The "daily Call" From Option Alpha: Options Trading | Stock Options | Stock Trading | Trading Online

Hey everyone. This is Kirk here again from Option Alpha and welcome back to the daily call. Today, we’re going to be talking about savings versus return and asking the question, “What’s more important?” And I think this is important to actually ask yourself. Right now, just really quickly, before you do anything else, what is more important over the course of 20 or even 40 years? Is savings more important or are investment returns more important? And I think the results here actually are not that surprising, though I think they might shock some people in the sense that when you look over a 40-year period and you compare let’s say a 10% savings rate and 6% return to a 6% savings rate and 10% return, when you actually go to about your 24, 25, the difference is mostly on the end of savings. And so, what I mean by this is that when you have 10% savings and a 6% return, that far exceeds the performance of saving 6% and earning 10% and that’s all the way out to the first 24, 25 years of your investment horizon. Wha