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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

#191

A lot of people here think this is about you parse "savings". It's not: 47% of Americans say they lack the cash to pay a surprise $400 bill http://www.politifact.com/punditfact/statements/2015/jun/09/...

I think the audience on this site is mainly out of touch. When you're making a fine salary it's easy to forget that most people don't. When you're spending your time looking up at those above you and positioning to get to their level (because upward mobility is an option) it's easy to forget to look at the piles of people below you where it isn't It's easy to assume throwing $100 around here or there is normal when y…

>I think the audience on this site is mainly out of touch

Yep!!

I grew up in an entirely different mindset than the upper middle class office workers I work with. I often feel like that I can't fit in or relate to them in many ways because they seem very out of touch with the world outside of their own upper middle class existence. Even in college they never worried about bills or living expenses, their parents paid.

It wasn't that long ago (less than a decade) that spending $600 on a car repair was absolutely unbearable for me. I went through that stress and now it almost seems surreal that sort of money was such a stress in my life when I look back on it.

I will never, ever, lose touch with the sort of lifestyle that my income can provide me (though I prefer to blow $800 on a weekend trip instead of an iPhone...)

The most interesting thing is that having so much extra money provides so much more opportunity to earn even more money. The old "You gotta have money to make money" really is true. I do money making activities outside my day job that I would never be able to do if I didn't have several thousands of dollar on hand to float for a month or so. If you are talking about real estate you need tens of thousands of dollars. The more money you have the easier it is to obtain more.

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

#192
post #179

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…

> when being a landlord became such a terrible evil.

It's not being evil per se, but being an economic leech of sorts. The only reason people need to rent is because of the requirements to own (down payments, emergency funds to cover your mortgage in tough times so you don't lose your equity). Its an arbitrage between someone on financially sound footing versus someone not so.

Disclaimer: My family has a landlord or two in it. I make my disdain for what they do known. If I had Facebook money, I'd create a B Corp to provide housing to people that gave them a non-transferable equity stake, co-op style. A small amount would be "off the top" for management of the organization and for upkeep of the properties. I would make the org fully transparent ("Buffer Style") and ruthlessly accountable.

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

#193

Earlier quoted context omitted.

I'm not criticizing, but would like to point out you may fit the definition of "asset rich and cash flow poor" and, under certain circumstances, could essentially be bankrupt due to an inability to access funds. A recent example would be the entertainer 50 Cent declaring bankruptcy in the context of a judgment totaling in the millions. Also, based on my experience on Wall Street (note: not a licensed advisor or broke…

Not taken as criticism, and I absolutely know where you're coming from; solid advice. My mitigation is tight stops, and yes, I know what the downsides of those can be in a crashing market. The risk/reward for me versus a savings account at 0.5% is acceptable to me. Or if you mean it's all tied up in a 401K, yeah, I hear ya. The vast majority of our funds are in there. The mitigation to that is a goodly amount of cash…

Very cool! Also, a nice elaboration without getting too granular. I'm hoping none of these scenarios come to pass...but they aren't called "rainy day funds" because of sunny outlooks.

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

#194

Earlier quoted context omitted.

Yet another excellent read from MMM.

How many rental properties does he have? Think he just survives on being frugal and dollar cost averaging? Think again.

He publishes his family's spending every year: http://www.mrmoneymustache.com/2015/01/16/exposed-the-mmm-fa...

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

#195

And people wonder why they say Tech is out of touch. Reading the comments here is a great demonstration. Examples: > who uses savings accounts anymore? > Cash on hand or it's invested in stocks, bonds and my home. > The truth is you're losing more money by not having any of it generating higher potential yields. > the total net worth of my wife and me is many orders of magnitude greater than what our savings account…

Thank you, the comments look like something from the Onion. "Oh, I don't have any savings either, it's all tied up in my money market account, stock portfolio, house, car, and business."

When someone reads "less than $1000 in savings" and interprets it as "they must mean less than $1000 in a single investment vehicle" there's a huge empathy gap.

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

#196

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…

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...

His whole message of frugality makes zero sense in the wider context of his behaviour. He's giving advice to everyone but if everyone behaved as he did the world would end because we can't have a world where every family derives a significant proportion of it's income from two other families for zero value added.

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

#197
post #70

So 38% of Americans are have more than $1000 sitting around becoming less valuable everyday? That may be a more interesting conversation to have.

Only 38% of Americans are capable of being self-reliant in the event they miss a paycheck or two.

edit: Why the downvotes? Is there a problem with being moderately self-reliant?

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

#198
post #148

Earlier quoted context omitted.

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.

Most of my savings is invested in index funds. Pretty much all of them allow you to withdraw the full amount in 3 days or so. Granted, do you have any idea what such a scenario might look like? Odds are, it can wait. Even large medical operations if you don't have medical insurance (where I live), simply require a modest deposit before they start the operation or expensive procedure. Though I do think they ask for so…

Mostly medical costs or getting laid off are the scenarios I'd be worried about. Even if you're insured, medical bills add up and you tend to be billed very soon after care is provided.

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

#199

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?

Why?

I have over $100,000 in invested assets, spread across a diversified pool of ETFs. The only cash I have on hand is en route to my brokerage.

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

#200
post #36
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.

100k in stocks after a shock crazy crash of 70% can still be painfully liquidated for 30k.
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