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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

#361

Post by adebtlawyer »

lmm wrote: post #357
kdamken wrote: post #315

Earlier quoted context omitted.

Yes, we all have bills that need to be paid. But many people (especially those who aren't making great money) continually and stupidly buy stuff they don't need, not even realizing they can't afford it. You make 35k a year? Then you really shouldn't be buying a brand new iPhone with a large data plan, or a new car with monthly payments that eat away at your already limited income. Or maybe instead of going out for lu…

You're right that I don't know MMMs specifics. But I think at this stage I'm justified in being skeptical of anyone who claims to be self-made - far too many people gloss over their inherited advantages. It's possible he's one of the exceptions. No doubt much of his advice is correct, and all of it well-intended. But one has to be careful about advice from people in very different circumstances. They can get it disas…

> their rental income is usually taxed at a lower rate than ordinary earnings.

Not in the US. Rental income is income. I think you may be referring to deductions, which exist, but are not nearly as advantageous as taxing rental income at a lower rate outright.

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

#362

Post by stuxnet79 »

habosa wrote: post #254

There is a lot here about the interpretation of "savings account" and I agree that it is problematic. I have 10x as much in investment/checking as savings. However I don't think that fixing the semantic issues would change the overall issue: the distribution of wealth is even more skewed than the distribution of income. Most of this country would be utterly ruined if they got into a car crash and owed $10k to medical…

I applaud you trying to maintain perspective because a lot of people lack it.

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

#363

Post by Vraxx »

agentgt wrote: post #102

To me savings is liquid cash that you have on hand. It is an emergency buffer account. Every month (or whenever I get paid) since I have been employed or my wife has I have had money taken out of our checking account and put into another account. It doesn't really matter that its savings or checking account but that I can get immediate access to the account. When the account has gotten too big we just apply some of t…

How long is a "significant amount of time"? If it's anything less than a month a credit card could cover that with 0 interest right?

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

#364

Post by msallin »

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.

If you meet the income requirements (>$116k if single, >$183k if filing jointly), you can contribute up to $5,500 per year into a Roth IRA which can also double as an emergency fund if need-be. You can withdraw all your contributions with zero penalty anytime for any reason. You just can't withdraw your earnings on those contributions without a penalty.

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

#365

Post by msallin »

zo1 wrote: post #148
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.

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…

Sure, you could liquidate your investments if need be, but you'll get hit with high short-term capital gains taxes if you sell equities you've held for a year or less. If held longer than a year, you'll pay long-term capital gains taxes, which are substantially lower.

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

#366

Post by washadjeffmad »

nostromo wrote: post #10
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.…

Also, the article title is very different than the actual survey question: > How much money do you have saved your savings account ? That's a very specific question. A person with $5k in their checking account or a person with $100k in a retirement account might still answer that they have no savings.

I just encouraged my SO to move what she'd held in savings to start off her retirement. Now her savings account is just a small emergency buffer with automated minimum monthly transfers to prevent maintenance fees.

The only reason I still have a savings account is because I expect interest rates to go up again at some point in my lifetime, and, as petty as it is, I didn't want my credit score to take that temporary dip for closing the account.

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

#367

Post by toomuchtodo »

kamaal wrote: post #343
toomuchtodo wrote: post #284

Earlier quoted context omitted.

> Do you view farmers the same way? Providing food for free is next on my list. I don't need labor. I just need clean energy and automation.

Why not ask the whole world to slog themselves to death and serve you for free? If they refuse to condemn themselves to such, you can always call them evil.

I didn't quite get your comment. Did you have a problem that I'm trying to avoid using labor at all costs to achieve my goals? I don't think its wrong to give everyone what they need to survive without them needing to work if I don't need labor to do it. Perhaps you could enlighten me?

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

#368

Post by agentgt »

Vraxx wrote: post #363
agentgt wrote: post #102

To me savings is liquid cash that you have on hand. It is an emergency buffer account. Every month (or whenever I get paid) since I have been employed or my wife has I have had money taken out of our checking account and put into another account. It doesn't really matter that its savings or checking account but that I can get immediate access to the account. When the account has gotten too big we just apply some of t…

How long is a "significant amount of time"? If it's anything less than a month a credit card could cover that with 0 interest right?

There is a surprising amount of things that don't take credit cards particularly emergency house repair. There was another time when I had to put a down payment right away or else some one else would buy it. I suppose that is not that much of an emergency but I still think it's good to have a reserve with auto deposit.

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

#369

Post by jdenning »

branchless wrote: post #350
kamaal wrote: post #344

Earlier quoted context omitted.

>>Your perspective seems based on the idea that housing (shelter) is a basic need and should be provided for There is a very unfortunate problem with this line of thinking. It takes a lot of effort/money to build a house. You need to procure raw materials, pay for human labor and various other expenses, this is apart from acquiring land. And the problem with this kind of 'equality for all' argument towards housing is…

This is so wrong it hurts. The cost of the "house" is the land. Building houses has never been cheaper. Just like everything else has never been cheaper.

I don't think this is correct - construction costs are currently below the all-time peak, but they have been steadily increasing. According to the National Association of Home Builders (NAHB):

"The average construction cost of a single-family home in the 2013 survey is $246,453. This average is significantly higher than the 2011 average construction cost of $184,125, and is the highest it has been since 1998. Although the cost of construction per square foot remained relatively stable in 2009 and 2011 ($82 per square foot, and $80 per square foot, respectively), it jumped to $95 per square foot in 2013."

Also, regarding the relative impact of land cost vs construction costs:

"NAHB’s most recent construction cost survey (conducted in August and September of 2013) shows that although lot sizes are shrinking, both the cost and size of the home are on the rise. The average home in our survey was built on 14,359 square feet (about a third of an acre) of land, had 2,607 square feet of finished area, and sold for $399,532. The average share of the home’s sales price which goes to construction cost jumped from 59 percent in both 2009 and 2011 to 62 percent in 2013. Finished lot costs, accounting for the second largest share of the sales price, dropped from 22 percent in 2011 to 19 percent in 2013."

The situation might have changed since this survey in 2013, but this is the most recent information I was able to find.

EDIT: Source - http://nahbclassic.org/generic.aspx?genericContentID=221388

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

#370

Post by abritinthebay »

ghaff wrote: post #281
abritinthebay wrote: post #275

Earlier quoted context omitted.

> I expect that, for a broader population, a better question would be around the size of their "emergency fund." Which other studies have revealed is "basically $0". This question is highly correlated with what you are referring to for the average American. You're just in a bubble so you don't see the relation because it's not related for you . That's ok, but what I'm pointing out is that it's not "essentially meanin…

I think you're probably right that you could ask this question in a number of different ways and come up with at least highly correlated results. I'm not arguing with you. However, as someone involved in surveys among other things as part of my work, I do think precision matters. Otherwise, interpreting the results lead to exactly the sort of arguments you're seeing on this thread.

That's fair in general but this kind of stuff ALWAYS comes up on this topic on HN. It's derailing behavior.
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