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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

#181

Post by beambot »

branchless wrote: post #144
beambot wrote: post #83

Earlier quoted context omitted.

Best example ever: http://www.mrmoneymustache.com/2015/05/20/what-im-teaching-m...

MMM has at least two rental properties and is a phoney. He can teach his kid to be a rentier by borrowing long and taking advantage of the separation between the value of labour vs assets when fiat money is over-issued by private banks. And how to run a web-site about being frugal whilst deriving rental income from three families who cannot save because they are busy working hard to keep MMM pumping out half-truths o…

How does owning rental properties invalidate his message of "avoid rampant, unnecessary consumerism"? Certainly, not everyone can derive their retirement income from rentals (the numbers don't work out). But lucky for you: There are other forms of investment.

BTW: I currently rent. It's the financially prudent thing to do in my situation, and I certainly don't begrudge my landlords for it -- they're the ones locked into an illiquid, overvalued asset.

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

#182

Post by rconti »

misiti3780 wrote: post #82
runako wrote: post #45

Earlier quoted context omitted.

I think you're implicitly doing an asset allocation for the poster. > Cash on hand or it's invested in stocks, bonds and my home. That could be $100k on hand in checking, $600k in stocks/bonds, and $200k in home equity, with $0 in a savings account. Asset allocations that don't use savings accounts are not necessarily 'precarious'. Also, it's worth noting that most financial advisors do not recommend that you keep a…

everytime someone says that, I always think of a great quote by Nouriel Roubini: "asked whether he invests in stocks, he replied, "Not as much these days. I used to have a lot in equities—about 75%—but over the past three years, I’ve had about 95% in cash and 5% in equities. You’re not getting much from savings these days but earning 0% is better than losing 50%." [1] https://en.wikipedia.org/wiki/Nouriel_Roubini

When the market goes down, you can still hold. Or you can sell before the bottom. I was playing in the market in 2008, I got out after the down lost about 2000. Paid off all my debt, got back in at lower prices! Worked great.

I also have $1 in my savings account.

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

#183

Post by X-Istence »

patio11 wrote: post #5

There's a conversation to be had about many Americans living in precarious financial situations, but the reason why most Americans don't currently view their savings accounts as priorities is because in the current interest rate environment savings accounts and CDs are products with vanishingly little to recommend them. The APY my bank offers is one basis point . That's $1 per year for every $10k held in the account.…

My bank offers 0.75% APR. For 10k I would get 6.25$ a month, or 75$ a year. Slightly more than yours, but still completely and utterly worthless in the long run.

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

#184

Post by branchless »

beambot wrote: post #181
branchless wrote: post #144

Earlier quoted context omitted.

MMM has at least two rental properties and is a phoney. He can teach his kid to be a rentier by borrowing long and taking advantage of the separation between the value of labour vs assets when fiat money is over-issued by private banks. And how to run a web-site about being frugal whilst deriving rental income from three families who cannot save because they are busy working hard to keep MMM pumping out half-truths o…

How does owning rental properties invalidate his message of "avoid rampant, unnecessary consumerism"? Certainly, not everyone can derive their retirement income from rentals (the numbers don't work out). But lucky for you: There are other forms of investment. BTW: I currently rent. It's the financially prudent thing to do in my situation, and I certainly don't begrudge my landlords for it -- they're the ones locked i…

Because rampant consumerism isn't the issue. Most families are responsible with their money. Their greatest expense? Rent/mortgage which is pushed up by:

1. bankers issuing insane amounts of debt that out-pace wages

2. speculators borrowing from said banks to "invest" in pushing up living costs for families (ie people like MMM)

The media loves to portray people as feckless idiots but the real problem is economic rent extraction by people who are adding zero value to society. That is the rentier - they generate no wealth merely appropriate it.

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

#185

Post by rconti »

dannypgh wrote: post #169
dangrossman wrote: post #79

Earlier quoted context omitted.

You sell the stocks and bonds and have cash the same or next day. You can also take a home equity loan.

If the market declines significantly, and you're still a long-term bull (inherent to the buy and hold strategy), you probably don't want to sell until the asset recovers.

But is it worth missing out on the potential gains of 6 months' income doing nothing, just so that if you hit an emergency (by definition a rare thing) you don't sell during a down period?

I mean, keeping the money in savings virtually guarantees 'losses' in real terms.

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

#186

Post by UK-AL »

jzig wrote: post #97
Symmetry wrote: post #72

Earlier quoted context omitted.

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%.

Market fall of 80% in a portfolio that has been diversified isn't that bad. Say you 50% in shares. It has lost 80% of that 50%. That's not so bad. You still have a chunk of savings.

If goverment bonds loose all their value, it means goverments are close to failing.

If real estate is loosing all its value. It means people have no money to buy houses

If all 3 is going on the same time, some serious stuff is going and I'm not sure your goverment backed account is really that secure.

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

#187

Post by mywittyname »

scott_karana wrote: post #73
Laaw wrote: post #54

Earlier quoted context omitted.

You're the second person to say this, but how would "cash in savings" be equally worthless? Maybe I'm not understanding, but it's pretty difficult to actually lose money in a savings account, that's the whole point.

> in a broad-sweeping financial collapse, then "cash in savings" would be equally worthless. > how would "cash in savings" be equally worthless? Maybe I'm not understanding, but it's pretty difficult to actually lose money in a savings account, that's the whole point. The cash wouldn't be lost, but it would have reduced purchasing power in a recession. And if inflation is steep, you're actively "losing" money. It wou…

You have that backwards, during a recession Cash is King. $10,000 in summer 2009 bought you a hell of a lot more of practically anything than the same amount a year previously.

People with cash on hand in 2009 made out like bandits. Cheap stocks, cheap houses, cheap cars. Everything was cheap, cheap, cheap.

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

#188

Post by branchless »

ghaff wrote: post #179
branchless wrote: post #167

Earlier quoted context omitted.

The frugal stuff is rubbish. He can be frugal because the main outgoing for any family is rent. He's taking in two rents. The rest is just a cheap show. The reason why we are all suffering is because of rentiers. It's not because we have slightly expensive data plans on our phone. Rentiers are using this to explain away the real problem. This guy is along for the ride for the web-clicks. Go on his site and ask a ques…

It's "renters" BTW. [EDIT: Scratch the previous. I am, of course, wrong about the renters correction. Misread.] I'm not sure what he did to get your back up so much or when being a landlord became such a terrible evil. Also, "we" are not suffering. Yes he has a schtick and probably a pretty profitable one. His general advice is probably good for some but mostly isn't my thing because I like restaurants and traveling…

Ok you've really shown you have zero background in economics with that one. It's "rentiers", I can spell renters fine but it makes zero sense in the context above. Go read.

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

#189

Post by whyleyc »

branchless wrote: post #167
ghaff wrote: post #159

Earlier quoted context omitted.

I think you're being a bit unfair. I have no doubt he is pretty frugal. That said, I'm not a huge fan of his schtick but recognize that there are people who probably benefit from the over-the-top exhortations to avoid spending money. A lot of people fritter away a lot on things that they don't need and may not even especially enjoy. Which has been my main takeaway on those occasions when I've skimmed his site. Whatev…

The frugal stuff is rubbish. He can be frugal because the main outgoing for any family is rent. He's taking in two rents. The rest is just a cheap show. The reason why we are all suffering is because of rentiers. It's not because we have slightly expensive data plans on our phone. Rentiers are using this to explain away the real problem. This guy is along for the ride for the web-clicks. Go on his site and ask a ques…

I'm not sure you can argue MMM is trying to hide his rental situation given that he has published numerous blog posts discussing it in depth starting in 2011:

http://www.mrmoneymustache.com/2011/05/23/get-rich-with-owni...

http://www.mrmoneymustache.com/2011/06/29/good-times-for-lan...

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

#190

Post by toomuchtodo »

morgante wrote: post #174
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.

> 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. Any scenario where the stock market declines by 99% ($100k to $1k) would basically mean the collapse of the entire financial system. I doubt your bank savings account would be very useful in that scenario. Moreover, I don't think this article is actually talking abou…

> Moreover, I don't think this article is actually talking about people who do save but just choose to save into high-return assets. I save 80-90% of my income, but it all goes into index funds. Does that mean I am not "a saver?"

Not at all. This article is about people who aren't saving because they don't think its necessary or because they can't afford to.

An emergency fund IS NOT an investment. It is insurance; treat it as such.

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