 Good day fellow investors. Yesterday we discussed Nobel Prize professor Richard Taylor implications about investing in financial markets and how behavioral finance affects our rational decision making, especially in adapting new information and other situations. Today we go one step beyond investing and something that's even more important than investing. Personal finance and saving for investing. How are we behaving in our personal life and is what we do for our investing not picking stocks? How much we allocate from our budget to investing is that enough and is that rational? The fact is that 50% of Americans don't have a 401k savings plan, which is not a good sign. On top of it just 10% of Americans save enough for their pension. Depending on where you are in the world this could be skewed. However I would never place my pensions in the hands of a government. The pension system is an experiment that has been going on for not even half a century. So it's something very dangerous to be sure that the government or some other institution will provide your pension. Therefore keep listening in order to see if you are doing enough for your retirement goal or for whatever independence financial independence goal that you might want to hit at a certain future date. So as I said only 10% of Americans and probably also in the rest of the world the situation is the same save enough. Now the problem is that we are not saving enough is first self-control. We prefer immediate gratification rather than future gratification. If you save now if you cut your spending now that's a loss and we know loss aversion from yesterday. That's painful especially if you have to invest it somewhere and who knows when you are going to get the benefits from that. However it's very important to have a part of your budget invested. Further investing can be overwhelming. If you just look at my videos you say oh my god where am I going to invest. That's too much information. If you are not passionate about investing I can imagine someone who's passionate about dancing when you start talking about stocks and investments after five seconds they are out. However taking a responsibility about the financial life is very very important and that's what people don't like. That's why again they prefer spending money now than investing or thinking about investing money in the future. Now the professor and his partner Slomo Bernazzi have made a very interesting plan that really works that helps people save more and plan more effectively in the future. They call it save more tomorrow which is a plan where you save more automatically put more aside in your 401k plan as you get the raise. So if you get the raise let's say 50% of that raise go immediately into investing and 50% goes into spending so you're not cutting anything. There is no loss aversion but you are saving much much more for the future. And they started this project with a small company in the Midwest in 1998 and people were saving 3.5% of their salary. Five years later they were saving 13.6% of their salary because they each year instead of spending all the raises they got they put those raises into investments. So that's a very interesting plan however there is even something more important that I want to discuss today and that is are you saving enough or investing enough to reach your investment returns? Many pension funds investors think stock will give 8-10%. That's completely wrong and I'm not saying that. Jack Bogl the founder of index investing is saying that and I have put this video in a playlist and after this video it should be immediately Jack Bogl discussing how stocks will return 4% in the next 10 years in a good scenario. Bonds will return 3% and that's not inflation adjusted. So are you doing enough now in your financial life in order to reach your goals which such returns? There is always then an option if you're not doing enough to save more or to invest in a smarter way to learn more about investing to lower your risk and increase your returns. So the question is do you have a plan when you invest? Do you think your expected returns are in line with what your investments can bring? Not speculative returns really look at the fundamentals the earnings the dividends that your investment have now and are expected to bring in the future. And then is what you're doing enough to support the lifestyle you want to have in the future? If not then you have to really think about what you're doing and how to change that. I will leave you today by asking you to watch the Jack Bogl video. It's pure financial knowledge and wisdom in one place. I don't agree on him on index investing because I think I'm smarter and I think many people that put a little bit of effort into investing can be smarter but for the rest for the returns for what he's doing for the costs really chapeau Jack Bogl. So watch his video today instead of listening to me. He has much more experience much smarter a great guy. Thank you for watching I'm looking forward to your comments and I'll see you in the next video.