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62% of workers cut back on savings amid concerns about the economy

27 points by donsupreme 4y ago

Spivak 4y ago
This is a really cute way of saying prices have gone up and people are either dipping into their savings to make ends meet and have less money leftover to save or invest. grabs my top hat and monocle “Yess, the family is making a strategic decision to divest itself from cash holdings and investments.”
- fundad 4y ago
  This article is actually about retirement investment accounts. Your point is still taken, you can't eat investments and the gross profiteering has not subsided.
  - awinder 4y ago
    “Almost one-third — 31%— of respondents reduced contributions to their 401(k) plans. Meanwhile, 26% said they’ve cut back on paying down debts, 25% reduced their long-term savings, 24% scaled back emergency and short-term savings, 19% whittled down contributions to health savings accounts and 13% reduced contributions to a college savings fund.” More than retirement/401ks only.
    - Spivak 4y ago
      And even if it was only retirement accounts that's the investing most people do. If you make it to the point where you've maxed out all your tax advantaged accounts then you're doing way better than average.
      - fundad 4y ago
        Ok that’s some good Reading comprehension
rektide 4y ago
Inflation is high & stocks/investments are falling. Saving is much less appealing when you get less latter than you'd get now.
- toomuchtodo 4y ago
  Indeed. Not financial advice. One should be shifting cashflow to paying off highest interest debt if their emergency fund is topped up and they’re meeting reasonable retirement contribution targets. Cash is currently king, and will continue to be so until we reach terminal “high watermark” benchmark rate. Otherwise, you’re pumping fiat into assets that will continue to decline in value.
  - notch656a 4y ago
    Wouldn't inflation mean equities increase in nominal value? I mean I know they aren't, but it's not intuitive. As a gross simplification: One would think if I own 1/N pieces of a meat grinding automation machine that when prices of everything go up, all else equal, the nominal value of the machine and the system behind it would go up as well.
    - akomtu 4y ago
      The Fed has a huge pile of stocks it's bought over the past decade. Now it's dumping them, slowly.
      - njarboe 4y ago
        The Fed bought a lot of various assets (US bonds, home mortgage bonds, and even a few corporate bonds via ETFs), but never bought stocks as far as I know. Would love a reference on this if you have one.
        vba616 4y ago
        As far as I know, all the ETFs were bond funds, but maybe someone said they were propping up the stock market because ETFs are traded on stock exchanges, and then someone else interpreted that to mean they are buying stocks... https://www.google.com/search?q=just+a+normal+day+at+the+nation%27s+most+important+financial+institution https://www.google.com/search?q=just+a+normal+day+at+the+nat...
deleted 4y ago
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yrgulation 4y ago
Real estate collapse isnt so far fetched now. If people cant save for deposits and their monthly disposable income lower how can they take mort gages?
- Spivak 4y ago
  I get what you're saying but this is backwards. If you think your cash is going to be worth much less in the future you should absolutely save up for a down payment on a house. In fact buy the most expensive house the bank will let you purchase because you'll be paying it back in worthless 2030 dollars. Normal inflation over the past 15 years made your money worth 73c on the dollar. If you think it's gonna be worse then that then you should be overjoyed buying a house. The saving the article is talking about is long term saving, nest egg kinda stuff. Saving money specifically to immediately spend it would be reducing savings from the article's pov.
  - janef0421 4y ago
    Mortgage deposits on houses are very expensive compared to incomes in most anglophone countries. It's completely out of reach for many workers, and for most of those who could afford it, savings would still take several years. With high inflation, that money would be significantly devalued by the time it was sufficient for a down-payment. If this were combined with asset price inflation, it is possible that a worker might never have enough for a deposit.
    - deleted 4y ago
      [deleted]

27 points by donsupreme 4y ago

This is a really cute way of saying prices have gone up and people are either dipping into their savings to make ends meet and have less money leftover to save or invest. grabs my top hat and monocle “Yess, the family is making a strategic decision to divest itself from cash holdings and investments.”

fundad 4y ago
This article is actually about retirement investment accounts. Your point is still taken, you can't eat investments and the gross profiteering has not subsided.
- awinder 4y ago
  “Almost one-third — 31%— of respondents reduced contributions to their 401(k) plans. Meanwhile, 26% said they’ve cut back on paying down debts, 25% reduced their long-term savings, 24% scaled back emergency and short-term savings, 19% whittled down contributions to health savings accounts and 13% reduced contributions to a college savings fund.” More than retirement/401ks only.
  - Spivak 4y ago
    And even if it was only retirement accounts that's the investing most people do. If you make it to the point where you've maxed out all your tax advantaged accounts then you're doing way better than average.
    - fundad 4y ago
      Ok that’s some good Reading comprehension

rektide 4y ago

Inflation is high & stocks/investments are falling. Saving is much less appealing when you get less latter than you'd get now.

toomuchtodo 4y ago
Indeed. Not financial advice. One should be shifting cashflow to paying off highest interest debt if their emergency fund is topped up and they’re meeting reasonable retirement contribution targets. Cash is currently king, and will continue to be so until we reach terminal “high watermark” benchmark rate. Otherwise, you’re pumping fiat into assets that will continue to decline in value.
- notch656a 4y ago
  Wouldn't inflation mean equities increase in nominal value? I mean I know they aren't, but it's not intuitive. As a gross simplification: One would think if I own 1/N pieces of a meat grinding automation machine that when prices of everything go up, all else equal, the nominal value of the machine and the system behind it would go up as well.
  - akomtu 4y ago
    The Fed has a huge pile of stocks it's bought over the past decade. Now it's dumping them, slowly.
    - njarboe 4y ago
      The Fed bought a lot of various assets (US bonds, home mortgage bonds, and even a few corporate bonds via ETFs), but never bought stocks as far as I know. Would love a reference on this if you have one.
      - vba616 4y ago
        As far as I know, all the ETFs were bond funds, but maybe someone said they were propping up the stock market because ETFs are traded on stock exchanges, and then someone else interpreted that to mean they are buying stocks... https://www.google.com/search?q=just+a+normal+day+at+the+nation%27s+most+important+financial+institution https://www.google.com/search?q=just+a+normal+day+at+the+nat...

deleted 4y ago

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yrgulation 4y ago

Real estate collapse isnt so far fetched now. If people cant save for deposits and their monthly disposable income lower how can they take mort gages?

Spivak 4y ago
I get what you're saying but this is backwards. If you think your cash is going to be worth much less in the future you should absolutely save up for a down payment on a house. In fact buy the most expensive house the bank will let you purchase because you'll be paying it back in worthless 2030 dollars. Normal inflation over the past 15 years made your money worth 73c on the dollar. If you think it's gonna be worse then that then you should be overjoyed buying a house. The saving the article is talking about is long term saving, nest egg kinda stuff. Saving money specifically to immediately spend it would be reducing savings from the article's pov.
- janef0421 4y ago
  Mortgage deposits on houses are very expensive compared to incomes in most anglophone countries. It's completely out of reach for many workers, and for most of those who could afford it, savings would still take several years. With high inflation, that money would be significantly devalued by the time it was sufficient for a down-payment. If this were combined with asset price inflation, it is possible that a worker might never have enough for a deposit.
  - deleted 4y ago
    [deleted]