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The Rich Don't Save Too
Old 05-29-2007, 09:50 AM   #1
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The Rich Don't Save Too

According to this article.

"As evidence, HSBC reports that people with more than $250,000 in household income, who constitute the top 1.5% of U.S. households, report facing many obstacles when it comes to saving. Indeed when HSBC asked what prevents them from saving more, the top answer was the need to pay everyday bills, with 34% of respondents of those who earn more than $250,000 concurring."
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Correct Me If I'm Wrong...
Old 05-29-2007, 11:15 AM   #2
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Correct Me If I'm Wrong...

Isn't the true measure of wealth assets rather than income?

Our society is fixated on how much you make; i.e. the more you earn, the richer you are.

But, in reality, if you make $250,000 a year, but can't save a dime, you ain't rich.

The retired mailman with $ 2,000,000 investable assets he's rich.
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Old 05-29-2007, 11:16 AM   #3
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I am not sure I believe the conclusions of this article. First they lump people earning $250K a year with the rest of the population to conclude that since the overall savings rate is negative, then it must be that the rich don't save either.
Second the question they ask is not "why don't you save any money at all" but rather "why don't you save MORE money".
Finally, maybe the rich don't need to "save" because they "invest" their money and have enough investments to fall back onto in case they need it(even the author of the article acknowledges that fact: "To be sure, there are other things to consider when examining the financial lives of higher income earners. For example, while people who earn more may not be saving more, they may have some type of an investment plan that acts as a surrogate for their savings account. That may be why 74% of people who earn more than $250,000 per year say they save consistently throughout the year.").
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Old 05-29-2007, 11:45 AM   #4
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Originally Posted by FIREdreamer View Post
...
Finally, maybe the rich don't need to "save" because they "invest" their money and have enough investments to fall back onto in case they need it(even the author of the article acknowledges that fact: "To be sure, there are other things to consider when examining the financial lives of higher income earners. For example, while people who earn more may not be saving more, they may have some type of an investment plan that acts as a surrogate for their savings account. That may be why 74% of people who earn more than $250,000 per year say they save consistently throughout the year.").
Mr. Marketwatch elaborates further on:

"Still, investing aside, saving is a different thing altogether that doesn't always get its due."

Where does the money for investing come from if it isn't saved first?

Here is another article today where the author doesn't really understand the concepts:

Yahoo! Personal Finance

Here is what I'm talking about:


"Dipping into your nest egg early, however, is generally ill-advised. Not only are you depleting your retirement savings for the future, but the money you withdraw no longer appreciates in value from interest, dividends or capital gains. As such, Silbiger says, early retirees should stick to their savings and after-tax investments instead, a tall order for most."

Um, so let's clear this up: Don't spend your savings. Use your savings instead.
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Old 05-29-2007, 12:17 PM   #5
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Originally Posted by slepyhed View Post
Mr. Marketwatch elaborates further on:

"Dipping into your nest egg early, however, is generally ill-advised. Not only are you depleting your retirement savings for the future, but the money you withdraw no longer appreciates in value from interest, dividends or capital gains. As such, Silbiger says, early retirees should stick to their savings and after-tax investments instead, a tall order for most."

Um, so let's clear this up: Don't spend your savings. Use your savings instead.
I think the author meant that do not touch your savings in your tax-deferred or advantaged account and use the money in your taxable account to fund your living expenses.
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What the rich worry about
Old 05-29-2007, 01:47 PM   #6
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What the rich worry about

As this Forbes Poll reports. Getting sued is a big one for the really wealthy.
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Old 05-29-2007, 01:48 PM   #7
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You want to see how the Rich spend without having any clue read this.
‘I always thought money grew on trees’-Business-Money-TimesOnline

She has no clue what's going on with her investments. How long do you think it takes before the Accountant looses it all?

-h
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Old 05-29-2007, 03:54 PM   #8
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You want to see how the Rich spend without having any clue read this.
‘I always thought money grew on trees’-Business-Money-TimesOnline

She has no clue what's going on with her investments. How long do you think it takes before the Accountant looses it all?

-h
Wow... interesting read.... and remember to multiply the numbers by two as they are talking pounds...

And I would bet that her accountants are doing well for her... most are honest...
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Old 05-29-2007, 04:23 PM   #9
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Just to be clear: The Yahoo Finance Article is not by the same author who wrote the MSN article.
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Old 05-29-2007, 08:34 PM   #10
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Originally Posted by lswswein View Post
You want to see how the Rich spend without having any clue read this.
‘I always thought money grew on trees’-Business-Money-TimesOnline

She has no clue what's going on with her investments. How long do you think it takes before the Accountant looses it all?

-h
That's awesome. Wonder if she'll follow in the legacy of Whitney Houston and hit rock bottom soon? Whitney had her house here in Atlanta foreclosed on.
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Old 05-29-2007, 10:42 PM   #11
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Classic quotes. Thanks. She is cuter than Paris Hilton though.

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for some reason I stopped taking taxis and just used helicopters whenever I could
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It wasn’t my fault, though. I was told I could use the card to buy anything, from a window to an elephant, so I did
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To run my house also costs a bomb. I have about seven people working for me today – decorators, gardeners and cleaners – and about 15 staff in total.
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I think I converted one of my bathrooms into a Turkish steam room when I got the Walkers money.
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I hate the word pension. It just annoys me because my philosophy is to live fast and die young.
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I also have someone come in to reorganise my wardrobe every two months – that costs £600.
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Old 05-30-2007, 12:57 PM   #12
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Many suddenly rich people illustrate the old saying" "Easy come, easy go!" It is just that agents also believe it and help them along.

Anyone who ignores their finances deserves what they get. It makes about as much sense as ignoring tire pressure and oil levels in their car.
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Old 05-30-2007, 09:37 PM   #13
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Well, she gets her fortune from the public. Putting the money back into the economy is her way of giving back.
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