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Discussion Starter · #1 ·
Hi everybody,
Young people now live a very comfortable way of life, and spend as much as they make. Different from people who are older than them They live and work, spend reasonably and save a lot of money. I am curious how much money can the average person save? Hope everyone can give me the answer.
Thanks everyone.
 

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I think the are so many variables that it is hard to have a meaningful number. Income is a big factor as is the cost of living in your city.

Debt is also a big factor. Many people explore frugal living because they have a high debt to pay off. Opinions differ on this, but it is often better to pay down debt before building up savings. Especially if it is high interest debt.

It is more helpful to think of savings as a percentage of income. People often recommend six months of income in savings. Part of this is to live off in case you loose your job. But it is also to pay for large expenses such as home and car repair and medical bills. If your job is really secure, less than six months might be okay.

Seperate from this is saving in a retirement fund. If you are young, I recommend starting with 10% of your income and working your way to 20%. If you are middle age or older, I recommend at least 20%, more if you can. Especially if you have not saved much up previously.
 

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Discussion Starter · #3 ·
I think the are so many variables that it is hard to have a meaningful number. Income is a big factor as is the cost of living in your city.

Debt is also a big factor. Many people explore frugal living because they have a high debt to pay off. Opinions differ on this, but it is often better to pay down debt before building up savings. Especially if it is high interest debt.

It is more helpful to think of savings as a percentage of income. People often recommend six months of income in savings. Part of this is to live off in case you loose your job. But it is also to pay for large expenses such as home and car repair and medical bills. If your job is really secure, less than six months might be okay.

Seperate from this is saving in a retirement fund. If you are young, I recommend starting with 10% of your income and working your way to 20%. If you are middle age or older, I recommend at least 20%, more if you can. Especially if you have not saved much up previously.
Perhaps so, people with high incomes will save more.
 

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I think it is easier with people with higher incomes to save more. Certainly if you are struggling just to pay bills, savings even 10% will seem unreasonable.

But people with higher incomes do not always save more. I know a lady at work who makes more than me, but has not put anything into a retirement fund.

I also know people who make more than me that don't even have a months salary in their emergency fund.
 

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I think the are so many variables that it is hard to have a meaningful number. Income is a big factor as is the cost of living in your city.

Debt is also a big factor. Many people explore frugal living because they have a high debt to pay off. Opinions differ on this, but it is often better to pay down debt before building up savings. Especially if it is high interest debt.

It is more helpful to think of savings as a percentage of income. People often recommend six months of income in savings. Part of this is to live off in case you loose your job. But it is also to pay for large expenses such as home and car repair and medical bills. If your job is really secure, less than six months might be okay.

Seperate from this is saving in gold. If you are young, I recommend starting with 10% of your income and working your way to 20%. If you are middle age or older, I recommend at least 20%, more if you can. Especially if you have not saved much up previously.
I believe that money should work. That is why saving is not the best option since it is much better to invest money in something (stocks, business, etc.). At the moment I am reading several books about investing and the more I read the clearer I understand that investing the right way is a truly difficult thing :(
 

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Yes a middle ground is important. Many people don't save anything and that is not good.

But the opposite approach - to save as much as possible - can be problematic.

You need to let yourself have some money for things you like.

I would also say that it is not necessary to spend a lot of time learning about investing. Just invest in a balanced fund instead of picking stocks.

It is probably good to learn a enough to know when a stock is risky. For example, "aggressive growth" stocks sound good. But it is code for stocks that have the potential to earn big, but are also very risky.
 

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You can also invest in real estate or jewelry. Of course, jewelry is passive savings, they do not bring profit, but gold and precious stones are always in value.
 

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Real estate can be risky. If you buy while prices are up - like now - you risk buying during a housing bubble. You could buy real estate and have it decrease for in value.

Years ago I had my home shoot up in value then fall back down - thankfully not below what we bought it for. But if our timing was worse we could have been down almost $100,000.

Real estate is also not as passive as some people like to think. If you are a landlord you have to collect rent and make repairs. And sometimes you have to deal with people who don't pay rent. Sometimes renters leave the place in bad condition.

I am not saying don't invest in real estate. I am just saying know what you are getting into.

On the other hand, I have money taken from my account automatically and put in balanced investment fund. So it is pretty passive.
 

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Real estate can be risky. If you buy while prices are up - like now - you risk buying during a housing bubble. You could buy real estate and have it decrease for in value.

Years ago I had my home shoot up in value then fall back down - thankfully not below what we bought it for. But if our timing was worse we could have been down almost $100,000.

Real estate is also not as passive as some people like to think. If you are a landlord you have to collect rent and make repairs. And sometimes you have to deal with people who don't pay rent. Sometimes renters leave the place in bad condition.

I am not saying don't invest in real estate. I am just saying know what you are getting into.

On the other hand, I have money taken from my account automatically and put in balanced investment fund. So it is pretty passive.
To invest in real estate, you need to understand this issue. The same, in principle, as in investing in stocks or securities. Investing in jewelry is a bit easier. Jewelry is always valuable.
 

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Are you really going to get the same amount for jewelry as you paid for it when you sell it?

Things like gold or diamonds are valuable but you are also paying extra for them to make jewelry out of it.

Jewelry styles change. Will it still be as valued when it is out of style?

I have heard of people investing in gold before but not jewelry.
 

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Nobody bothers to buy cut stones. Their price will not change much, because for many years in a row, crystals have been processed in the same form.

To be honest, any investment of money is the risk of losing some part of it. All the advantages and disadvantages must be well appreciated. Nowadays, many people invest in bitcoin and other cryptocurrencies.
 

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I am now able to save 33% of my income. When I was younger, my income was $20,000. a year, and I was not able to save. But, I also fell into the trap of spending more when I earned more money. I think it's important to have a year's living expenses in savings. I have made much more money in the stock market than I expected, by my dad picked those stocks, and I inherited them before the new laws were set. (as far as capital gains taxes.) I also have been fortunate with CA real estate. My brothers and I sold my parents' home in an inflated housing market, and I bought my cottage for $89,500. in a down market in a working class neighborhood. back in 1998. Timing is everything. Keeping your expenses low makes all the difference.
 

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Do your friends also earn more? Savings should be based on how much you earn, not a fixed dollar amount.

Also different people have different situations. One person might have more debt or more family members to support.
 
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