4 ms·

> My savings target is always 50% or more. This is a pipe-dream for most workers. Salaries just aren't high enough in many industries or places in the world to

> My savings target is always 50% or more. This is a pipe-dream for most workers. Salaries just aren't high enough in many industries or places in the world to be able to put away 50% of your earnings and still live comfortably (or even not comfortably).

epicgiga 7y ago
Place in the world doesn't affect margin (%) -- if you work in London you'll make more than in Lahore, but your landlord is making the same "more" in turn. The goal isn't to live comfortably, it's to live minimally, to open up margin so you can spend time upskilling and trying to get higher paying jobs. I get that 50% is hard. I don't enjoy it myself, but I've been broke before and I've had really crap jobs before and so now it's fear that makes me save that rate. Rather than having my apartment be twice the size, I'll take a smaller one and funnel the surplus into my skills and my business pursuits, which in turn raises income and thus margin further, in a virtuous cycle. I just don't buy all the people saying a few percent is the absolute best they can do. Usually they're buying things, which I get -- the pleasure of those things are like the "reward" of the painful work hours. I think if they tried harder they could hit at least 25%. After a year that gives you a 4month runway -- a world of difference if you lose your job vs a 1 week runway. At a minimum, everyone should work out what their genuine subsistence level is, so they know what they're spending on comfort.
kyuudou 7y ago
While I'm a big believer in this kind of saving, inflation is a reality and a huge deterrent for long term savings that doesn't involve some kind of interest, compound or not. But then there was that 2008 economic crisis... sigh still, better to have savings than not and there are some decent (5% ish) savings accounts that generate interest with minimal risk.
- epicgiga 7y ago
  Putting it all in cash is unwise when you've got a substantial amount -- at which time people naturally look to diversify anyway. But for the people this is good advice for, worrying about diversification is out of scope. Get 1 year's USD in the bank before that.
StavrosK 7y ago
I believe the GP's point is that it was sad to see people who could be saving 50% but blew it on expensive luxuries instead.

epicgiga 7y ago

Place in the world doesn't affect margin (%) -- if you work in London you'll make more than in Lahore, but your landlord is making the same "more" in turn. The goal isn't to live comfortably, it's to live minimally, to open up margin so you can spend time upskilling and trying to get higher paying jobs. I get that 50% is hard. I don't enjoy it myself, but I've been broke before and I've had really crap jobs before and so now it's fear that makes me save that rate. Rather than having my apartment be twice the size, I'll take a smaller one and funnel the surplus into my skills and my business pursuits, which in turn raises income and thus margin further, in a virtuous cycle. I just don't buy all the people saying a few percent is the absolute best they can do. Usually they're buying things, which I get -- the pleasure of those things are like the "reward" of the painful work hours. I think if they tried harder they could hit at least 25%. After a year that gives you a 4month runway -- a world of difference if you lose your job vs a 1 week runway. At a minimum, everyone should work out what their genuine subsistence level is, so they know what they're spending on comfort.

kyuudou 7y ago

While I'm a big believer in this kind of saving, inflation is a reality and a huge deterrent for long term savings that doesn't involve some kind of interest, compound or not. But then there was that 2008 economic crisis... sigh still, better to have savings than not and there are some decent (5% ish) savings accounts that generate interest with minimal risk.

epicgiga 7y ago
Putting it all in cash is unwise when you've got a substantial amount -- at which time people naturally look to diversify anyway. But for the people this is good advice for, worrying about diversification is out of scope. Get 1 year's USD in the bank before that.

StavrosK 7y ago

I believe the GP's point is that it was sad to see people who could be saving 50% but blew it on expensive luxuries instead.