Buying a Car

Don't sign on for long loans. When I read the 'Money' article, I was surprised to read that the average car loan is the second highest average term on record. This made sense when it was explained, because a longer loan would mean you are spending less each month. What people look past is the cumulative interest you will continue to pay the lender for those extra months. People buy more expensive cars and stretch their loan so they believe they can afford it. For the average midsize car, the price is about $25,731. Over 48 months, interest paid would reach $2,399.38. When your loan is stretched to 72 months, you will be paying $3,625.77. While you may be paying a lower monthly rate when you take a longer loan, it will not work out in your benefit in the long run.

Want to be a Millionaire?

This article did not take me by surprise, but it did reinforce a fact that I had already known. The article talks about how you do not need to be rich or luck into an inheritance to be rich in your later years. All you need to do is save about 10 percent of what you are earning. It gives the example that if you have a starting salary of $50,000 at the age of 25, investing 10 percent of that salary each year will yield a return of $916,618 at the age of 65. That comes out to be a little less than $100 per week, $96 to be exact. This may seem like a lot of money to a 17 year old, but it will seem increasingly small as you grow, and your salary grows. $50,000 is roughly the average income for Americans, so it is entirely possible that you could get a return of over 1 million dollars if yo only invest a tenth of the money you make. What I always find interesting is the rapid decline in returns if the investor decides to invest later in their life. If someone was to invest the same amount with the same salary, but at age 35, they would only have $483,152 at age 65.