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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

#331

Post by morgante »

Laaw wrote: post #316
morgante wrote: post #180

Earlier quoted context omitted.

Not even the worst stock crash in history was a 99% drop. Also, you are almost 100% wrong about the intention of the article. It's not that they're trying to make some point about people's poor asset allocation, it's just sloppy reporting. If their actual point was that people had too much money invested, wouldn't the most obvious and actionable advice for the "What to Do If Your Savings Fall Short" section be to sel…

The attitude you're bringing to this conversation makes me entirely unwilling to continue. Sorry.

I think you're the one who might need an attitude adjustment. Instead of providing reasoning for why cash is necessary, you continue to belittle people who invest their assets.

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

#332

Post by toomuchtodo »

morgante wrote: post #330
toomuchtodo wrote: post #313

Earlier quoted context omitted.

Insurance companies and banks are required to maintain a minimum amount of safe/liquid (read: cash) reserves. > I would genuinely love to hear a good argument for why keeping any cash assets when one has significant liquid investments, Can you describe an asset (besides US treasuries) that you can be assured of its value in a volatile market? Even money market funds have broken the buck before (~2008).

> Can you describe an asset (besides US treasuries) that you can be assured of its value in a volatile market? My point is emphatically not that your stocks will maintain their full value. But even at their lowest, their value will be more than enough to cover any emergency fund. A 50% drop on $100k will still leave you with $50k.

Which would ruin your investment outcome for years (if not decades, depending on the value of your portfolio at the event in question). If stocks take a loss that bad, you need the ability to not sell off to get liquid cash. That is what an emergency fund is for.

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

#333

Post by zeckalpha »

Avshalom wrote: post #251
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…

>, and even if they tried, they probably couldn't For instance near as I can tell it takes like 10 grand to get into an index fund. Even if that didn't represent years of savings for most families there are so many things that 10 grand needs to be used for before [[2-5%/y return on investment over 20-30 year period IF the market doesn't crash shortly before you need to start drawing on it]] is a compelling propositio…

https://www.betterment.com/ has a much lower minimum, but your point stands.

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

#335

Post by branchless »

kamaal wrote: post #329
branchless wrote: post #184

Earlier quoted context omitted.

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…

>>Because rampant consumerism isn't the issue. Sorry to break the bad news to you, but rampant consumerism actually is the issue. >>Most families are responsible with their money. No, in fact their spending decision don't even remotely reflect any sense of responsibility. >>Their greatest expense? If you think, smaller delta spending doesn't matter. Alas, I'm sorry that's the whole point behind indulging into consume…

Housing money is not earned. It's made out of nothing by banks and then used to put a claim against a significant portion of a person's salary. As lending standards get looser prices go up.

Land speculators and money men capture all productivity growth.

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

#336

Post by kelukelugames »

zeckalpha wrote: post #334
kelukelugames wrote: post #156

Keep in mind median household income is below 60k. This isn't surprising. I wonder what the statistics for our social economic level are.

"our"?

I bet most people on here make more than 50k a year.

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

#337

Post by kamaal »

branchless wrote: post #335
kamaal wrote: post #329

Earlier quoted context omitted.

>>Because rampant consumerism isn't the issue. Sorry to break the bad news to you, but rampant consumerism actually is the issue. >>Most families are responsible with their money. No, in fact their spending decision don't even remotely reflect any sense of responsibility. >>Their greatest expense? If you think, smaller delta spending doesn't matter. Alas, I'm sorry that's the whole point behind indulging into consume…

Housing money is not earned. It's made out of nothing by banks and then used to put a claim against a significant portion of a person's salary. As lending standards get looser prices go up. Land speculators and money men capture all productivity growth.

I'm not sure what you are talking about. Price of a house is not some thing banks get to decide, at least not directly. They only get they to decide the amount of interest they should collect to stay profitable after lending you money that you borrow to purchase a house.

Price of a house apart from the raw materials depends on various thing like supply-demand factors. But that is the case with any investment.

If you are having problems with investments in general where people can get rich by starting small but growing non-linear with time, then you are literally ruled out to ever be rich.

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

#338

Post by ryandrake »

UK-AL wrote: post #257
ryandrake wrote: post #245

Earlier quoted context omitted.

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.

You don't put that money in a stock market. And than it goes up by 10%. What's worse? Either way you've lost money you could have had. Humans tend to be loss averse though. In both situations you probably have liquid equivalents at hand

Losing 10% is clearly worse than losing 0% while watching someone else (irrelevantly) gain 10%.

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

#339

Post by hwstar »

ac29 wrote: post #320
hwstar wrote: post #318

Earlier quoted context omitted.

CD's are terrible investments at the moment. A 1 year CD doesn't offer a much better rate than a FDIC money market account, and I certainly would not invest in a longer term CD at the moment. When interest rates tanked, I moved all of my CD's to money market accounts when the term was up. What is key is to only open a money market account at an institution with a long term track record of staying above average on rat…

A 1 year CD is a terrible investment, but a lot of 5 year CDs have very generous early withdrawal penalties. Unless you are making over 2% in your FDIC-insured money market account, a 5 year CD is probably a better investment.

The withdrawal penalties can be anywhere from 6 to 30 months interest for a 5 year CD. 6 months seems pretty rare with only a few institutions offering it.

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

#340

Post by [deleted] »

toomuchtodo wrote: post #192
ghaff wrote: post #179

Earlier quoted context omitted.

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…

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