Today's Quick STATS
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Carlos Slim Helú is a Mexican businessman who was ranked as the richest person in the world for a few years (Bill Gates regained the title recently.). Slim's personal finance tips reflect commonly held wisdom among wealth-building experts, including this very basic tip: start early. If you're 45 and struggling, this may seem irrelevant, but in your case, the advice should be changed slightly to "start now." The sooner you start managing, saving, and investing your money, however limited, the better off you'll be as long as you avoid mistakes like throwing all your investment money into one stock. Slim lived this advice, buying shares in a Mexican bank at age 12, and earning 200 pesos a week at as a teen working for his father's company.
We tend to think of rent as the recurring monthly expense we pay to a landlord for living in a house or apartment that we don't own.
But we also pay rent for money - and lots of it
The monthly and annual numbers below represent only the average interest or "money rent" paid in each major category by the average American.
How much rent are you paying?
TODAY IN General History
TODAY IN FinancialHistory
1981: Gail M. Pankey becomes the first African-American female member of the New York Stock Exchange.
Tip of the day
We tend to think of rent as an expense that applies to temporary housing. But, as you can see above, we also pay rent for money - and lots of it.
Note: The average mortgage is actually $1,031/$12,372 on a monthly/annual basis compared to $1,231/$14,772 for an apartment.
There are ways to avoid paying the amount of mortgage money rent we pay over our lifetimes (the ~$170,000 noted above is a lot of money). We’ll get into that in future posts but for our purposes today, we’ll be assuming the mortgage money rent is unavoidable and just do the math on investing the money rent for all other loans for 30 years at a modest assumed return rate of 5% versus just consuming it.
Instead of having paid $70,000 to rent money for 30 years with nothing to show for it, you could have amassed a total of $155,000.
Moral of the story: Avoid, as much as possible, renting money and invest that money in instead your future self.
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Source: Wall Street Journal