Is It Better to Begin Saving Earlier or Later in Life

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 Money managers hold stocks and bonds for institutional clients and are on the
  buy side of Wall Street. Some money managers use the latest sophisticated
  quantitative techniques while others do very well using simple intuition.
 Many money managers buy and hold fixed income securities including
  mortgaged-backs, corporate bonds, agency securities and asset-backed
  securities. Others focus on equities, including small stocks, large caps and
  emerging market stocks.
 Good places to start are in bank trust departments, state and local pension
  funds and in insurance companies. Many people cross over into money
  management after getting years of experience on the sell side of the business in
  investment banks.
 The job requires a combination of intelligence, effort, intuition and discipline
  to succeed in the long run. Most people lack the proper combination of these

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 Engaging in a late savings plan can prove very detrimental,
  no matter what salary, bonus plans or incentives are
 For example, if I were to fail to start saving until 15 or 30
  years into my career, rather than begin a savings and
  investment plan at the onset of my employment, I would
  need to invest a significantly larger portion of my yearly
  salary to “catch-up” to the savings dollars I would require to
  retire successfully and comfortably at the same age. This
  would cause a financial hardship and require significant
  negative adjustments to my lifestyle that could have been
  avoided with early planning.
   If I started saving 15 years into my employment, then I would
     have to save $50,530 a year ,compared to the original savings
     of $17,920 a year to reach the same retirement goals.
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   If I started saving 30 years into my employment, then I
      would have to save $210,300 a year, compared to the
      original savings of $17,920 a year to reach the same
      retirement goals. This outcome would be nearly
      impossible to reach even taking salary increases into
 Overall, an early savings and annuities plan is critical
  to my future lifestyle goals and retirement forecast. If
  my annuity from saving does not match my future
  value of salary, then I will not have enough money for
  my planned retirement years.
     The following chart on the next slide will further explain the problems of saving late.

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 To calculate and formulate my financial approach to see if I am saving
    enough to make it through life and retirement, I use the following
   First: I would find my annuity by performing the equation of
    FV=pymnt*[((1+i)^n-1)/i] in Microsoft excel. (i stands for interest rate
    in this equation and n stands for the number of years you will work.
    Also FV means future value.)
   Second: I would calculate my annuity by doing the equation
    Annuity=FV*[i/(1-(1+i)^-k)] in Microsoft excel as well. (i= interest rate,
    k= the number of years expected to live after retirement, FV= Future
   After Calculating these two formulas using my own planned financial
    outlook, I come out with a future value of $201,380 and an annuity of
    201,480. If I start saving early and save for every year I work, I will have
    an annuity that equals some what the same as my future value.
   You can also use the built in functions of excel to calculate these totals
    and do many other calculations as well.
                                                               My Excel Example
      Starting Salary, Annual Savings, and Annuity                          Can I afford to live to 100?
             for 40, 25 and 10 Savings Years
                                                                             Where should my savings
                                                                             be now? Do I have a plan

                 $201,480         $201,405           $201,377
                                                                             to guard against inflation?
                                                                            My answers to all these
                                                                             questions are yes, because I
                                                                             have a Savings & Annuities
$100,000                                                        Annuity
                                                                             Chart, with savings
           $75,000          $75,000        $75,000
                                                                40,25,10     strategies for when and

                               $50,530                          years        how much to put away to
              $17,920                                                        start planning for a
                                                                             successful retirement.
               40               25
                            Saving Years
                                                                    Click on Chart For
                                                                   Informational Link
   First: Decide how many career years you plan on having and how
    many years after retirement you plan on living.
      You should save for the same amount of years as you plan on
   Second: By using the inflation rate, your starting salary and the
    amount of career years you plan on having, calculate your future
   Third: Using your years saving, your savings rate and your annual
    savings, calculate your future value of savings. Once you’ve found
    this, you must calculate your annuity by using the payment
    function with your future value of savings, the amount of years
    after retirement you plan on living, and your savings rate to
    calculate your annuity.
      If your annuity does not come out the same as your future value of
        salary, then your annual savings is either too high or too low.

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   Fourth: Make a list of all your expenses for a month and
    how much their total cost will be.
      Doing this allows you to find your net income from your
       monthly income minus your monthly expenses.
      This allows you to know how much you can save each month
       with your net income.
   By Following these steps, which can all be done via
    Microsoft Excel, you can create a savings plan that will
    allow you to see how much you need to save annual and
    how much you need to have saved after retirement to live
    for your planned retirement years. I followed these exact
    steps to create my personal retirement savings plan.
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Saving Efficiently & Effectively
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 First, try to live BELOW your means. Don’t try to compete with “the Jones”, but
    instead be smart. Don’t spend impulsively or recklessly, and most important of
    all… don’t spend more than you earn!
 Don’t get into credit card debt. All a credit card allows you to do is spend
    money before you’ve earned it. Interest rates on Credit Cards are typically
    higher than savings rates. It’s a vicious and seductive cycle… don’t fall victim to
 Keep your credit spotless. What more is there to say about this one!
 Rationalize your spending and consider the opportunity cost. Always think
    twice about what you are about to spend and if the investment is truly worth
    the cost. Do you need this item? Will it hold its value? Will your life be more
    negatively or positively impacted by this purchase? Would the money spent
    on this item be more usefully put toward an alternative investment or
    Understand the time value of money. “A dollar saved today is worth more than
    a dollar at some time in the future.” By saving and investing today, you make
    the time value of money work for you. Give it some thought… it makes perfect
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      Take advantage of the compounding effect of money and weigh your financial
      risks. We all know that risks must be taken to make money, but that doesn’t
      mean that you should enter into them without forethought or consideration.
      Do your financial homework… otherwise you’ll fail your finals!
     Save your money. Invest wisely and aggressively. “A penny saved is a penny
      earned,” still holds true today. Start small and grow big.
     Devise your financial plan from the first day you begin your employment. Make
      a savings and annuities chart and stick to it. Remember a dollar saved today is
      infinitely more important than a dollar saved tomorrow.
     Diversify your investments and wealth. Spread your investments and wealth
      across several different asset classes. When your mother long ago told you,
      “Don’t put all you eggs in one basket,” you were hearing your first sound
      financial advise for the future.
     It’s a simple plan to follow. The hardest part is maintaining your discipline.
      Just remember that although spending is fun in the moment… saving and
      investing is smart for a lifetime. With my current income and investment plan,
      by adhering to these simple rules I will realize a net income of $1,754.00.
•Review my current finances and expenditure.        •Estimate what financial backstop will be needed to tide
•Research what financial commitment is needed for   me over the change.
my new career plan.                                 •Start to build up the financial resources I’ll need using
                                                    a range of different tactics.

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