>I think one of the least understood concepts of saving/investing is the time value of money. I have been contributing 10% of my salary (with a 5% employer match) to a personal retirement account for about 15 years now. At the rate it has been growing plus all my future contributions, it would be worth around $1,200,000 (US) in about 20 years. Even if I stopped contributions at this point, it would still be worth about $1,100,000 in 20 years at its current growth rate. No rate is guaranteed and my memory is a little fuzzy right now on thos figures, but they are close, but you should look at what some amount of your savings would be worth at different annual growth rates (5%, 7%, 10%). I never assume more than a 10% per year growth rate, but I have been getting about that now for all these years.

The crash of some years back (when was it? 2002?) must be a warning to us all. Maybe, in 20 years we must conclude that afterall the growth rate was only 1% and the actual amount only, let's say, $80,000. Or even negative. It is a dilemma that can only be avoided by saving at a fixed percentage.


>Also, interest on credit card debt is a killer. If you have multiple debts, get rid of ones that would free up the most cash flow, then work on getting rid of your other debts with the freed-up cash. Others may suggest paying off the highest interest rate debts, but you will need to decide what would work best to pay off debts as quickly as possible.

Yes, those credit card debts are a huge problem in the States, I have read. Companies give those cards too quick and people cannot resist the temptation. Dutch people save a lot, our government no longer likes that, because it suppresses the economy. Again, a dilemma, no, two dilemmas. One in the States, one in Holland.