Investment Related Savings

The term investment related savings refers to the amount of money that a person would have if he or she invested the savings from buying a home at a given percent over the span of years in which he or she plans to live in the home. For many people, buying a home is much cheaper than continuing to rent that same home. In order to fully understand how much money one could save, one would have to include the amount made on a conservative investment of the savings. The assumption here is that people will not just sit on their savings; rather, they will put it to work in some capacity. Some people might want to figure this number with a lesser interest rate: The standard eight percent rate, for example, is somewhat aggressive in a difficult economy, and many people will be uncomfortable assuming that they could simply invest the money for such a high rate of return.