49% of Americans saving zilch for retirement (payoff, invest, returns, rating)

[Dollydo]

I believe that there is always something that can be cut out of my monthly expenses. I also know that one does not have to save a fortune every month, it takes dedication over a long period of time and compounding interest. Investing is not about simple interest, it is about compounding interest.

So, for the long term, componding interest can enhance any saving program, as little as $100 per month for 40 years can turn into a nice chunk of change.

This is just food for thought, nothing more.

[mathjak107]

using the permanent portfolio mix i follow it has returned over 9% a year cagr for 35 years. the past doesnt mean it will do it going forward but it was what it was.

the other mix i follow from fidelity insight has done even better and for the more than 25 years i have been following it the mix it has averaged closer to 10%

[andywire]

Originally Posted by Dollydo

I believe that there is always something that can be cut out of my monthly expenses. I also know that one does not have to save a fortune every month, it takes dedication over a long period of time and compounding interest. Investing is not about simple interest, it is about compounding interest.

This is just an example of compounding interest, I do under understand that earning 12% interest today is at best a dream...so for the sake of conversation, lets divide it in half...still a nice chunk of change.

If you save $100 a month for 40 years (and you never touch it) and your investments compound at 12% a year how much will you have?

The answer is an astonishing $980,000! Compound interest works on 2 variables-time and rate, the longer your money has time to grow, the faster it will grow.

This is just food for thought, nothing more.

Well, I believe you would be an excellent candidate for the task of educating the lost 49%. And if this 49% figure is true, it may very well be late for many. So the question becomes... What do we as a society do or provide for them? Perhaps old people concentration camps?

[treasurekidd]

If you saved $50/month for every working month in a 30 year career, you would have 31K. Hardly enough to last much of a retirement. Supposing you get 5% return on that along the way, your still going to come up plenty short.

Andy, the true magic of a 401K plan is not the return that you get from your investments - it's the employer match!! My company matches dollar for dollar up to 5% of my income. So by contributing 5%, I am effectively saving 10% of my income, and that employer match is money that NO ONE can afford not to take advantage of. And Mathjak is correct, 5% is a crappy return, and should be easily bettered over time by someone who takes the time to educate themselves about their investments and actively manages them. Most people don't bother to do this, which brings us back to priorities.

[mathjak107]

Originally Posted by andywire

Well, I believe you would be an excellent candidate for the task of educating the lost 49%. And if this 49% figure is true, it may very well be late for many. So the question becomes... What do we as a society do or provide for them? Perhaps old people concentration camps?

i have been trying to educate folks for more than a decade now through articles ,interviews and forum postings. hoefully i got through to some.

[andywire]

Originally Posted by treasurekidd

Andy, the true magic of a 401K plan is not the return that you get from your investments - it's the employer match!! My company matches dollar for dollar up to 5% of my income. So by contributing 5%, I am effectively saving 10% of my income, and that employer match is money that NO ONE can afford not to take advantage of. And Mathjak is correct, 5% is a crappy return, and should be easily bettered over time by someone who takes the time to educate themselves about their investments and actively manages them. Most people don't bother to do this, which brings us back to priorities.

Many American employers today do not offer matched 401K. That sounds like a dream to many, but a large number of employers cut that out a few years back. It's also pointless to talk about what the American public should have done. Hindsight is 20/20, but here we are today.

And when it comes to Americans and self education... Cmon, we're talking about people who would much rather focus their energy on watching American Idol and sports than learn about boring investment options. To a surprising many, that stuff simply doesn't make sense. And your suggesting they put their hard earned money into it? That would be akin to throwing darts at a wall of stock tickers. And are they going to weather the wild volatility? When they see they lost 20% on paper, and see the dollar figure of such a loss, how many are going to be able to resist the urge to head for the exit?

As always, there will be winners and losers. 49% are on the path to loosing, while 51% are on the path to winning. Sounds about right to me.

[andywire]

Originally Posted by mathjak107

i have been trying to educate folks for more than a decade now through articles ,interviews and forum postings. hoefully i got through to some.

Perhaps you can rest easy knowing you got through to those that took the time to read, and took the time to take an interest in putting themselves in a better financial position. You can't win a game if you don't show up to play.

[mathjak107]

Originally Posted by andywire

Many American employers today do not offer matched 401K. That sounds like a dream to many, but a large number of employers cut that out a few years back. It's also pointless to talk about what the American public should have done. Hindsight is 20/20, but here we are today.

And when it comes to Americans and self education... Cmon, we're talking about people who would much rather focus their energy on watching American Idol and sports than learn about boring investment options. To a surprising many, that stuff simply doesn't make sense. And your suggesting they put their hard earned money into it? That would be akin to throwing darts at a wall of stock tickers. And are they going to weather the wild volatility? When they see they lost 20% on paper, and see the dollar figure of such a loss, how many are going to be able to resist the urge to head for the exit?

As always, there will be winners and losers. 49% are on the path to loosing, while 51% are on the path to winning. Sounds about right to me.

theres just a total lack of education and most just believe their own bull-shi%..

they blindly throw money into stocks or stock funds and take on more risk then their own pucker factor allows.

then they blame everything and everyone else for their losses and failure.

few gather up enough knowledge on their own to make good decisions so they just copy or listen to other mis-informed people.

there is always excuse after excuse why they have nothing even though their peers around them who do learn are successful on the same income.

[Mojave82]

Originally Posted by andywire

As always, there will be winners and losers. 49% are on the path to loosing, while 51% are on the path to winning. Sounds about right to me.

True, but in todays society where everyone gets a trophy. The 51% will be expected to share with the rest. I dont mind a helping hand but the free handouts have got to stop.

[mathjak107]

we also feel the same ,we dont mind helping those in truely in need.

thats usually not the case though. most that end up in need caused their own financial suicide by bad decisions,not trying, over spending, lack of interest and knowledge or did not even bother to try.

they could have worked 2 jobs if they needed to but chose not to spend the extra time dong that.

there are loads of success stories i see here all the time by people who had nothing , earn little but do what they need to do to insure their own financial well being without being a burdon on the rest because of their lack of caring how they end up..