Social This can't be right (Americans saving habits)

SalvadorAllende said:
Yes.. and I think it happens because US economy has been good for them for too long. After living a couple of years in Argentina, most people would know how to budget and save money.

We spend about 60% of our income at home and the rest goes for investing and saving.

I think the key is to look for the things that make you happy and rely on them... unless that is buying expensive shit of course. I need a gym membership and to go once a week to have a cup of coffee with my GF to a nice coffee shop and a couple of bucks ocasionally to go out with my friends and I'm set.

Last year we bought an apartment cash and put it to rent because fuck it. We will have that fixed income for the rest of our life and we were not using that money.


More likely below your means.
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None of this is true , you live in a shelter with raccoons
 
Bornstarch said:
Live within your means. Follow this rule and you will be a millionaire.
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Hot shit.

It takes much more to become a millionaire than live within your means. Most millionaires had a solid family and base to begin with. That doesn’t mean you cannot be successful and happy outside of being a millionaire. It’s a horrible idea to present to someone. Millionaire or bust. Though I’ll take this over people who have never lived a hard life and been exposed to other’s hard lives talking about data this and that.
 
ObsoleteSoul said:
Hot shit.

It takes much more to become a millionaire than live within your means. Most millionaires had a solid family and base to begin with. That doesn’t mean you cannot be successful and happy outside of being a millionaire. It’s a horrible idea to present to someone. Millionaire or bust. Though I’ll take this over people who have never lived a hard life and been exposed to other’s hard lives talking about data this and that.
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No, you are wrong. The largest ever study conducted on millionaires was conducted by the Ramsey foundation and had a sample size of over 10,000 millionaires

90% of all the millionaires in the country become millionaires on average at the age of 62

And they become millionaires because of their retirement funds like 401ks
 
Bornstarch said:
No, you are wrong. The largest ever study conducted on millionaires was conducted by the Ramsey foundation and had a sample size of over 10,000 millionaires

90% of all the millionaires in the country become millionaires on average at the age of 62

And they become millionaires because of their retirement funds like 401ks
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Yes, that is different than a millionaire in their 20s and 30s, and even 40d and 50s. That money is tied up. That is not money to use NOW. That is the difference. Most people do not stay in their bracket forever. Most poor people they are speaking of will not be millionaires in their working lifetime if at all. To say that sort of thing is a bit disingenuous. Most millionaires did not start off poor, so it didn’t contradict what I said.
 
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Jack Reacheround said:
So all of these millions of people in America each, independently, just made the same bad choices when it came to their finances, and there was no economic driver for that happening except, what, stupidity?

No. Wealth distribution is measurable, and has clearly become increasingly skewed since 1980. To suggest that wealth being transferred from the lower classes to the top 20% has no effect on the populace’s marginal propensity to save, well I would have to see very compelling evidence to prove that.
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By and large, yes, poor people make very consistent and similar money mistakes. Also, while it’s true that the wealth gap is bigger than it was in the past, that’s mostly because the people at the top got richer, not because the poor got poorer. Finally, wealth doesn’t get distributed, it can only be redistributed once successful people have accumulated it.

I’m not claiming the system is perfect but no system is.
 
It's a perfect shitstorm. Cost of living is fucked, but spending habits are also fucked. I don't think either can be fixed.
 
I guess it's a bit lower than I expected, but I don't find it shocking either. I remember similar articles several years ago and the economy and CoL has got worse since then (though I'd guess some people had a little more savings for a while due to lockdown forcing them to spend less. But others would have less savings, due to their income reducing on furlough/redundancy).
The mainstream culture is one where people leave home at a young age, before they're 20yo. If housing costs are high, then people won't have lots of spare money. Plus combine it with psychological and social pressure to conform with consumerist standards (psychological being pressure felt from within, social being that people do judge others on how much they keep up with consumerism or changing cultural trends, some of which require money to keep up with and all of which require time to keep up with. What was cool or important 5 years ago isn't now, in terms of products, activities, social attitudes or fads (like how everyone cares about X social/political issue loads, then moves onto something else months later. It's very transient)).

Perhaps some of them also don't bother saving because they rightly or wrongly believe saving money won't allow them to hit the next threshold of being able to afford major things, like a house. When you save you're sacrificing some of today's quality of life for your future quality of life to be better. Eg you save now, get a mortgage and then have more housing security, independence (to do what you want in your home) and lower housing monthly payments. Well, if people save for years but still can't afford a home, they arguably sacrificed their short-term quality of life for no real payoff. The lack of saving could be a rationally-decided choice (whether it was the correct conclusion or not).
 
Bornstarch said:
No, you are wrong. The largest ever study conducted on millionaires was conducted by the Ramsey foundation and had a sample size of over 10,000 millionaires

90% of all the millionaires in the country become millionaires on average at the age of 62

And they become millionaires because of their retirement funds like 401ks
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It’s difficult to become a millionaire and there is no clear definition of a millionaire, which makes it tougher to quantify.

Make a million a year
A million in total assets that are locked
A million in assets that are liquid

The first and last are extremely hard to achieve, especially if younger.

It’s like telling your kids to be a doctor and live a comfortable life, but in reality, a very small minority can do this.

If you do make it before sixty, you’re probably in the small minority.
 
GSP_37 said:
Maybe schools should teach kids basic personal finance instead of how to play the flutophone.
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I made a thread about how the education system should teach kids some basic practical life skills they'd use their whole life instead of the nonsense I was taught and some posters got mad at me lol.
 
I have 6 months to a year. But I had a way larger nest egg before my kids went to college and hyperinflation hit. My groceries are double. My wife's car insurance is double. My wifes truck payment is a few hundred more a month. (Luckily I have a company car). My property tax is 4k higher than 5 years ago. The places we go to eat are all 30% higher. Little things like a case of beer is $8 higher now. All that adds up. My pay did not increase with the inflation, which is why I asked for a raise.
 
Most of it is just poor money management. My wife was horrible with money when I meet her. I had to help her clean up her debt. She's still not the best but much better with it now.

When her mother got her CC's stolen I realized where she learned it from. Her mother called every single CC company at my house and each one of them had a balance of over $2k and it was like 4 different CC's. I couldn't understand it and the worst part is they waste their money living in the city cause she wants to be close to her mom and have a small 2 bedroom house. I told my wife why don't they move farther out and get a 1 bedroom apartment but they didn't want to do that.

People have this idea that if they don't want to do it they just wont do it and consequences be damned. Even when I was making good money I still lived in the same apartments where I was making $12\hr. I still had my cheap corolla and I just saved up until I could get a house.
 
Honestly, nowadays I keep only about $5,000.00 liquid personally. Granted, I can take a draw from the company whenever and typically keep $20k+ in there. We also have a HELOC that always has funds available for anything big. Any other funds I'd rather pump towards investments or paying down current HELOC balance.
 
Oblivian said:
Honestly, nowadays I keep only about $5,000.00 liquid personally. Granted, I can take a draw from the company whenever and typically keep $20k+ in there. We also have a HELOC that always has funds available for anything big. Any other funds I'd rather pump towards investments or paying down current HELOC balance.
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That's good that you have the business account to draw from. My Roth IRA contributions are my new high earning liquidity if I have to go that route.
 
method115 said:
People have this idea that if they don't want to do it they just wont do it and consequences be damned. Even when I was making good money I still lived in the same apartments where I was making $12\hr. I still had my cheap corolla and I just saved up until I could get a house.
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This is very true. People absolutely refuse to make sacrifices to get ahead. I ate a shit sandwich for a good 1-2 years back in 2009 when I bought my house. I was legit paycheck to paycheck making $10/hr. Eating rice and chicken or cheap TV dinners nearly every day. Rarely used the heater/AC throughout the year. I didn't go on a single vacation either.

Fast forward 16 years and my mortgage is 2.5x cheaper than rent is for a 2bd apartment and my house has gone up almost 300%.

The key to it all was not having a car payment. My other buddy that had an older car was able to buy in 2010. The rest of my friends all had newer vehicles and they either couldn't buy a house until they were married and had dual income or they're still living in apartments. One of them still lives with his parents and he makes a little more than I do.
 
TeTe said:
That's good that you have the business account to draw from. My Roth IRA contributions are my new high earning liquidity if I have to go that route.
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I don't know if this is the same for everyone, but with the new site, I can't differentiate your signature from the actual post. For a second I thought that you somehow invest in "Butts. Big Brazilian butts." <DCWhoa>
 
Oblivian said:
I don't know if this is the same for everyone, but with the new site, I can't differentiate your signature from the actual post. For a second I thought that you somehow invest in "Butts. Big Brazilian butts." <DCWhoa>
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Haha, you're like the third person that has said something about that.

Believe me, I have no issue in investing in Brazilian ass... Let's bring the market to the US while we're at it <{yearp}>
 
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