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November 7, 2007
Don’t spend it like Britney
You’re not as rich as Britney Spears, but you can still beat her at retirement savings, says Money Magazine’s Janice Revell in CNNMoney.com. The “bombshell news” in personal finance last week was that Spears spends every penny of her $737,000-a-month income “(yes, per month)”—but her “saving habits are actually pretty normal.” Britney could retire with $300 million at age 65 if she socked away 8 percent of that a year, starting from scratch “like any other 25-year-old.” But a 25-year-old starting at $30,000 a year could retire with nearly $2 million by putting 8 percent in a 401(k). For 20-somethings, their biggest asset is time. Too bad the “overwhelming majority” aren’t spending it wisely.
The coming recession’s silver lining
A recession is coming, but that isn’t all bad, says Robert Samuelson in The Washington Post. “Recessions are problems, not tragedies.” And since “the business cycle hasn’t been repealed,” rising oil prices, the growing credit crunch, and the deepening housing crisis suggest the time for the next one is at hand. But there are “often-overlooked benefits” to recessions. They quash inflation, “punish reckless financial speculation,” and discipline the economy for long-term strength. A recession now could even tamp down oil prices and “trigger a faster—and healthier—drop in home prices,” speeding up the housing recovery. The worst thing we could do is prevent the cycle from running its course.
of The Week magazine.