Discussions from another thread on retirement accounts got me thinking about the retirement savings data in the US. It’s a pretty sad state of affairs looking at the available data. Anecdotally conversations with friends and family of various ages and incomes support the data. I thought growing up poor it was only lower income people not saving. However as my wife and I have climbed up the socioeconomic ladder we’ve learned middle and upper middle class people aren’t much different. Across the board every generation and demographic, on average, is not doing well in this area. I figure most are investing very little and/or cash it out regularly.
Not looking for financial advice just curious on folks’ thoughts?
TL;DR - this is at page 10, and flipping through I saw a bunch about luck.
I am generally curious about how some folks "do it".
We save a lot. A lot. And we are pretty frugal. Between our two salaries, we are decently high earners. But again, we save heavily for retirement, for a beach house, HSA, for all of the kids' college... And we do indeed do a lot. Beach day trips most weekends, islands to visit family a few times a year, etc. But see again that we are decently high earners. So to cash flow that means compromising in another area.
So then I go and see folks that live in more expensive areas of the state, have much fancier cars, show the "facebook life" of trips and luxurious things... Makes me wonder how they do it. I know some friends get a lot of help from their parents. Like they never need to buy their kids clothes because the grandparents spend so much. Others I just dont know. They arent all doctors and lawyers. Yet they own expensive homes and cars.
The delta has to be not saving. You can not do certain things (as much eating out, as many activities, etc.), and limit your debt load so the rest just cash flows... And then get a 30 year mortgage, refinance on another 30 yr mortgage when the getting is good (I know a few who have done that), and not save.
I have to assume that even "well to-do" people quite often have very little saved.
One example came to mind, and made me think about this thread... National Lampoon's Christmas Vacation...
Seems like a decently talented engineer of some sort, corporate job in downtown Chicago, big house, etc. Puts a deposit on the pool, and didnt have enough money to pay it. Needed the bonus to keep his check from bouncing.
Huh? No savings? Nothing to tap? You have two teenage kids and not enough savings to avoid your deposit on an expensive item from bouncing? I get it that it is a movie... And isnt necessarily factually correct to anything, but I suspect it is more real than some might make it out to be.
I think that FB and instagram really skew our observations of reality too...
Ill say that the one "benefit" we have is a stable relationsion (working as a team with mutual respect), and that came from having parents, grandparents, etc. with zero divorce on either side. I lucked out - my parents cashflowed what I couldn't support in college with scholarships. That helps... But both of us were frugal and careful with school/grad school, to avoid burdens of massive debt with no way out.
Ive been saving since I was very young. I had passbook savings for as long as I can remember. Ive been fortunate to not have been hit with high medical bills, some callamity, and that Ive had stable employment and we have made good decisions. I cant say that Ive faced as many issues as others. Ive been "lucky" if you want to call it that. But we have done without, lived below our means, etc. And have been very fortunate.