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Your Money Milestones: A Guide to Making the 9 Most Important Financial Decisions of Your Life
book

Your Money Milestones: A Guide to Making the 9 Most Important Financial Decisions of Your Life

by Ph.D. Moshe A. Milevsky
January 2010
Beginner content levelBeginner
224 pages
5h 26m
English
Pearson
Content preview from Your Money Milestones: A Guide to Making the 9 Most Important Financial Decisions of Your Life

3. How Much Debt Is Too Much and How Much Is Too Little?

As you learned in the previous chapter, it makes little economic sense to target a fixed or unyielding savings rate (while you are working) or replacement rate (for income in retirement). Instead, the correct way of thinking about saving rates is as the output of a financial plan that seeks to smooth consumption or equally distribute the benefits of human capital over the entire life cycle. That is: When you are young, have few financial resources, and are investing time to develop and improve your human capital, spending more than you earn is, in fact, quite rational. Similarly, during your middle and later working years, when your earnings are likely the highest they will ever be, it ...

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Publisher Resources

ISBN: 9780137067718Purchase book