For starters, humans aren't very good at delaying gratification. And saving is basically choosing not to spend today so you can spend, hopefully even more, in the future. But there's another problem with saving for retirement: it is hard to set a goal.
There's one popular retirement rule that can help with that. When you think about money, the gut reaction is to compare yourself to other people. That's understandable, but it can lead you into troubling waters.
For example, the average 65 to 74-year-old has a net worth of nearly $1.8 million. So, you could argue that by 67 you should have that much money saved up. But that figure mashes together the very rich with people who aren't as fortunate.
The median net worth, with half of all people above and half below, is roughly $410,000, which is a lot lower. Which one is the better target? Act 2 Could Be 15x Bigger.
Most investors think they missed the AI boat because they didn't buy Nvidia in 2005. But according to our analysts, we're only at the end of "Act 1"—the R&D phase. "Act 2" is the global rollout.
Continue » That doesn't even consider the fact that net worth includes assets like a home, which isn't something you can easily tap for cash. Sure, you could sell your home and move into a small residence, but you still need to live somewhere. And you aren't average or median.
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