The rich don't save either
As part of my "Save For Retirement" series, I am obviously poking and prodding you to save for retirement! The goal is to get to a point where you're rich enough to stop working, do what you want to do with your time, and have financial security no matter how old you live to be.
Should rich people save money? "Rich" is obviously a relative term, but I would say that the rich should at least maintain a certain level of net worth and not ever see it go down year-over-year. I've often thought that's how I'd handle myself if I won the lottery. In order to avoid become one of those boobs that squanders away the entire prize, I came up with this - If I received $20 million or so in cash after taxes, my pledge would be to only grow my net worth each year, and never see it go below $20 million due to frivolous spending or careless investing. Perhaps a good way to live anyway, huh?
Not enough Americans are saving for retirement. However, I read this article on how the rich aren't really saving either. In fact, a full 34% of people earning over $250,000 said that paying everyday bills was an obstacle to saving. And 49% say they're not saving more because they just "want some spending money." I suppose once you're earning $250,000 instead of $50,000, your lifestyle gets ratcheted up 500% as well!
5 comments:
Not to mention, $250,000 doesn't go nearly as far as one might think when you are paying nearly half of every marginal dollar in federal, state, and local taxes, not to mention medicare.
"I suppose once you're earning $250,000 instead of $50,000, your lifestyle gets ratcheted up 500% as well!"
Not always true. My wife and I make in excess of $300K annually and live on about a third of the income and save or invest the rest. I'm currently driving a 14 yr. old car with 160K miles on it and, are you ready for this, we rent for $1125/mo (utilities included). We're in our 30s and having a blast with what we do spend.
To anonymous,
You appear to be handling your finances correctly!!! I salute you and your fat salaries!
My wife and I maxed out at about $135,000 annually, and now we're making a bit less. But if you can save and prudently invest no matter how much you're making, it will pile up as you age.
As an addition to this article you may want to check out this bankrate article on savings levels projected to rise in 2007:
http://www.bankrate.com/brm/news/pf/YIRguide06-07/Nov06_Checking_saving_preview_2007_a1.asp?caret=2
Thanks plus6!
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