Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

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
Here's what costs more than a barrel of oil Oil prices have crashed to below $27 a gallon -- a level not seen since 2003 -- which makes a barrel of crude cheaper than lots of everyday purchases that we don't think twice about. More
Super Bowl 50 ads are studded with celebrities The 2016 Super Bowl has rolled out the red carpet for the likes of Helen Mirren, Amy Schumer, Seth Rogen, Steven Tyler and the late, great Marilyn Monroe. More
The women of marijuana These women entrepreneurs and executives are making their mark in the marijuana industry. More

Special Offer