Monday, December 26, 2016

Our Terrifying Savings Problem

The relaxing Christmas weekend went by with a lot joy.  A full belly and new gifts within eyesight were a great reminder of how lucky we are to live in this great country.  Then in typical real world fashion I got a nice reality slap in the face. As I browsed this morning for interesting financial articles I came across this right in your face article on GoBankingRates.com.

The headline read "69% of Americans Have Less Than $1K In Savings"

I broke into a panicked sweat after seeing that flash across my screen.  I thought how could this be?  Is it true my fellow Americans are that bad at saving money?


I already knew based on stats and experience plenty of Americans aren't in the best financial shape.  But to think more than 2/3'rds of us can't even scrimp together enough money to have one months rent, or a few trips to the grocery store & utility bills on hand is a bit terrifying.

Furthermore this phenomenon, while more prevalent among low income households, has found it's way into the upper echelons of society.  People with high incomes are having a difficult time saving too. Look at the percentages of people in each income bracket.   Making over $75k/yr can easily put you into a very comfortable life with zero worries.  Yet high income people struggle just as their lower income counterparts do. Just check out this breakdown by income.



Here is a quick summary of high income earners.

Percentage of people with >$1K by Income
$75k-$99k = 62%
$100k-$149K = 44%
$150k+ = 29%

Clearly it's not income that's an issue for them as they have plenty of it. It's their lifestyle choices that are causing problems.  Deciding to buy a brand new $60k pickup truck, cable TV with tons of channels you never watch, and a big house larger than all your neighbors decked out to the nines while you sip your wealth reducing Starbucks  are all HUGE DRAINS on America's ability to save. They seem innocent, but as I've written they can be big road blocks on your easy path to wealthy living. Best thing yet is even for lower income people using the same principles above can get you on the path to saving upwards of 10% of your income in no time.

All it takes is just a few better choices and you're instantly better than at least 69% of everyone else.

If you don't keep what you earn you never get to invest it.  It's not a huge secret to success and every self made rich person will you tell that.  You keep as much as you earn as possible by figuring out ingenious ways to save, and throw in a small bit of sacrifice along the way.

What do you do with the savings?  INVEST IT!!!  Buy a diversified portfolio of stocks, bonds, investment real estate, or put it in a good 'ol fashioned savings account.  Just don't spend it!!! Before you know it one day you wake up a millionaire. It doesn't happen over night, but it happens to plenty of people.

If you don't read the articles linked above let me sum it up for you really quick. Ride your bike instead of driving(the earth thanks you), never buy a new car or one at all if you can avoid it, cancel your cable, live in a reasonably sized house, and make your coffee at home. Those aren't all the ways you can save money, but you have direct control over these optional expenses. 

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There's a lot of work left to be done to fix America's problems. It takes a lot of guts to tackle everyone's investing and spending issues. Not a lot of people in the finance world have what it takes.  They only want to focus on the investing side and leave you in the ocean without a life raft for everything else.  NOT HERE. We are fully equipped to handle all your investment, retirement, and SPENDING needs.  If you don't want spending advice that's totally fine and up to you.  We'll gladly do our best to help you reach your investing goals.  Just know there is always someone there willing and ready to be by your side when you do.

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