I read many finance articles every day. Some of the ones that I like; I share with you on these pages. I had to do a “double take” after I read the article linked below.
Just a few months ago many were outraged that oil was nearly $80 per barrel. That translated to well over $3 per gallon for most in the US. As much as people complained, they still managed to find enough money to fill up their SUVs. Four months later with oil trying to find a bottom around $58 per barrel, everyone should be $50-$100 per month richer. Right? Goldman Sachs has concluded that the gas savings will contribute a 0.1% increase to the GDP. In other words, that money is / will be spent. On bright side, it will be spent on something more pleasurable than gas. However, the net effect is the same – it’s gone.
The premise of the article is – why not put your gas savings to work for you. Let’s assume that your gas savings amounted to $70 per month and was invested earning 5%; it would be worth $57,000 in 30 years. This is what made me do a “double take” – that’s more than the average household had in retirement savings last year. Only 57% of U.S. households had any retirement.
It pains me to hear people say that they do not have money to invest. I reality they simply choose to spend their money on something more interesting.