24 of 40
BACK NEXT
Don't save too much
Steven Levitt
Author, "Freakonomics"

When I was a first-year assistant professor at the University of Chicago, my friend and department chair Jose Scheinkman relayed the advice Milton Friedman had given him 20 years earlier: "Don't save too much."

The logic was simple: An academic's salary rises steadily over time, as do outside opportunities (like writing popular books!). The right reason to save is so you can even out your consumption. When times are good, you should save, and when times are bad, borrow. Most likely I would never be that poor again, which meant I should be borrowing, not saving. I didn't follow the advice as fully as I should have, partly because my wife insisted we save - she is not quite as good an economist as Milton Friedman.

NEXT: Buy low, sell high

Last updated July 22 2008: 11:27 AM ET
More Galleries
The 13 most WTF gadgets From the weird to the gross, these 13 gadgets will make you wonder why they even exist. More
Best-loved cars in America These cars and trucks topped J.D. Power's APEAL survey, which measures how much owners like their new vehicles. More
America's most powerful cars A new 'horsepower war' has erupted among U.S. automakers and these are the most potent weapons in their arsenals. More

Special Offer
Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.