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The Rules of Wealth, 3rd Edition by Richard Templar

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RULE 46

Save in big chunks – or should you?

I always thought that if I could get my hands on a big chunk I would put loads of it away and that would be a brilliant way of saving. I have a friend who says that is a nonsense and that the drip-by-drip effect is the best way to save. Who is right and who is wrong? Obviously I must be right. It’s my book, after all.

Let us consider it a bit more logically. Suppose I save a big chunk. Let’s say I get £20,000 for some work I do or something I sell. I spend half and save half. And I do this when I am 50. How much do I have at retirement?

My friend saves a measly, miserly £10 a month – small potatoes I say. But he does start early – at 20 and never misses a month. Who is going to retire big time and ...

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