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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

#271

Post by fancyketchup »

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…

> 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)

So, in other words, the landlord is selling a service? In exchange for a monthly fee, you don't have to do any of the crap (down payments, mortgages, property taxes, maintenance) it takes to own a home?

Do you view farmers the same way? If it weren't for the fact that you need to eat to survive, you wouldn't have to buy their product! And what do they do anyway? Just plant some seeds in the ground and wait for them to grow! Those damn leeches!

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

#272

Post by izzydata »

My savings account is pointless. The interest rate is about 0.01%. The question should probably be restated to get a more accurate response in how much of their own money people actually have access to in emergencies.

I have over 10k in checking, more in 401k/IRA and 0 in savings. The last time I had 1k in savings they gave me 1 cent in interest.

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

#273

Post by Avshalom »

beambot wrote: post #256
Avshalom wrote: post #222

Earlier quoted context omitted.

If you work at say Target 40 hours a week, squeak in the occasional overtime and work on every holiday you take home about 12-15k a year after taxes that's about half of what MMM gets from rent. MMM hasn't come within ten grand of frugality in his life. It doesn't strictly invalidate his message but it's a grain of salt that should not be forgotten.

I get that he earns a lot from rent. But I still don't understand the animosity. Would you be equally up in arms if he just invested in municipal bonds -- the bonds that pay for your parks, roads, fire stations, police upgrades, and schools? There are reasonable tax-free bond funds (eg. PMF) that pay >6% annually. I've read most of his posts. He harps on things like biking instead of buying a new car. Or "why spend $…

The animosity isn't specifically at MMM. People who think "have you tried spending less" is insight, thats what who we hate. Believe me poor people are way ahead of you on the spending less money idea.

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

#274

Post by abritinthebay »

Artistry121 wrote: post #162
abritinthebay wrote: post #121

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…

This doesn't parse. You just said the median household income is $51,939. That's a ton of money. I and many spend far less than that. http://www.mrmoneymustache.com/2015/01/16/exposed-the-mmm-fa... Even throwing on a mortgage payment a couple can easily afford this - and this is a lot of luxury.

You're in Missouri so that might feel like it's a lot of money because you're living in a place with a significantly lower cost of living (10% lower than the rest of the country) but also a lower median income ($45,321 last year).

So for you that median income would be a 14% increase over what you expect - in an area where your buying power is also higher than the rest of the country on average...

So I understand the dissonance.

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

#275

Post by abritinthebay »

ghaff wrote: post #170
abritinthebay wrote: post #121

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…

Without really disagreeing with a number of things you say, it's also fair to say that we have an entire article based around a question the answer to which is essentially meaningless (given how low interest rates on checking accounts are). I expect that, for a broader population, a better question would be around the size of their "emergency fund."

> 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 meaningless" and dismissing it as such is actually being out-of-touch.

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

#276

Post by tcdent »

Since this discussion turned into a conversation over semantics and investing, I'm curious to see if there are any trends in HN readership. I expect some people won't feel comfortable commenting about this so I created a poll:

What is your NET worth?

https://news.ycombinator.com/item?id=10355745

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

#277

Post by intopieces »

The articles says that "The responses are representative of the U.S. internet population, with a margin of error within 1.70 percent." They don't give us any information I could use to refute that assertion. So with that, we can assume that the people who reported <$1000 savings were not people with diversified portfolios or people who voluntarily eschew savings accounts because the interest rate is not profitable for them. It's astounding what a bubble this communitiy lives in that it could forget that most of the country doesn't have a bunch of money lying to around to invest.

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

#278

Post by zardo »

Avshalom wrote: post #239
a_c_s wrote: post #194

Earlier quoted context omitted.

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

right 25 grand--no house or car payment because he was in the right jobs at the right time and could afford to buy most families' largest expenses outright (over 50% of income between the two)--and he still managed to spend the entire pre-tax income of about 30% of american households.

Well he doesn't claim to live frugally, he claims to live an over the top lifestyle of fabulous wealth and luxury.

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

#279

Post by rtkwe »

ryandrake wrote: post #245
rtkwe wrote: post #91

Earlier quoted context omitted.

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.

Even in that unlikely scenario they'd still have access to most of their money, it'd feel pretty bad to have to sell into a 10% loss but it's not the end of the world if it's a true emergency scenario. That's also a manageable risk that you can avoid with well diversified investments.

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

#280

Post by robrenaud »

donjh wrote: post #269
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.

The thing that I don't understand about this logic is that in the event of an economic downturn or disaster, if you lost your job the market would also be on the decline - the worst time to sell. Isn't it better to keep a couple month's expenses in savings, even if only for the peace of mind?

Does it matter?

Sure, consider that $10k or whatever that you need for a couple months after you lose your job. In an economic downturn, if your stocks/bonds lose half their value, it costs you $20k of pre downturn, investment dollars rather than the $10k of pre-down turn dollars if the money was in a savings account.

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