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gazing from the shadows
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Discussion Starter · #1 ·
Close to half of those who earn from $100,000 to $149,999 a year have less than $1,000 in their savings accounts. Some 18 percent of them have socked away absolutely nothing.

The study, from financial services website GoBankingRates, found that those who earn over $150,000 annually don't fare much better: Some 29 percent have less than a grand in their savings, and 6 percent have nothing saved at all. The study surveyed 7,052 Americans in early August.
Make Six Figures? There's a Decent Chance You've Got Almost Nothing in the Bank - Bloomberg

So, there are a lot of people who make over 150k a year. And 35% of them have less than $1000 in savings.

I am sure many of them have assets, this survey result is just about cash savings. But how anyone making 6 figures can have nothing or next to nothing in the bank, I can't imagine. Three to six months savings is standard advice. I get why working class people can't save that, but $150,000+???
 

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gazing from the shadows
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Discussion Starter · #2 ·
I meant for this to be posted on another part of the site, but I edited it to be more loungy.

So lets talk about how stupid everyone ELSE is!

:)
 

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150K in the bay area is peanuts... I'm always amazed at how much I spend on groceries.. 1 bag=$100 bucks
 

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gazing from the shadows
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Discussion Starter · #4 ·
150K in the bay area is peanuts... I'm always amazed at how much I spend on groceries.. 1 bag=$100 bucks
I can spend that in a much lower cost place for a bag of groceries.

And that survey is for 150k+, so everyone who makes that or more.

But yes, the bay area is very expensive: I made 6 figures at my Facebook dream job ? but couldn't afford life in the Bay Area - Vox for one example. "I made 6 figures at my Facebook dream job — but couldn't afford life in the Bay Area"

I get paid 9 months, and save to live the other 3. At the end of this summer, I have $1000 left over from those 3 months of expenses. That includes paying for a trip to CO, btw.

Clearly, everyone else is stupid. :)
 

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disgruntled pigskin fan
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Some people lack financial intelligence or discipline, something not taught at school unless you go to school for a business or finance degree. I think it depends a lot on how you were raised, whether or not you had to work at all as a teen to learn the value of hard work and the worth of a dollar. My parents were incredibly hard working and very frugal, and that rubbed off on me and my brother.

My savings account is rather meager, just enough to get me by for 3-4 months in the event I lose my job. I'd rather invest my money wisely than sock it away in a savings account that yields at or less than 1% return.
 

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gazing from the shadows
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Discussion Starter · #6 ·
My savings account is rather meager, just enough to get me by for 3-4 months in the event I lose my job. I'd rather invest my money wisely than sock it away in a savings account that yields at or less than 1% return.
That's not meager, that's sufficient. Especially given other assets.

Me, pension + social security + 10% pre tax income going into a diversified portfolio + savings (fluctuates between 1 and 4 months expenses, depending on time of year).

I'm not going to lose my job, and if I do I will have over a year before the job/income stops unless I do something very stupid. But I still am ready in case the black swan hits.
 

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Unfortunately, I've met plenty of people who are "smart" in their specific degree field and have used it to get a good job, yet don't have a big picture mentality. All they know how to do is spend every last dollar of their paycheck to show off how much they make. Fancy car, designer clothes, always eating out, etc... But it's not like it's a new phenomenon. The phrase "keeping up with the Jones" wasn't coined this decade (or the last either).
 

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Some people lack financial intelligence or discipline, something not taught at school unless you go to school for a business or finance degree. I think it depends a lot on how you were raised, whether or not you had to work at all as a teen to learn the value of hard work and the worth of a dollar. My parents were incredibly hard working and very frugal, and that rubbed off on me and my brother.

My savings account is rather meager, just enough to get me by for 3-4 months in the event I lose my job. I'd rather invest my money wisely than sock it away in a savings account that yields at or less than 1% return.
Agree. How does that study define "savings"? I put $2000 a month in my 401k, but I definitely don't have 3 months worth of my salary wasting away in a savings account. That's silly.

Live in a big house you can barely afford, drive a BMW and have no savings? When your kid gets ready for college, he or she will get a grant/financial aid while that dumbass who saved for it and can afford it gets nothing.
 

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gazing from the shadows
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Discussion Starter · #9 ·
Unfortunately, I've met plenty of people who are "smart" in their specific degree field and have used it to get a good job, yet don't have a big picture mentality. All they know how to do is spend every last dollar of their paycheck to show off how much they make. Fancy car, designer clothes, always eating out, etc... But it's not like it's a new phenomenon. The phrase "keeping up with the Jones" wasn't coined this decade (or the last either).
The formula for increasing your wealth is simple: Income - expenses > 0. Clearly anyone can understand that, but so many don't act on it.

Agree. How does that study define "savings"? I put $2000 a month in my 401k, but I definitely don't have 3 months worth of my salary wasting away in a savings account. That's silly.
Savings = cash = totally liquid.

Also silly is paying the penalty if you have to draw down your 401k. That's a 10% hit on top of taxes.

Cash savings can also be temporarily depleted to make large purchases without incurring interest, given a stable income situation.
 

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disgruntled pigskin fan
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Agree. How does that study define "savings"? I put $2000 a month in my 401k, but I definitely don't have 3 months worth of my salary wasting away in a savings account. That's silly.

Live in a big house you can barely afford, drive a BMW and have no savings? When your kid gets ready for college, he or she will get a grant/financial aid while that dumbass who saved for it and can afford it gets nothing.
It's not 3 months of my salary in my savings, but 3 months of expenses to simply live; pay my mortgage, utilities and groceries. This is considerably less than 3 months salary.

I really enjoy threads like this where intelligent people offer tidbits of their financial philosophy. I always learn something new.
 
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disgruntled pigskin fan
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Savings = cash = totally liquid.
Everyone has a different take on the importance of liquidity. To me, it's not terribly important. I'm young and healthy, have a stable/reliable income and have no dependents. The bigger your household the more you should value liquidity.
 

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Agree. How does that study define "savings"? I put $2000 a month in my 401k, but I definitely don't have 3 months worth of my salary wasting away in a savings account. That's silly.

Live in a big house you can barely afford, drive a BMW and have no savings? When your kid gets ready for college, he or she will get a grant/financial aid while that dumbass who saved for it and can afford it gets nothing.
I thought the same thing about the definition of "savings". I do not have a "savings" account at a bank. We keep enough in our checking for a few months, keep some cash at home, fund IRAs, 401k and a have brokerage account. Assets far outweigh liabilities...but then I make less than $150k, so I guess that explains it. :)
 

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When your kid gets ready for college, he or she will get a grant/financial aid while that dumbass who saved for it and can afford it gets nothing.
I dont think that is the case. the financial aid formula looks strongly at income. They are well aware that people hide assets
 

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I am sure many of them have assets, this survey result is just about cash savings. But how anyone making 6 figures can have nothing or next to nothing in the bank, I can't imagine.
I can. Other than for the FDIC insurance and minimum balance requirements I can't think of a reason for an individual to have money in a bank. Businesses might need the services a bank provides but Banks do nothing for individuals that they can't get elsewhere and with better earnings.

edit: Although I do suspect overall savings statistics are rather dismal too....so your point is taken. just not with regard to banks specifically.
 

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I really enjoy threads like this where intelligent people offer tidbits of their financial philosophy. I always learn something new.
Well then enlighten me --- what have you learned? You're not saying I'm intelligent I hope. No. I don't live in a big house, or drive a BMW, just saying that incentives can be perverse.
 

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I can. Other than for the FDIC insurance and minimum balance requirements I can't think of a reason for an individual to have money in a bank. Businesses might need the services a bank provides but Banks do nothing for individuals that they can't get elsewhere and with better earnings.

edit: Although I do suspect overall savings statistics are rather dismal too....so your point is taken. just not with regard to banks specifically.
I agree this is a lousy article. I haven't the foggiest idea how they are defining savings but 100% agree that a traditional savings account is not the place you want to leave a large amount of cash. FWIW, most of my savings is tied up in Campy parts
 

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One of John's relatives was worth over a million dollars, and got taken by a man she trusted for every last dime. She can't even enjoy her retirement years.

Another relative still has student debt, despite being a doctor for the past 20 years or so. Lives in a fancy area, drives a fancy car, but is trying to figure out how to pay the rent these days.

I suspect people spend the money in accordance with where they *expected* to be. Or, they have the technical knowledge but not the common sense- that happens a lot.
 

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edit: Although I do suspect overall savings statistics are rather dismal too....so your point is taken. just not with regard to banks specifically.
I do think that's true. I've read several news stories about the dismal level of savings for retirement.
 

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Make Six Figures? There's a Decent Chance You've Got Almost Nothing in the Bank - Bloomberg

So, there are a lot of people who make over 150k a year. And 35% of them have less than $1000 in savings.

I am sure many of them have assets, this survey result is just about cash savings. But how anyone making 6 figures can have nothing or next to nothing in the bank, I can't imagine. Three to six months savings is standard advice. I get why working class people can't save that, but $150,000+???
ever live in NYC or San Francisco? I could easily explain how that's possible with housing costs, transportation costs, food, etc....$150K in NYC is lower/middle class...same with SF....
 

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gazing from the shadows
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Discussion Starter · #20 ·
ever live in NYC or San Francisco?
Los Angeles big enough for you?

You might note I posted to a story about a six figure FB worker in the bay area. Which you replied to. I read it, feel free to do so.

I also get that national surveys are national. And that 150k+ is not 150k.
 
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