Selome Samuel

Just Haning Out with Sammy

Tag: retirement program

Ways To Save Money For Retirement

What is marginal economy?

Think it this way, which do you need more, gold or water?

Of course you need water more.

Which one will you pay more money for? One kilogram of gold or one kilogram of water? Of course, gold.


Thats because in economy, only the marginal matters. What does that mean?

Water is precious.

However, the value of water is the value of that least useful water that you still use anyway.

You use water to drink, you use water to take a shower, you use water to water your plants, then you use water to wash your car.

Obviously, the water that you drink is much more useful than the water that you use to wash your car. However, the value of water is the value of that least useful water.

Why is it so?

Thats because youre trying to maximize your profit. Of course, you use your water for whats the most useful first.

Yes, but why is the value of water so low?

Say the value of water is higher than that. Say it is $5 per gallon. The satisfaction youll get from washing your car is $1 per gallon. Then you simply dont wash your car.

Say the value is lower than that. The satisfaction of washing your car is $1 per gallon. However, water is so abundant that its cost is only $0.50. Then yo?ll use water for stuffs that give even less satisfaction, such as washing your house.

In fact, water can be so abundant that the price is negative. A negative price means that youre willing to spend money to get rid of that water. Such is the case during a flood.

In which case, youll actually spend money to get rid of water, such as buying water pumps. Thats what happened to one of my grandmas because her house is often flooded.

Whats the moral of the story? Be rare. When youre rare, youre valuable. When youre not rare, youre worthless.

Pension Calculator

Student and graduate loans are becoming more popular as student debt continues to rise and students seek alternative ways of dealing with it. The good news is that student or graduate loans are generally available without the need to show steady income or offer security. This is extremely helpful, as most students will not have either of these. Student and graduate loans also come at relatively good interest rates, particularly having regard to the fact that they are completely unsecured. The thing to be wary of is that such loans may lock the student into a long-term relationship with the lender that may not be the most advantageous one.

Student Debt

Students leaving college today average about $14,000 in debt. More than two thirds of all students must borrow and the vast majority of this debt takes comes from special loans provided by the Student Loan Company. Once the student begins working, the loans will be repaid, but the interest rates are capped at the highly attractive rate of 1% above base rate. This is very low compared to most sources of credit available.

The rules for repayment are simple. Beginning in the April after graduation, 9% of all earnings above $15,000 are automatically taken to repay the Student Loan Company. The loans are therefore very safe, as they are only due once you join the workforce and begin to earn a steady salary.

Graduate Loans

Graduate loans on the other hand, are far more expensive than student loans. These loans are generally offered on graduation, when student loans are no longer available, to cover the costs of transition from student life to working life. This may include finding a new place to live, buying work clothes etc. Graduate loans will also be used to pay off student overdrafts, which are offered to all students as standard features of their bank accounts. The point to remember is that while graduate loans are relatively cheap when compared to personal loans, they are far more expensive than student loans.


If you have a job lined up, you may be able to borrow money from your new employer at a far better rate. This is one alternative to graduate loans. Another alternative is career development loans, which are available to those studying for certain professional qualifications such as medicine or law. Many high street lenders offer these.

It can be very easy to lose control of debt while studying. The credit is very easy to obtain and repayments so far into the future that they dont seem real. However, high student debt can seriously hamper attempts to buy a home once you enter the workforce, or save for a pension. The trends show that while student debt continues to increase, graduates are faring better, relying less on borrowing and more on salaries, to meet their needs.

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