How Does Murphy'S Law Apply To Saving Money

Question: What are the main differences between saving and investing?

Answer: A savings account is for money you will use within the next 5 years. If you’re willing to leave that money alone for more than 5 years, then you can invest it.

Question: Explain why making payments on a car is such a poor financial decision.

Answer: You will be paying more for the car in the long run because of interest on the loan

Question: How does Murphy’s Law (“anything that can go wrong will go wrong”) apply to saving money?

Answer: If you don’t have a plan for your money, it will make emergency situations more stressful.

Question: How does planning and saving for your future help you build wealth

Answer: It takes time and patience to build wealth so planning and saving earlier will help you become wealthier faster.

Question: How did Jack end up with more money in his investment account by the time he retired, when Blake invested more money

Answer: Jack started investing 9 years earlier than Blake did. Jack put in less money and started earlier which gave compound growth time to do its thing.

Question: What are three questions to ask yourself before you spend your emergency fund?

Answer: Is it unexpected? Is it necessary? Is it urgent?

Question: Why should you avoid interest rate deals like zero-percent interest?

Answer: All zero-percent financing means is that you’re signing up for a payment on something you can’t afford. This still leads to debt.