62% of Americans Have Under $1,000 in Savings, Survey Finds • Hacker News Board

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

#281

Post by ghaff » Thu, Oct 08, 2015, 8:51 PM UTC

abritinthebay wrote: post #275

ghaff wrote: post #170

Earlier quoted context omitted.

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 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.

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

#282

Post by hugh4 » Thu, Oct 08, 2015, 8:56 PM UTC

Avshalom wrote: post #273

beambot wrote: post #256

Earlier quoted context omitted.

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.

That advice isn't aimed at people who are genuinely poor, it's aimed at middle class whiners who earn middle-class money and still complain that they "can't get ahead" and "will never be able to retire".

MMM has never claimed to be frugal -- indeed, he likes to talk about the "extravagance" of his $25K pa spend for a family of four.

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

#283

Post by yuhong » Thu, Oct 08, 2015, 8:56 PM UTC

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.…

I wonder what would happen if savings accounts was ditched completely at least from for-profit banks.

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

#284

Post by toomuchtodo » Thu, Oct 08, 2015, 9:01 PM UTC

fancyketchup wrote: post #271

toomuchtodo wrote: post #192

Earlier quoted context omitted.

> 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…

> 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.

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

#285

Post by Avshalom » Thu, Oct 08, 2015, 9:01 PM UTC

hugh4 wrote: post #282

Avshalom wrote: post #273

Earlier quoted context omitted.

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.

That advice isn't aimed at people who are genuinely poor, it's aimed at middle class whiners who earn middle-class money and still complain that they "can't get ahead" and "will never be able to retire". MMM has never claimed to be frugal -- indeed, he likes to talk about the "extravagance" of his $25K pa spend for a family of four.

>MMM has never claimed to be frugal -- indeed, he likes to talk about the "extravagance" of his $25K pa spend for a family of four.

And imagine how well that sarcasm goes with those of us who have never seen 25,000.

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

#286

Post by dannypgh » Thu, Oct 08, 2015, 9:02 PM UTC

rconti wrote: post #185

dannypgh wrote: post #169

Earlier quoted context omitted.

If the market declines significantly, and you're still a long-term bull (inherent to the buy and hold strategy), you probably don't want to sell until the asset recovers.

But is it worth missing out on the potential gains of 6 months' income doing nothing , just so that if you hit an emergency (by definition a rare thing) you don't sell during a down period? I mean, keeping the money in savings virtually guarantees 'losses' in real terms.

shrug maybe, maybe not. I sometimes have rather low cash reserves; credit cards and a checking account that lets me overdraft for free (via margin borrowing) can give me a bit of liquidity. But credit cards come due every month, and margin borrowing can always result in a margin call, so it certainly does feel like a risk. Having a bit of cash around gives you some peace of mind, but what's that worth depends quite a lot on the individual.

I believe there's a significant risk of deflationary times ahead - the prime rate over the last five years really makes much of that argument for me. It is not a given that keeping the money in a savings account guarantees real losses.

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

#287

Post by kristopolous » Thu, Oct 08, 2015, 9:05 PM UTC

mod wrote: post #114

howdoipython wrote: post #109

Earlier quoted context omitted.

Does it really matter what it's called?

No, it matters how it's accomplished. Socialism and capitalism differ in that regard.

correct! capitalism doesn't help those without capital.

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

#288

Post by hugh4 » Thu, Oct 08, 2015, 9:05 PM UTC

branchless wrote: post #167

ghaff wrote: post #159

Earlier quoted context omitted.

I think you're being a bit unfair. I have no doubt he is pretty frugal. That said, I'm not a huge fan of his schtick but recognize that there are people who probably benefit from the over-the-top exhortations to avoid spending money. A lot of people fritter away a lot on things that they don't need and may not even especially enjoy. Which has been my main takeaway on those occasions when I've skimmed his site. Whatev…

The frugal stuff is rubbish. He can be frugal because the main outgoing for any family is rent. He's taking in two rents. The rest is just a cheap show. The reason why we are all suffering is because of rentiers. It's not because we have slightly expensive data plans on our phone. Rentiers are using this to explain away the real problem. This guy is along for the ride for the web-clicks. Go on his site and ask a ques…

I don't see why it's an issue that he owns two rental properties. Of course he has investments of one kind or another, that's his shtick. Save money, but income-yielding investments, retire. Whether you buy properties or live off the dividends of your XOM shares (or more sensibly, do both) is immaterial.

If your point is that it doesn't scale because its literally impossible for everyone to have two investment properties -- well, yeah. Frugality doesn't scale well. If everyone else stopped buying shit they don't need and working more than they needed to, production would go down and yields of all investments would suffer. So it's not actually a good idea to persuade everyone to quit buying shit they don't need, but it's advantageous for every individual to do so.

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

#289

Post by walshemj » Thu, Oct 08, 2015, 9:10 PM UTC

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.

You sell bonds or near cash equivalents like t bills, gilts , consols etc

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

#290

Post by fluidcruft » Thu, Oct 08, 2015, 9:15 PM UTC

tootie wrote: post #34

nostromo wrote: post #10

Earlier quoted context omitted.

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.

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.

ITT the top 20% pat themselves on the back and imagine their life-bubbles are somehow similar to that of the poor. "It's the data that's obviously flawed."