A recent report says Americans are unwary when it comes to saving or investing money. According to the latest survey by Bankrate, around 20% of the US working population is not in the habit of saving money, despite the boost in the economy. Why does this happen and when did this trend emerge?
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Hi MikeyInvest, any of these topics helpful:
Calling relevant pros to the rescue! Alex-Wise Vincejackrox @bahbahblacksheep"
You're welcome.
because avocado toast.
stfu you entitled baby boomer snowflake. You can pry my avocado toast out of my cold dead millenial hands!
U literally ruined the housing market ): I can't have a 5 bedroom house in the suburbs because I work in some bitch government department
I actually fail to believe this. Not sure how people even get up in the morning and/or not end their existence. Hell, I have a good amount of net worth and still think about dancing with the reaper a few times per week.
It's even worse if you break it down by generations. https://www.cnbc.com/2018/02/09/a-growing-percentage-of-millennials-hav…</a">Almost half of "young millennials" have literally zero savings.
It's one of those issues where I'm so glad I'm not an American, especially considering I'm a millennial.
I see it. People my age working crap jobs spend their income on supposed status items like big holidays or renting in nice areas etc. Thats all good and well unless you are saving nothing, I think similar to what MonacoMonkey said it would be soul destroying living pay check to pay check.
This is probably the best comment I've seen from you Mon.
Back home, which is down yonder a lot of people work for $22/hr or less. Construction or manufacturing jobs.
$22 * 40 hours per week * 52 weeks per year = $45,760. If you're making $22 / hour in anywhere that isn't a tier-1 city, you're probably doing decently. At the very least, you should be able to save a bit of your wage that puts you outside of this 20%.
The people who have no savings are by and large those who make much less (i.e. $7-12 / hour) and people that live outside of their means.
Really the whole reason that people don't save
No, it is a reason, not the only reason.
Student loans, the changing employment landscape, never being taught financial literacy in school, etc. all contribute to the lack of savings.
I hate to be "that guy," but where is making $45k a year "doing decently" and not "the absolute bare minimum?"
70.23% of Americans make less than $50k / year. I don't know what fantasy land you live in where earning what the vast majority of Americans earn is the "bare minimum." It's easy to have a warped perspective of "normal" income when you're viewing a forum board skewed towards undergrads and people early in their career gunning for an entry level position that pays $150k.
https://en.wikipedia.org/wiki/Personal_income_in_the_United_States
Relax. I'm perfectly capable of being wrong and/or needing perspective without "living in a fantasy land."
I would argue that while the % that make less than $50k a year isn't irrelevant, it also isn't entirely relevant either. A single person at $50k is a lot worse off than a couple at $50k each. A 65 year old person in the middle of Iowa who has owned their house for 15 years is probably pretty set on $50k. A recent grad 23 year old in a "Tier 2 city" with $100k student debt making $50k probably isn't, regardless of how much avocado toast he or she buys.
I've also made that much before, personally. It was quite literally "the bare minimum" given the price of rent, student loans, etc. I'm not pulling this out of my ass.
I would also argue that a good amount of those 70% that do not qualify for government assistance are struggling. If you qualify for government assistance or have a spouse making $45-50k then you can probably be ok (relatively).
I'd imagine it would be difficult to make $42k/year - $800/week GROSS. After taxes and insurance that's probably in the ballpark of $2k/month. What could you realistically save in this scenario $100 or $200/month? Healthcare/ health insurance is the real wild card here and if you have a kid, forget about it.
It's easy to lose perspective (I do it often), but life is tough for a lot of Americans. I certainly feel that I've worked hard and earned my place in life, but I pay more in daycare expenses a month than over 70% of americans take home - thats tough.
$45K per year median for the full-time worker - and a bit higher at around $55K per year in the Bay Area. A double-income household who both work full-time and who each is purely average is completely functional.
I inherited wealth and parlayed that into more investing and savings.
Read "Capital" by Thomas Piketty.
I made 53K base, no bonus in my first year of corporate. I still saved 30% of after-tax income - in the Bay Area. I also lived an austere lifestyle. I also make a lot more now and my spending has not kept up. So my savings rate is even higher, even accounting for b-school tuition/fees to pay off.
In San Francisco where I live, it is easy to blow through 3K a month in rent. It is especially important in a city like this to save while working a high-income job. Too bad many of my friends don't have financial literacy.
You remind me of a friend of mine from high school, UCLA Anderson. You were able to save around 10-12k even with the bills?
The urge is strong to blow...I agree.
I lived in Berkeley in a 2 bedroom-2bath and paid 700 for my share. What a piece of shit apartment hearing my neighbor bang athletes in the middle of the night! I traveled 30% and hardly paid for food then.
Notice, that for the most part, anything that involves the government = huge inflation.
It (government) is the root of all (non-bodily) harm and evil in this world.
Rampant consumerism and the associated dopamine rush in many people prevent them from saving. Factor in cash back cards and promotions and they just can't resist...
Well, I keep most of the monies in the checking account...0.001% can lick it
I come from the midwest and I think most people would be shocked by how little knowledge and interest people in rural america (midwest & the south specifically) have in general aspects of personal finance. Match that with the lower income areas surrounding every major city, and the amount of millennials coming out of undergrad racking up credit card debt while they struggle with student debt payments most of them will be paying off until they are 50, I think the 20% is actually very conservative....
This is a good point.
I feel a lot of times people hear argue like everyone is an MBA with a CFA and should understand concepts. I remember some comedian said the "south" is anywhere 20 miles outside of a city, and while that's a joke it's somewhat true. The town I grew up in is an hour outside of NYC, but my friends who are still there make some dumb financial decisions that I have to hold my breath when they talk to me.
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