Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
I worked as a financial planner for a national firm when I finished college. We found a bulk of the clients were chasing returns to match their retirement or other fantasies. We had a Dr. that made 400K a year (W2 income), yet had ZERO discretionary income (rented house, leased cars, private schools for kids, etc). He had 180K in mutual funds as his sole asset. He wanted 15-20% returns so he would have more money to spend on a house. The kicker was......180K was his inheritance from a parent so he didn't even save that!
Most retire with X for assets and want to have so much spendable income on top of their social security, pension, etc. However they usually can't take the risk needed to get those double digit returns. Everyone wanted "the high returns but guaranteed too!" Also consider many boomers have had good lives (nice cars, houses, vacations) and want to keep that level of living going which is going to be hard on limited assets.
I don't make enough to save $10k but I do manage to save over $1k for emergency use. I don't have a savings account anymore because the interest earned is so little, and I keep myself on a strict budget, so the 'savings' remain inone account. The interest rate for a cd for that amount is also very little unless I locked it at a 10 year rate. Nah... what's the point of an emergency fund if you can't use it without penalty during an emergency?
I agree that most Americans don't have anything saved, having a savings account or not. Almost all of my coworkers and friends don't set any money aside to save. They do not live frugally and spend as they please while complaining how they are in debt. Most are also around my age too. Again, not surprised by the results of this survey. As long as the current society trend follows "spend now or you'll regret it later", any money they do manage to save will be gone as quickly as it came. The temptation to buy is just too alluring.
Emergency funds aside, I think low interest rates are part of the problem. There is little incentive to save if you are going to be losing money to inflation even if you have savings. It's my personal struggle as well. I can't find a "good" place to save money. I have about $20k in a savings account and now I am investing some money in individual stocks that I think will increase in value over time and that also earn dividends. Ideally, I rather not have my savings there (and I don't have much of it there--just 9% of my monthly savings goes to the brokerage fund and right now 1/3 of it is cash). But it's the only way I earn decent interest(dividends). But for the most part, I just keep dumping into that savings account for the most part wondering how to best invest.
I define retirement as not being forced to work. Having enough money saved to move away from the 9-5 rat race I am currently in. When I retire I will find something to do that produces an income but it will be something fun with no pressure.
I truly believe most people don't know what to do with their income but spend it.
low rates have put more money in the pockets of americans via debt savings than anything else .
Americans spent 5.8% of their after-tax income paying interest on mortgages, credit cards, car loans and other debt, according to the latest data from the Bureau of Economic Analysis.
That's the smallest share since 1977 and a steep drop from a record high of 9.1% in 2007.
The result: Low interest are putting more cash in the pockets of americans who 1/2 of which have no savings to get interest on .
most of those who do use bonds or equity's and were rewarded well. if you tried to fight the fed and only buy cash instruments , well then you learned cash is an asset and there are times that asset should never be your main investment , if you do owewn the wronfg asset class at the wrong time then you learn a lesson about fighting the fed and the trend .
Household interest payments fell to an average of $469 per month at the end of last year, down from a peak of $728 in 2007, after adjusting for inflation. That equals $3,100 a year.
Three-fourths of the interest savings stem from falling rates,
Mortgage interest payments are down 30% from their 2007 peak. Interest payments on other debt, such as credit cards and car loans, are down 50%.
most folks would never see 3100.00 in interest on there meager savings . most of those who do have savings end up spending it over the year to pay bills so it is always changing and going lower .
Last edited by mathjak107; 10-08-2015 at 07:54 AM..
I think the savings rate is low but to clarify what this survey says is this:
"The rate comparison website surveyed 5,000 people and found just 29 percent of them had $1,000 or more in savings account"
It does not say nor imply if the people surveyed have other money, perhaps a 401k, equity in a house, more than $1,000 in a checking account, etc. Just no savings account.
It also does not even say if the people were working age adults or how they were 'randomly' selected
The conclusion "Americans have nothing saved" cannot be deduced from this survey. I am not saying it isn't true.
I know of people that is in their 60's and have no savings and will have too work the rest of their life.
Short on savings? You're not alone.
Twenty-eight percent of Americans have nothing in their savings accounts and another 21 percent don't even have a savings account, according to a new survey from GOBankingRates. 49% of Americans Have Nothing Saved
They may be planning to work the rest of their lives, but whether or not they will is another matter. Their boss may have other ideas, their health may deteriorate, etc.
low rates have put more money in the pockets of americans via debt savings than anything else .
Americans spent 5.8% of their after-tax income paying interest on mortgages, credit cards, car loans and other debt, according to the latest data from the Bureau of Economic Analysis.
That's the smallest share since 1977 and a steep drop from a record high of 9.1% in 2007.
The result: Low interest are putting more cash in the pockets of americans who 1/2 of which have no savings to get interest on .
most of those who do use bonds or equity's and were rewarded well. if you tried to fight the fed and only buy cash instruments , well then you learned cash is an asset and there are times that asset should never be your main investment , if you do owewn the wronfg asset class at the wrong time then you learn a lesson about fighting the fed and the trend .
Household interest payments fell to an average of $469 per month at the end of last year, down from a peak of $728 in 2007, after adjusting for inflation. That equals $3,100 a year.
Three-fourths of the interest savings stem from falling rates,
Mortgage interest payments are down 30% from their 2007 peak. Interest payments on other debt, such as credit cards and car loans, are down 50%.
most folks would never see 3100.00 in interest on there meager savings . most of those who do have savings end up spending it over the year to pay bills so it is always changing and going lower .
Low interest rates put squat in the pockets of the 35% who rent.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
