Another point would be to save. When you're young, it's easy to spend and not save. However, it's important to get into a disciplined habit of saving - don't depend on someone else to force you to save.
Also, while it's financially advantageous to have a two-income family, once you have kids priorities might change. The better choice may be to have a parent at home with the kid(s) instead of utilizing day-care.
this is very bad advice. saving money with a near nil interest rate is a huge waste of money. spend money on travel, do things with the money you have, life live. It is through expanding our horizons that opportunities present themselves which lead to a far more fulfilling live.
Simply hoarding cash for the rainy day scenario seems like such an awful way to live life. Sure, don't over spend, don't waste, and don't frivolously throw money away, but money is a means to doing things.
True, money is a means to doing things. Things like paying for an unexpected extended hospitalization. Or a new refrigerator when the old one dies. Or a new roof when a tornado plays peekaboo with your attic. Or a new vehicle when someone slams into your old one. Or for that matter, putting food on the table when you're 79 years old and really don't want to do the whole 9-to-5 thing anymore.
While it's true that you can pay for most of those things with a credit card and make monthly payments, may I be so presumptuous as to point out that if you made those monthly payments before you incurred the charges--i.e., put the money into a savings account, even one earning only a quarter of a percent in interest--then when you pay the bill, you pay only 100% of the charges. If you wait until after you incur the charges, and make payments on your credit card, you're going to pay 120% or more of the charges.
Saving money with a near-nil interest rate may be a huge waste of money, but not saving it, and having to pay finance charges when high-ticket items need to be paid for is an even huger waste.
"Saving" can mean much more than a simple savings account (which are still useful even if rates are negligible -- having a few months' worth of living expenses in savings against emergencies is a hugely calming thing), e.g. saving in tax-advantaged retirement accounts. Starting that when you're young increases the chances that you'll have a comfortable retirement, and you can more easily tolerate swings in the markets. (401k/IRA et al. in the US, every industrialized country that I know of has something like this though.)
Not that I entirely disagree with you. Dying a rich miser who never enjoyed life is a crappy way to go, just as crappy as being old and broke. As with all things, there's a middle path that probably maximizes both short and long term happiness. :)
It's not a hoarding of cash. It's living on a proper financial diet and it is crucial that you learn it early and abide by it because, when the money does start coming in, you don't get fat and slow, you stay lean and strong.
Also, it isn't all about interest rates. It's about opportunity. Having 100k and being able to borrow 100k are 2 completely different things and the first lends oneself to be much more flexible, opportunistic, and comfortable. (Also, if someone's paying you 3% or whatever, you can bet that their making more than that elsewhere.)
I completely understand what you're saying and there are many people pushing the "rice and beans" stuff. I think that's fine for getting out of a bad spot but not sustainable.
It may seem like an awful way to live, but I wouldn't have it any other way and, so far, it's paid off several times, both financially and through incredible opportunities I couldn't have otherwise taken.
If substantial inflation is on the way, the interest rate earned by your savings will increase accordingly provided you're not investing in mattress funds.
Well, the strategy would be to take on as much debt as possible with a low interest rate, then put it in savings accounts as interest rates rise (so the interest from the savings account will be > interest on the debt).
Horrible? The recent bubble aside, I understand real estate has historically been quite stable. Any good portfolio is diversified, so I don't really see why they are horrible.
P.S. Many people who "invest" in real estate rent the property, which throws a tremendous wrench in comparisons of simple appreciation.
Rate of a return is way too crude a measure. Real Estate is more stable, tax advantaged and most crucially to your wealth creation, the only investment class where John Q. Public can get 4:1 leverage (or better!).
Also, while it's financially advantageous to have a two-income family, once you have kids priorities might change. The better choice may be to have a parent at home with the kid(s) instead of utilizing day-care.
You're mileage may vary.