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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

#211

Post by snikeris »

Nadya wrote: post #158
nemo44x wrote: post #87

Earlier quoted context omitted.

You are actually taking on more risk than if you had some invested in different vehicles. The truth is you're losing more money by not having any of it generating higher potential yields. Likewise, putting all your money in higher yielding vehicles (for instance, call options) is a lot of risk too. There's a calculus to understanding how much you should have put into different vehicles (including cash in a savings ac…

> The truth is you're losing more money by not having any of it generating higher potential yields. I'm aware of this and can account for this loss. What I dislike is an unknown potential loss that I can't readily account for. For example - if I invest $50k I need to account for the possibility I might lose the entire $50k, or a portion of it. Being realistic, I'm unlikely to lose it all, but even if I only lose $5,0…

Check out Harry Browne's Permanent Portfolio:

https://en.wikipedia.org/wiki/Fail-Safe_Investing

It's a relatively low risk way to invest.

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

#212

Post by pessimizer »

david927 wrote: post #19

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/...

It reminds me of a story about someone who misunderstood the point when she heard people were begging for bread.

"Qu'ils mangent de la brioche."

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

#213

Post by brewdad »

learning_still wrote: post #11

It is worth noting that these statistics never take into account people's retirement funds. The survey also does not ask how much people have saved, but rather how much they have in their Savings Account . Many people keep all of their money in a checking account. Hence 1 in 5 people saying they don't even have a savings account. This is a rather misleading statistic overall. But yes, most Americans do not save. They…

Here's some interesting info on retirement accounts for those 50-64.

http://www.economicpolicyresearch.org/guaranteeing-retiremen...

In short, very few Americans will be retiring at all, much less comfortably.

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

#214

Post by 6stringmerc »

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%.

Counter point:

Numerous financial experts assert the current valuations within the stock market do not reflect the underlying fundamentals; or, in other words, ZIRP allows for cheap debt in the bond markets which many firms are using to aggressively buy back stock, thereby artificially inflating the market value. Thus, "a correction" is due and his statement is still valid from a conservative investing standpoint.

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

#215

Post by byuu »

Artistry121 wrote: post #147
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…

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, the cops are always being called out to, etc.

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

#216

Post by misiti3780 »

dragontamer wrote: post #142
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

> "Fame and Fortune: Nouriel Roubini" Times Online, June 21, 2009 Nouriel Roubini lost 260% gains + dividends between 2009 and today. So... I wouldn't really count on this guy's advice at all.

that is very true, but a lot of people that couldnt afford to lose money lost that and more (percentage wise) in between march - sept. 2008. Your best bet is to put money in vanguard index funds targeted for your ideal retirement year and check it once a year - but for people that are trading single stocks/options/.etc, i think Roubini is right - he is also 55 so he is and should be a lot more conservative than someone that is in their early 20s/30s

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

#217

Post by ghaff »

patejam wrote: post #140
mod wrote: post #108

Earlier quoted context omitted.

Is there a reason, generally speaking, why you shouldn't use the excess money to pay off your mortgage faster, rather than increasing savings? (Assuming you already have enough savings to cover emergencies etc)

If your mortgage interest rate is less than your investment account rate.

After tax. Adjusted for risk.

There's also the liquidity angle (which might be mitigated on the pay the mortgage early side with a LOC).

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

#219

Post by [deleted] »

Artistry121 wrote: post #147
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…

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…

[deleted]

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

#220

Post by 6stringmerc »

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…

In a scenario where you are found at fault in an accident (eventually / as the outcome), both legal fees and the judgment of having to pay out could put immense strain on your fiscal outlook in both the short and long term. Note I picked the word "accident" because it's something that is theoretically insured against but may not be sufficiently mitigated as a personal risk. E.g. umbrella is too small.
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