What about Saving?

Saving money is normally a good idea. Besides "under the mattress", there are many places one can store money for a rainy day: checking, savings, and money market accounts, CDs, savings bonds, and many others.

But before you decide how much to save, you should look at your current debt load. While saving is an important habit to form, it can be done foolishly. Earning 3% on a savings account while paying 7% on a car loan or 22% on a credit card is not a smart move. It takes some thought to figure out a good balance. The important thing to keep in mind: ignore interest at your peril. It adds up, and siphons off thousands of dollars a year from your budget. Your goal should be to minimize that amount as much as possible.

The Stock market

Who says that every man and woman is entitled to free money (8% yearly return) on money they put in the stock market? The excuse "risk merits reward" does not work, because nowadays people truly believe that a rounded pick of stocks will make from 6-10% (or more) every year. When the market takes a dive, everyone feels cheated. I thought that risk was part of the game? But no, people genuinely feel that it is realistic and normal to make money while doing absolutely nothing. "It's my money making money," they say. But how can money make money? Only people can produce the goods and services which have a dollar value. A 10-dollar bill today is a 10-dollar bill next year. Money is not productive by itself.