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62% of Americans Have Under $1,000 in Savings, Survey Finds

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Re: 62% of Americans Have Under $1,000 in Savings, Survey Finds

#91

Post by rtkwe »

ryandrake wrote: post #69
tootie wrote: post #34

Earlier quoted context omitted.

My net worth is probably top 5% or so and I haven't even had an open savings account in 10 years. Cash on hand or it's invested in stocks, bonds and my home.

Curious, not criticizing: What is your plan if you get sick or laid off, or for some other reason need a large amount of cash immediately? I always thought it was common advice to keep ~6mo living expenses in cash savings for emergencies.

Stocks are a pretty liquid asset in those cases. And for things where the need for money is sooner than a sale would go through it could be put on a Amex/credit card and paid at the end of the month. Totally guessing but they've also probably got a fair amount of money in a checking account as their 'cash on hand'.

Re: 62% of Americans Have Under $1,000 in Savings, Survey Finds

#92

Post by mod »

forgetsusername wrote: post #74
cko wrote: post #17

Earlier quoted context omitted.

There's something to be said for having cash available - here and there, opportunities pop up for me that I can take advantage of. For example, recently I lent money at very high interest, short-term. If I suddenly get interested in prototyping electronics I won't even hesitate to buy an Arduino, sensors, and a few books. Little bits of cash is useful to "try things out." Plus there's the "better sleep at night" fact…

> There's something to be said for having cash available - here and there, opportunities pop up for me that I can take advantage of. But, by definition, every time you take advantage of an opportunity, you sacrifice cash on hand. You can't always have cash on hand and always be able to take advantage of opportunities, unless you have infinite money. They are opposing forces; your money is either "in cash" or "in oppo…

What?

You don't have to take advantage of every opportunity.

I generally buy anything that sparks my interest, and manage to bank a lot more cash than I spend.

Re: 62% of Americans Have Under $1,000 in Savings, Survey Finds

#93

Post by ChuckMcM »

ryandrake wrote: post #69
tootie wrote: post #34

Earlier quoted context omitted.

My net worth is probably top 5% or so and I haven't even had an open savings account in 10 years. Cash on hand or it's invested in stocks, bonds and my home.

Curious, not criticizing: What is your plan if you get sick or laid off, or for some other reason need a large amount of cash immediately? I always thought it was common advice to keep ~6mo living expenses in cash savings for emergencies.

I don't know about the poster but my investment account gives me access to it as "cash" if I chose to exercise that option, the brokerage essentially loans me the money and briefly and then sells some of the stocks in a pre-arranged priority to cover that cost. The "real" life implementation of this is that my kid's college tuition is auto-deducted from that account, so if the cash on hand balance got to 0 it would liquidate money markets, and then long term stock holdings, to cover the draft.

That said, I personally have tried to balance dividend (income) paying stocks and short term bonds (6months to 1 year) which feeds into the cash balance, so that covers some of it.

Re: 62% of Americans Have Under $1,000 in Savings, Survey Finds

#94

Post by code4tee »

Theres a big difference between "savings" and "cash in a savings account."

Given the current interest rate situation theres essentially no difference between money in a checking account and money in a savings account, other than that the checking account likely has a debit card of some sort directly linked to it. Both are likely earning near 0% or so close to 0% it makes no difference. Not that long ago CDs were paying >5% so it made sense to put cash into such instruments. Right now a CD is essentially pointless.

I would agree, though, that too many people have far too little cash on hand (regardless of where its stored). I often see people that live in a million dollar home but don't have enough cash in their bank account to pay the cable bill. These so called "asset rich cash poor" people are playing with fire since it's often that they banked too much on the appreciation of those assets to justify the situation they've put themselves in.

People should maintain a healthy chunk of readily accessible liquid assets which could include non-retirement non-speculative investments and some good old hard cash too.

Re: 62% of Americans Have Under $1,000 in Savings, Survey Finds

#95

Post by mod »

ryandrake wrote: post #62
manigandham wrote: post #2

This should be more explicit in saying "Savings Account" and not just savings. I have plenty of savings yet have 0 savings accounts (since they're practically useless). A little misleading here when many people just keep their money in checking or investment/retirement accounts.

But, surely anyone with over, say, $10,000 in total savings/investments has at least $1,000 (10%) of it in some kind of cash account. Why on earth would one keep all of their assets in accounts that could lose value?

The point is that checking account != savings account.

Re: 62% of Americans Have Under $1,000 in Savings, Survey Finds

#96

Post by ryandrake »

antimatter wrote: post #75
Nadya wrote: post #58

Earlier quoted context omitted.

This is the situation I am in. I'm not savvy enough to make investments that have meaningful or significant returns - so it all goes into a savings account. I have 1 years' expenses saved and it just slowly accumulates because I don't know how to make a safe return on it. I don't want to invest say, 3 months savings only to lose it... Definitely the "play to not lose" mentality rather than a "play to win" mentality b…

I'm in this exact same situation. I have very little trust in my knowledge of any other form of investing. Would much rather take the safe route.

It makes sense to hold savings in a savings account or CD if you're worried about risk of loss. The stock market is very volatile and you can lose your shirt if you don't know what you're doing. Ask me how I know this.

Re: 62% of Americans Have Under $1,000 in Savings, Survey Finds

#97

Post by jzig »

Symmetry wrote: post #72
Laaw wrote: post #36

Earlier quoted context omitted.

You're exactly the kind of person this article is pointing out, because your ability to be wiped away by the market is a precarious position to be in.

If the stock market falls by even just 80%, which is probably the minimum I'd call "wiped out" then things are bad enough that your savings account can't be trusted either.

I strongly disagree with you and believe FDIC insured accounts can be trusted beyond a market fall of just 80%.

Re: 62% of Americans Have Under $1,000 in Savings, Survey Finds

#98

Post by Retric »

Laaw wrote: post #36
tootie wrote: post #34

Earlier quoted context omitted.

My net worth is probably top 5% or so and I haven't even had an open savings account in 10 years. Cash on hand or it's invested in stocks, bonds and my home.

You're exactly the kind of person this article is pointing out, because your ability to be wiped away by the market is a precarious position to be in.

I really don't see a significant advantage to using a savings account with a bank. Keeping 50k in a checking account vs savings account costs you less than 5$ a month before taxes which is just not worth the effort of opening a second account for someone that's keeping 50k cash on hand.

Re: 62% of Americans Have Under $1,000 in Savings, Survey Finds

#99

Post by beambot »

jellicle wrote: post #49
manigandham wrote: post #31

Earlier quoted context omitted.

How does not including other vehicles help give an accurate picture of "savings"?

The vast majority of the population is not saying "I have nothing in savings" because all their money is tied up in yachts and Manhattan real estate; it's because they have no money.

Then why not ask a more accurate (less biased) question...?

E.g. david927's comment: "47% of Americans say they lack the cash to pay a surprise $400 bill" (https://news.ycombinator.com/item?id=10354263)

Re: 62% of Americans Have Under $1,000 in Savings, Survey Finds

#100

Post by mod »

kristopolous wrote: post #65

So what do we do about this? Should we have a society where people are working full-time and living paycheck-to-paycheck? Is that a fair and equitable thing? After we fix our government corruption in this country, we should look towards more socialism - I'd rather live in a society that houses homeless children, cares for its disabled, helps its sick, and empowers its poor, then one that doesn't - and I think most pe…

Yeah, I share that view--where we differ is you're saying "socialism is these things, and capitalism isn't," and I disagree.
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