Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

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

gobankingrates.com

Post reply on HN
Print view View original

241–250 of 370 posts

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

#241

Post by km3k »

greglindahl wrote: post #48
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.

My Internet bank doesn't even offer savings accounts -- all accounts are checking.

Plus, there's not a lot of difference between the interest rates of savings and checking accounts these days in general, so there's not a lot of difference between the two.

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

#242

Post by brianclements »

byuu wrote: post #215
Artistry121 wrote: post #147

Earlier quoted context omitted.

The average standard of living is going up. Things get better all the time. Many people in debt have nicer cars than people did 20 years ago. The sad thing is people choose to buy new cars rather than the perfectly functioning old ones and higher quality food. Or people without large families choose bigger houses rather than perfectly acceptable ones that two generations ago couples with 7 kids would fit in. A very g…

> Or people without large families choose bigger houses rather than perfectly acceptable ones that two generations ago couples with 7 kids would fit in. I think about this myself. I have a house that's probably three times the size I need. But I bought it because it got me into a nicer neighborhood. All of the affordable, two-bedroom houses are always in really seedy neighborhoods where cars are always broken into, t…

That's another great point, the more expensive house might not be because of size, but because of the strengthening bind between where you live and what that means for your chances at upward mobility.

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

#243

Post by brianclements »

6stringmerc wrote: post #231
brianclements wrote: post #29

So many people live paycheck to paycheck that saving is just this intangible concept that "wealthier" people do. No one they know saves, no one taught them to save growing up, and even if they tried, they probably couldn't. Cost of living has outmatched wage growth; it's a mess. On the personal responsibility side of it though, I'm willing to bet that over recent decades, another thing that has also inflated is many…

Your perspective is one that I share, on the nature of class-based economics in a 'consumer' society such as the modern United States. I'm going to copy/paste a summary that I sent to a former co-worker (CFA Level 3, >$6B AUM) for his thoughts and he felt I did an okay job (made me feel smart). So demographically, older workers have not saved enough for retirement. That drives them to maintain employment. With a lack…

That covers pretty succinctly a big chunk of a very complex problem. Thanks for that.

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

#244

Post by branchless »

whyleyc wrote: post #234
branchless wrote: post #196

Earlier quoted context omitted.

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.

Of course you can't have a world where everyone becomes a landlord, but that doesn't mean this is a completely invalid form of income generation for some people (that's the benefit of being able to take a nuanced view of advice from others). It seems like you are being reductive and misleading in characterising his position - First you argue he won't dare talk about rental income, then when examples emerge of him doi…

No the more, more, more is from the rentier. They set the rent not at the cost to deliver but at the cost the market will bear. Which is the money left over after food/fuel which puts everyone living hand to mouth with no money in their savings accounts.

God he does p2p lending also. Yuk.

However let's get this straight, there are plenty worse than him out there but I do hate to see his holier-than-tho "be frugal" when in fact he's a rentier who can be "frugal" because he's a rentier.

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

#245

Post by ryandrake »

rtkwe wrote: post #91
ryandrake wrote: post #69

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.

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'.

But stocks are risky. Murphy's Law strikes and your stocks are all down 10% when you need the money the most. That doesn't sound like the way to go for an emergency fund.

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

#246

Post by scoreponok »

enoch_r wrote: post #132
misiti3780 wrote: post #82

Earlier quoted context omitted.

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

Since June 2009, when that interview was conducted, the S&P500 has more than doubled, not including dividends, so I hope he switched back or he did, in a sense, "lose" 50%.

This is hindsight bias. The markets could have easily went the other way. Market timing is notoriously futile. If you want to play "what if?" and pick arbitrary dates then he could have as easily put his cash position into equities lets say beginning of October 2008? Then his advice would seem very wise indeed.

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

#247

Post by johnward »

ChuckMcM wrote: post #93
ryandrake wrote: post #69

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.

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 l…

If you have a 401k you could potentially borrow against it if absolutely necessary. My plan allows 4% loans in which I pay myself the interest and a very small fee goes to the plan holder. I'm assuming the 6 months of living expenses is an extreme situation.

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

#248

Post by UK-AL »

msandford wrote: post #237
UK-AL wrote: post #171

Earlier quoted context omitted.

Because in diversified portfolio, to loose it all the following must happen. All listed companies must have completely collapsed. Goverment must have basically collpased to loose all value on the bonds. If that happens its probably the financial amagedden anyway. If the stock market falls by 50% i still have 70% of my portfolio. I'm OK with that.

Right but these days there's a lot of correlation between assets and all the big moves happen in response to monetary policy. In an environment where everything doesn't hinge on extremely low interest rates I'm in total agreement, but you're really exposed to policy risk in the market right now.

I agree that many assets are now correlated stocks and bonds for example.

But for a bond to go to absoulte 0, would take a lot.

Also I'm not sure that small increases in the interest rates would that much of a disaster. We've been in situations with low interest rates before, and increments in the interest rate didn't harm stocks in the long term.

In many ways it's a positive indicator, that goverments see a positive future.

When the fed announced that the interest rates were on hold. Stocks went down.

There is a lot of lose money in the system though from low interest rates.

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

#249

Post by cheriot »

It's not just the ability to save, the return on savings, but also the ability to draw on credit that discourages savings.

The permissive rules that allow credit cards to bypass state regulations make it easier for them to encourage this kind of precarious situation.

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

#250

Post by nommm-nommm »

runako wrote: post #208
nommm-nommm wrote: post #163

Earlier quoted context omitted.

>most financial advisors do not recommend that you keep a significant portion of your assets in savings accounts. This, of course, depends entirely on the individual and their circumstances.

Obviously, if you're planning on using 85% of your assets in the very near future, that's an exception. But in general, if your financial advisor suggests going 95% cash for the long haul, you should probably get someone else.

I have less than "recommended" (depending on who you ask) in an emergency fund (but I do still have one). Why? I have a spouse with a large income and it is doubtful crisis will hit us both at once. I also can reduce my spending without a problem in the short term - most of my spending isn't fixed expenses it is experiences that can be curtailed very easily. Someone with a large mortgage may want to keep more in their emergency account - that's all I'm saying. Age has a lot to do with it also - if you are young you can ride out large dips in the market.
Post reply on HN