People don't even bat their eye when they see the number 1 unless it's followed by a bunch of zeros. So why should you care about 1%? Well here's why...
Let's look at 2 different examples, you save 1% less and you make 1% less on your investments.
1. Here's the scenario for both. 40 years of saving at 7% return on your investment and you save a flat rate of $10,000 per year. This will give you a total amount of $1,996,351 after 40 years. If you save just $9,900 instead you will end up with only $1,976,387. About a $20,000 difference.
2. But what about if you only make 6% return on your investments instead of a 7% return. In that case you end up with only $1,547,619. Being overly conservative can cost you dearly.
-CC
Let's look at 2 different examples, you save 1% less and you make 1% less on your investments.
1. Here's the scenario for both. 40 years of saving at 7% return on your investment and you save a flat rate of $10,000 per year. This will give you a total amount of $1,996,351 after 40 years. If you save just $9,900 instead you will end up with only $1,976,387. About a $20,000 difference.
2. But what about if you only make 6% return on your investments instead of a 7% return. In that case you end up with only $1,547,619. Being overly conservative can cost you dearly.
-CC
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