4 ms·

Yeah, something like that. I think there’s a very bimodal distribution here. A lot of people save absolutely nothing. Some of those have no choice in the matter

Yeah, something like that. I think there’s a very bimodal distribution here. A lot of people save absolutely nothing. Some of those have no choice in the matter but many do but lack the discipline, motivation, and/or desire to do so. Anyone who finds it important and has the means to do so is—in general—likely saving more than a token amount. 10% is a good start and enough to be noticeably worth the effort. And then of course you have the FI/RE crowd who (while rarer) push their savings to anywhere from 30–50%, or even higher.

causi 3y ago
Right. I work somewhere that has a lot of seasonal overturn and the number of people who live check to check while displaying astonishing conspicuous consumption is very high. Guys who walk around with a new Galaxy Fold 5 and drive a caddy who freak out if their check is a day late.
ianburrell 3y ago
Another thing is that a lot of people contribute to 401k and other retirement plans. Those can’t be used for bills but count as savings. Also, a lot of people have equity in their homes. I don’t know if that counts as savings, but is money that can be accessed with HELOC or sale.
- nradov 3y ago
  Right, those studies and surveys often have very limited and meaningless definitions of "savings". Sometimes they only count cash in a bank account. But ultimately it's net worth that really matters, perhaps with some adjustment for liquidity.
303uru 3y ago
Absolutely a bimodal distribution. I wonder how it lines up with income? Anecdotally, my wife and I are high earners but we really haven't changed much in our lifestyle between early in our careers and now. Same house, same paid off cars, etc... A large percentage of our income shuttles into emergency fund, 401ks, backdoor roth, HSA, SEP IRA, and then DCA'd into traditional investments. I honestly don't even think about my spending or savings, we're well within our means and it just happens. We have friends and acquaintances in the same income bracket and many are leveraged to the gills, don't fund their 401k, don't have any emergency savings, etc... Hell, they're often using margin for risky investments.
bluGill 3y ago
In my experience it isn't that people lack motivation (the others are spot on), but that they have no idea what a lot is. I had one friend brag to me that after 2 years of contributing to his 401k he had $13k - which sounds like a lot of money, but realistically he should have had more like 300k to be on track for a good retirement. There is for most people little reason to keep much money in a savings account. They don't earn much interest.
- iosono88 3y ago
  [dead]
- stouset 3y ago
  Sorry, I should have included "understanding" in that list.
- epiccoleman 3y ago
  But... there's no way you could possible have 300k after 2 years of contributions to a 401k. If you were maxing it you'd have about 40. Unless you've made a typo and you mean 20 years? (in which case, now 300k is below maxing out, but slightly closer (although with returns it should be a good bit more))
  - mikestew 3y ago
    But... there's no way you could possible have 300k after 2 years of contributions to a 401k. You’re right…but that’s not what was said. After 2 years, all they had was $13K. But if they’d been contributing for 20 years like they should have been doing (because they’re 40, not fresh out of college), they’d have $300K. IOW, $13K is nothing to brag about if you’re 35 and working software jobs your whole career. At least that’s how I read it.
  - suoduandao3 3y ago
    I'm guessing the friend started late.
    - 3y ago

causi 3y ago

Right. I work somewhere that has a lot of seasonal overturn and the number of people who live check to check while displaying astonishing conspicuous consumption is very high. Guys who walk around with a new Galaxy Fold 5 and drive a caddy who freak out if their check is a day late.

ianburrell 3y ago

Another thing is that a lot of people contribute to 401k and other retirement plans. Those can’t be used for bills but count as savings. Also, a lot of people have equity in their homes. I don’t know if that counts as savings, but is money that can be accessed with HELOC or sale.

nradov 3y ago
Right, those studies and surveys often have very limited and meaningless definitions of "savings". Sometimes they only count cash in a bank account. But ultimately it's net worth that really matters, perhaps with some adjustment for liquidity.

303uru 3y ago

Absolutely a bimodal distribution. I wonder how it lines up with income? Anecdotally, my wife and I are high earners but we really haven't changed much in our lifestyle between early in our careers and now. Same house, same paid off cars, etc... A large percentage of our income shuttles into emergency fund, 401ks, backdoor roth, HSA, SEP IRA, and then DCA'd into traditional investments. I honestly don't even think about my spending or savings, we're well within our means and it just happens. We have friends and acquaintances in the same income bracket and many are leveraged to the gills, don't fund their 401k, don't have any emergency savings, etc... Hell, they're often using margin for risky investments.

bluGill 3y ago

In my experience it isn't that people lack motivation (the others are spot on), but that they have no idea what a lot is. I had one friend brag to me that after 2 years of contributing to his 401k he had $13k - which sounds like a lot of money, but realistically he should have had more like 300k to be on track for a good retirement. There is for most people little reason to keep much money in a savings account. They don't earn much interest.

iosono88 3y ago
[dead]
stouset 3y ago
Sorry, I should have included "understanding" in that list.
epiccoleman 3y ago
But... there's no way you could possible have 300k after 2 years of contributions to a 401k. If you were maxing it you'd have about 40. Unless you've made a typo and you mean 20 years? (in which case, now 300k is below maxing out, but slightly closer (although with returns it should be a good bit more))
- mikestew 3y ago
  But... there's no way you could possible have 300k after 2 years of contributions to a 401k. You’re right…but that’s not what was said. After 2 years, all they had was $13K. But if they’d been contributing for 20 years like they should have been doing (because they’re 40, not fresh out of college), they’d have $300K. IOW, $13K is nothing to brag about if you’re 35 and working software jobs your whole career. At least that’s how I read it.
- suoduandao3 3y ago
  I'm guessing the friend started late.
  - 3y ago