Wisdom comes with age and experience. This applies to many areas of life, especially finance. When retirees were asked about what financial advice they’d give their younger self, they responded with these three things.
1. Keep compound interest in mind.
It’s best to start saving money for the future as early as possible. This way, your money has several years to grow. Once you consider the technicalities of compound interest, you really begin to see the value of time.
2. Follow the Rule of 72.
How do you determine how fast your money is growing? The Rule of 72 states that you can figure out how fast your money will double if you divide 72 by the compound interest rate you’re getting. This is a good way to keep track of your finances.
3. It’s all about savings.
Don’t forget to set up an emergency fund in case something unexpected happens. You don’t want a huge financial hit to wipe out your savings account. Even in a dire situation, protect your nest egg.
