Personal savings…. perhaps our biggest long-term personal financial problem. We borrow more than we save. Last year, for the first time in 70 years, we borrowed more than we saved. We are the only developed nation in the world with that dubious distinction.

“Pay yourself first” is an expression that has layers of meaning. If you’ve got creditors eating up your income, you’re not really getting anywhere. Its not what you earn, its what you keep. Our savings and investment is what we have to show for the work we do. A six figure income is only relevant if it buys you security.

Many teachers have built seven figure retirement plans without being substantial earners. It is the consistency and time that does it.

In market investments, a periodic, regular investment serves an important purpose. Dollar cost averaging is an investment strategy that works. Investments of a level amount at regular times, ensure that you are buying more shares at lower prices, and less shares at higher prices, exactly what you want to do. When you add the human element, investor psychology steps in, and for many robs us of our ability to be effective investors. You’re emotional attached to your money, which is understandable. Fear and comfort, bring us just what we don’t want. We feel its safe to invest when there is confidence, when people have profits, when the market is high. If your hairdresser is giving you stock tips, head for the hills. When there’s pain out there, and prices are beaten down, the value is there to be had. Its called buy low, sell high, but sticking to it requires constitution.

We accumulate our susbstantial assets in retirement plans, contributions made out of our pay before we get our hands on it, with penalties on distributions prior to age 59 ½.. We don’t consider our mortgage payments to be investment deposits, but our home equity has become a major component of our net worth. The secret is to find management with long term track records, and make periodic investments, right as rain, no thought or consideration given to timing. Let the managers manage, and time will take care of the rest.