Your Savings Rate Is More Important Than Your Rate Of Return

During your early years of saving for financial independence, the savings rate is your most important number. Sure, having a high rate of return is fun, but it shouldn’t be your priority.

This means that you need to save rather than thinking about and prioritizing your returns. Do you know why? Because you cannot control your returns.

The Story Of Dave

I know how Dave is wired. We talk about how we’re going to retire early and save most of our income. He’s very interested in personal finance. His habits are different from mine, though.

50% Return On Nothing – Still Nothing

In his mind, he’s killing it, and his cryptocurrencies will for sure enable him to retire before 45. Of course, a 50% return on investment in one year is impressive.

Big Returns Are Sexy

Big returns are sexy, and they give you the feeling that you’ve received ‘free money.’ While big returns are every investors’ dream, it’s not something that you should focus on at the beginning of your journey.

Compounding Without Anything To Compound

Compounding interest is awesome. It means that your returns are also generating.