How Much Cash Is Enough?
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Loading …I was surprised to read this article at Bloomberg.com which basically talks about how China is handling the latest inflation situation in their country.
The central bank will keep using the reserve requirement to curb inflation as it has a milder impact on economic growth compared to interest rates.
Several factors contributed to the central bank’s decision to increase the percentage of bank deposits from 16.5% to 17.5% including the trade surplus, foreign investment, house prices, and inflation to name a few.
In a lot of ways, what is going on in the news can teach us about our personal finances and how we manage it. While most of the recommendations suggest that younger people keep a small amount of cash and gradually increase their cash reserves the older they get, I have to wonder about how much does this “advice” translate into a percentage of the total net worth regardless of age.
Comment by passivefamilyincome on 10 June 2008:
Good point Mark. Unfortunately, I think young people don’t save enough. The idea of saving is not really taught to our children in our education system in my opinion. We live in too much of a debt society where people want bigger and better things all the time. I think our young people see this and don’t think they need to save. I am often troubled when I talk to people who are younger than me and how they don’t have a 401k setup or any kind of plan for retirement and virtually no savings.
Maybe the current recession, housing market crash, and rising energy prices will change our country’s mindset?
passivefamilyincome’s last blog post..May 2008 - Family Budget Review