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How Much Should I Save?
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 It's all about opportunity cost. By giving up the purchase of something today, you can have a nice nest egg tomorrow. In this video, Kal Penn discusses saving for:

  1. emergencies
  2. house down payment
  3. college for your kids
  4. nothing in particular

For discussion:

  • If you give up a $5 latte every day, how much would you have by the end of the year?
  • What if you can invest that money at a 5% annualized rate, now how much would you have at the end of the year?
  • If you save $1,000 at the end of each year and invest it in an account earning 8% per year, how much would you have by the time you retire (say, in 40 years)?
  • What if you start the saving in 20 years, that is you save $1,000 every year in an account earning 8% per year, how much would have when you retire 20 years later? Is the amount half the original amount? What is causing the difference?

 

 

 

 

 

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