On June 8, 2011, the White House invited 23 journalists from leading personal-finance sites for a first-of-its-kind summit. The goal: translate important issues for the economy out of Washington-speak and into practical, pocketbook terms that everyday Americans who get their financial information online can understand.
Kiplinger.com asked President Barack Obama to reveal the one piece of personal financial advice that he had found most useful in his own life -- a question rarely, if ever, asked of presidents. Turns out the President has four pieces of financial advice that we at Kiplinger espouse all the time.
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Invoke the Magic of Compounding
“Save a little bit out of whatever you earn, and the magic of compounding interest applies.”
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Beware of Debt
Student loans dogged the Obamas. Combined, they had $120,000 worth of debt upon graduation, “and it took us ten years to pay it off. And we were lucky, because we had gone to good law schools [and] we knew that we could earn it [back].”
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Spend Less Than You Make
“Spending discipline is important.”
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Invest in Yourself
“Spend on things that are going to increase your productivity and your income over the long term,” the President said. “Our first starter home was a condo that cost $180,000, and we were able to comfortably make payments; that was still a good investment.\" So was law school, he added.
To those who say “investment is just another word for spending,\" he said. \"Well, no, actually, there is a distinction… between spending on things that are going to make you more competitive and over the long term increase your wealth, and spending on things that you’d like to have but aren’t really improving your life over the long term. And that’s an important distinction that we as a country have to make.”
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