learn and Profit from The Biggest Financial Regret of Oldsters ... Wasting Time and Money While Young Often Leads to Financial Insecurity When Older

We all have at least two important persons to consider when entering and proceeding through adulthood -- the well being and needs of each of our (1) present and (2) future selves. Both deserve to be treated fairly.

So listen up, young folks. The voice of experience from oldsters is about to be shared. And your future self will be properly positioned to profit from it by simply vowing not to repeat their behaviors.

The simple fact is that vicarious or observational learning can and should be a powerful and profitable approach to borrowing, spending, saving and investing. And all that our younger friends will need to do is simply take and time to listen and learn from the valuable lessons of those who have gone before them.

Vicarious learning can occur easily and inexpensively when the young are 'willing' to learn what those who have 'been there and done that' have been taught by attending the sometimes unforgiving 'school of hard knocks.'

Reverend Billy Graham was once asked by a young college student, "What is the greatest surprise you have found about life?" His reply was the following, "The brevity of it."

So when the oldsters are willing to share what they know, it's time to pay close attention, my young friends.

This is No. 1 financial regret of older Americans contains this valuable teaching lesson through the voice of experience:

"When it comes to their finances, most Americans are filled with regret.

Fully three in four Americans say they have financial regrets, according to a survey of more than 1,000 adults published Tuesday by

Their biggest regret: Not saving for retirement early enough (nearly one in five Americans put this in the No. 1 spot). What’s more, among those 65 and up, 27% said this was the biggest regret, compared to 17% of those aged 30 to 49.

America’s biggest financial regrets
Percentage who say this is their most significant financial regret

Not saving for retirement early enough  18%
Not saving enough for emergency expenses 13%
Taking on too much student loan debt 9%
Taking on too much credit card debt 9%
Not saving enough for your children’s education 8%
Buying a bigger house than you could afford 3%

Indeed, it is costly to wait: A person who starts saving $300 a month for retirement at age 25 (assuming a 5% return on investment) will have about $450,000 saved by age 65, despite only contributing $144,000 into his retirement account. Meanwhile, if that person waits until 35 to save the same amount each month, he will contribute a total of $108,000 towards retirement but only have about $250,000 saved at age 65. . . .

What’s more, waiting to save only exacerbates the problem of our already paltry nest eggs: According to 2015 data from the Employee Benefit Research Institute, fully 28% of workers say they have less than $1,000 saved and 17% have between $1,000 and $9,999; meanwhile, just 14% of workers have $250,000 or more saved.

That’s far too little, according to many financial advisers: Guidelines from Fidelity, for example, say that by the age of 30, you should have your entire salary saved; by 40, three times your salary saved and by 50, six times your salary saved.

Other financial regrets that Americans have include not having enough saved for emergencies (13%) and taking on too much student loan debt. Indeed, fully 62% of Americans have no emergency savings, according to a survey released last year by; experts recommend that you have at least three months of living expenses in savings for emergencies. Furthermore, the amount of debt that students graduate with has risen rapidly: In 1993, it was less than $10,000 per student, in 2012, it was nearly $30,000, according to the Institute for College Access & Success."

Summing Up

To repeat, Billy Graham said that his greatest surprise in life was "The brevity of it."

Time definitely does fly so please don't waste any of it, my young friends.

On the other hand, vicarious or observational learning is free to the taker. And that kind of teaching and learning very much applies to developing the habit of regularly saving and investing at an early age.

Our younger selves can benefit our older selves greatly by knowing and acting sooner on the knowable but too often unknown benefits of saving and investing for the long haul. The compounding rule of 72 is real and its benefits can be enormous.

Learning, spending, borrowing, saving and investing wisely during our younger years need be neither difficult nor impediments to a life well lived during all our years.

So here's my earnest advice, young folks --- don't needlessly waste any of your valuable time here on earth. It's too short to waste, and it's too precious as well.

That's my take.

Thanks. Bob.

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