Finance Rule #07
Savings Rate Over Returns
Your savings rate has 5x more impact on wealth than your investment returns.
"A 40% savings rate with average returns beats a 10% savings rate with great returns."
Investors obsess over finding the best mutual fund. But the biggest lever in wealth creation is how much you save, not how much your investments return. A 1% improvement in returns adds modest wealth. A 10% improvement in savings rate is transformational.
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