% bogleheads of overall population

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doon
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% bogleheads of overall population

Postby doon » Thu Jul 13, 2017 1:11 pm

This article got me thinking....


Just 10 percent of employees set aside enough to hit the employee contribution limit during 2016, down from 13 percent who did the year before, according to Vanguard's "How America Saves 2017" report, released earlier this summer. Those who max out tend to be older and/or wealthier. (See a demographic breakdown below.)


http://www.cnbc.com/2017/07/13/what-workers-sacrifice-to-max-out-their-retirement-savings.html


Link to original report by Vanguard on How America Saves 2017

https://pressroom.vanguard.com/nonindexed/How-America-Saves-2017.pdf

Catch up contribution -

Nearly all Vanguard plans offered catch-up contributions in 2016. Catch-up contributions permit participants age 50 and older to contribute more than permitted for participants under age 50. Twelve percent of age-50-and-older participants eligible for catch-up contributions took advantage of this feature in 2016 (Figure 37). Participants earning less than $100,000 would need deferral rates higher than 20%of income in order to make catch-up contributions,suggesting that adoption of catch-up contributions byparticipants is actually quite strong.
Last edited by doon on Thu Jul 13, 2017 1:55 pm, edited 1 time in total.

deltaneutral83
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Re: % bogleheads of overall population

Postby deltaneutral83 » Thu Jul 13, 2017 1:23 pm

I was stunned to read that 10% put in $16,200 in their 401k. I figured it was more like 2-3%, so I guess that's good news.

Crisium
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Re: % bogleheads of overall population

Postby Crisium » Thu Jul 13, 2017 1:25 pm

Some bogleheads cannot contribute that much. I can't.

asif408
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Re: % bogleheads of overall population

Postby asif408 » Thu Jul 13, 2017 1:46 pm

A little basic math: About 62,000 Boglehead members, US population is about 320 million (world population about 7.5 billion), that equates to <0.1% of the population depending on the population you use in the denominator. Any way you look at it, Bogleheads are nowhere near a majority of the population.

Just remember when you visit here that you are in the Boglehead bubble. A nice group to be in a bubble with, but still in a bubble.

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jharkin
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Re: % bogleheads of overall population

Postby jharkin » Thu Jul 13, 2017 1:50 pm

deltaneutral83 wrote:I was stunned to read that 10% put in $16,200 in their 401k. I figured it was more like 2-3%, so I guess that's good news.


Agreed. When you consider that maxing it out is almost 1/4 of the total household income of the average family (meaning lots of individuals making much less) its essentially impossible for over half the population to max it out and still... eat.

Another interesting metric would be the % of people that contribute anything at alll... the last time I saw a number it was shockingly low also, less than half I think?

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Re: % bogleheads of overall population

Postby QuietProsperity » Thu Jul 13, 2017 2:01 pm

As asif pointed out, the math shows just how small of a population bogleheads are. Obviously there are more frugal, low-cost, financial savvy people out there that are NOT on the bogleheads forum, but in general, those types of people seem to be the minority of the population. I would venture to guess that it is somewhere around 10-20% of the US population.

In my personal experience, I tend to have rather frequent conversations about finances and investing since I work in the finance industry, and regardless of whether I'm talking to fellow employees, family and friends, or random acquaintances at social events, I rarely hear a lot of boglehead principles being thrown around. Most times I engage in these conversations, I hear a lot about buying expensive material objects, investing in some new hot trend (Cryptos are it right now) or exotic investments, not saving much at all ("They will later in life") etc. It used to be a shock to me, but I have accepted and learned over the years that a majority of people are not on top of their finances, or what it takes to become financially independent in a somewhat timely manner.

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Raybo
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Re: % bogleheads of overall population

Postby Raybo » Thu Jul 13, 2017 2:21 pm

asif408 wrote:A little basic math: About 62,000 Boglehead members, US population is about 320 million (world population about 7.5 billion), that equates to <0.1% of the population depending on the population you use in the denominator. Any way you look at it, Bogleheads are nowhere near a majority of the population.

Just remember when you visit here that you are in the Boglehead bubble. A nice group to be in a bubble with, but still in a bubble.


Is it only regisred users that count as Bogleheads? How many unique IP address visit the site each month? This might be a better metric to use. Though, I still suspect it is a small percentage.
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Re: % bogleheads of overall population

Postby Thesaints » Thu Jul 13, 2017 2:25 pm

asif408 wrote:A little basic math: About 62,000 Boglehead members, US population is about 320 million (world population about 7.5 billion), that equates to <0.1% of the population depending on the population you use in the denominator. Any way you look at it, Bogleheads are nowhere near a majority of the population.
.


Higher than that in Florida, probably...

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htdrag11
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Re: % bogleheads of overall population

Postby htdrag11 » Thu Jul 13, 2017 2:36 pm

+1.

I thought that we're the 1%. :mrgreen:

According to the latest US News and World Report, most folks have about $100k in their savings/retirement account.

It's great to be different!

deltaneutral83
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Re: % bogleheads of overall population

Postby deltaneutral83 » Thu Jul 13, 2017 2:50 pm

htdrag11 wrote:+1.

I thought that we're the 1%. :mrgreen:

According to the latest US News and World Report, most folks have about $100k in their savings/retirement account.

It's great to be different!


70% of Americans are broke or one paycheck away from being broke. In your statistic, that's the average, not the median. You can see the significance of that skew just reading topics here with plenty of folks with multi million dollar portfolios. 90% of people probably have less than 8x expenses at age 65 saved in their 401k and of course have no taxable accounts because there was no need to have one.

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ray.james
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Re: % bogleheads of overall population

Postby ray.james » Thu Jul 13, 2017 2:51 pm

Trying to estimate % of bogleheads is very error prone and unreliable.

Something of interest from the report attached:
In 2016, the average account balance for Vanguard participants was $96,495; the median balance was $24,713.
Number of participant accounts (millions): 4.4
Number of plans (thousands): 1.9

Given the above, I think it is possible to estimate the bellcurve with standard deviation and it will be Very Very top heavy. That is sad. The curve is much more linear/exponential than I expected.

Something else of interested is the median participant+non participant income went down along with mean which implies people got hired starting their career at lower wages and a good number are participating. A very positive sign.
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Re: % bogleheads of overall population

Postby BogleCPA » Thu Jul 13, 2017 3:00 pm

There's lots of people who understand boglehead principles but don't have the income (yet) to max out 401(k)'s. My wife and I are 27 years old, just got married and bought a house, etc. and are still working our way up in our careers. We aren't maxing out yet but we read this forum and we understand what our near-term and short-term goals are, including the maxing out of these accounts!

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Re: % bogleheads of overall population

Postby tennisplyr » Thu Jul 13, 2017 3:13 pm

htdrag11 wrote:+1.

I thought that we're the 1%. :mrgreen:

According to the latest US News and World Report, most folks have about $100k in their savings/retirement account.

It's great to be different!


And the $100k is an average, less if you pull out the more affluent folks.
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Re: % bogleheads of overall population

Postby keystone » Thu Jul 13, 2017 3:29 pm

deltaneutral83 wrote:I was stunned to read that 10% put in $16,200 in their 401k. I figured it was more like 2-3%, so I guess that's good news.


This is a figure from Vanguard, so I wonder whether this is representative of all 401K plans or just the Vanguard plan. I've had access to payroll records from a variety of employers in my career and I can say that 10% seems high based on my observation. From what I've noticed, those that are maxing out their plans are typically older (>50) and higher earners. Very few people in their 20's and 30's come close to maxing out and quite a bit don't even contribute at all. This shouldn't really be much of a surprise to anyone who talks finances with other people (outside of this site).

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Re: % bogleheads of overall population

Postby BogleAlltheWay » Thu Jul 13, 2017 3:30 pm

Here is an interesting article on how Americans spend their money:

http://www.marketwatch.com/story/low-income-families-spend-40-of-their-money-on-luxuries-2017-06-28

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celia
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Re: % bogleheads of overall population

Postby celia » Thu Jul 13, 2017 3:44 pm

And even if someone COULD contribute that much to their 401K, maybe they prefer to contribute to a Roth or backdoor Roth instead.

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Re: % bogleheads of overall population

Postby PhysicsTeacher » Thu Jul 13, 2017 3:54 pm

Crisium wrote:Some bogleheads cannot contribute that much. I can't.


Agreed! Although this forum skews to high income earners, it is entirely possible to follow Boglehead principles on a moderate income. I make $38k per year. My husband recently got a raise to $22 per hour. I have mandatory pension contributions, we max two Roth IRAs, and we're saving for a downpayment on a house. We utilize DH's 401(k) and my 403(b), but we aren't yet anywhere close to the maximum contribution. I don't think that makes us failures.

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celia
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Re: % bogleheads of overall population

Postby celia » Thu Jul 13, 2017 4:00 pm

BogleAlltheWay wrote:Here is an interesting article on how Americans spend their money:

http://www.marketwatch.com/story/low-income-families-spend-40-of-their-money-on-luxuries-2017-06-28

But it has a very strange definition of "luxury" and "neccessity".
It’s worth noting that by the specialized nomenclature of the dismal science, even eating at McDonald’s is a luxury — that is, we do it more as our incomes rise — while smoking and lottery-ticket buying are categorized as necessities. For its part, the Deutsche Bank report explicitly defined luxuries as goods or services consumed in greater proportions as a person’s income increases and necessities as those goods or services that make up a smaller proportion of spending as a person’s income increases.

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Re: % bogleheads of overall population

Postby Engineer250 » Thu Jul 13, 2017 4:03 pm

BogleAlltheWay wrote:Here is an interesting article on how Americans spend their money:

http://www.marketwatch.com/story/low-income-families-spend-40-of-their-money-on-luxuries-2017-06-28


Article was interesting, but the study was weird:

It’s worth noting that by the specialized nomenclature of the dismal science, even eating at McDonald’s is a luxury — that is, we do it more as our incomes rise — while smoking and lottery-ticket buying are categorized as necessities. For its part, the Deutsche Bank report explicitly defined luxuries as goods or services consumed in greater proportions as a person’s income increases and necessities as those goods or services that make up a smaller proportion of spending as a person’s income increases.


Celia beat me to it...

I know what they are trying to do but I'm not sure it really categorizes things properly. I'd guess people don't really get much more expensive cell phone plans or cable packages as they make more money, but you could argue a cable package is a luxury or certain cell phone plan above a certain level might be a luxury. On the other hand, if you have some huge house and overpriced mortgage but your income goes up, well your mortgage doesn't go up again, right? And yet it may have been a "luxury" to buy a house at that price to begin with.

I don't know, worth thinking about but I'm not a fan of "look at how poor people waste their money!" exaggerations.

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Re: % bogleheads of overall population

Postby ruralavalon » Thu Jul 13, 2017 4:19 pm

keystone wrote:
deltaneutral83 wrote:I was stunned to read that 10% put in $16,200 in their 401k. I figured it was more like 2-3%, so I guess that's good news.


This is a figure from Vanguard, so I wonder whether this is representative of all 401K plans or just the Vanguard plan. I've had access to payroll records from a variety of employers in my career and I can say that 10% seems high based on my observation. From what I've noticed, those that are maxing out their plans are typically older (>50) and higher earners. Very few people in their 20's and 30's come close to maxing out and quite a bit don't even contribute at all. This shouldn't really be much of a surprise to anyone who talks finances with other people (outside of this site).

That is a Vanguard study of plans administered by Vanguard. I would not assume that employee contributions are different in plans administered by others.

The study does show that employees making the maximum contributions tend to be older and higher earners (p.36).

The median household income in the U.S. is about $56k, and for a median household under age 50 maxing one 401k would mean deferring 32% of gross income.
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Re: % bogleheads of overall population

Postby Grt2bOutdoors » Thu Jul 13, 2017 4:23 pm

PhysicsTeacher wrote:
Crisium wrote:Some bogleheads cannot contribute that much. I can't.


Agreed! Although this forum skews to high income earners, it is entirely possible to follow Boglehead principles on a moderate income. I make $38k per year. My husband recently got a raise to $22 per hour. I have mandatory pension contributions, we max two Roth IRAs, and we're saving for a downpayment on a house. We utilize DH's 401(k) and my 403(b), but we aren't yet anywhere close to the maximum contribution. I don't think that makes us failures.


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htdrag11
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Re: % bogleheads of overall population

Postby htdrag11 » Thu Jul 13, 2017 4:27 pm

PhysicsTeacher wrote:
Crisium wrote:Some bogleheads cannot contribute that much. I can't.


Agreed! Although this forum skews to high income earners, it is entirely possible to follow Boglehead principles on a moderate income. I make $38k per year. My husband recently got a raise to $22 per hour. I have mandatory pension contributions, we max two Roth IRAs, and we're saving for a downpayment on a house. We utilize DH's 401(k) and my 403(b), but we aren't yet anywhere close to the maximum contribution. I don't think that makes us failures.


I get it. When we were younger, both of us got decent paying jobs (white collar) and maxed out on our 401k. Neither of us have student loans in those days. We bought our 1st townhouse by taking a loan from my MIL as part of down payment and paid it back. The rest is history. In our neighbor, we manage with one car for about 5 years now. Used to have 3, to keep up with the Joneses. Just do not see the needs today.

Life is about choices. Did not even buy a thing on Amazon Prime Day, kind of odd for me.

GL.

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just frank
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Re: % bogleheads of overall population

Postby just frank » Thu Jul 13, 2017 5:41 pm

I would think that one of the mods could tells us the number of site members (including lurkers) and we could divide by 300MM and call it good enough. I'd guess its pretty small. We're not 4Chan. :D

There are people that hit the max that are not Bogleheads, and Bogle-head types that do not hit the max.

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Re: % bogleheads of overall population

Postby triceratop » Thu Jul 13, 2017 5:58 pm

just frank wrote:I would think that one of the mods could tells us the number of site members (including lurkers) and we could divide by 300MM and call it good enough. I'd guess its pretty small. We're not 4Chan. :D

There are people that hit the max that are not Bogleheads, and Bogle-head types that do not hit the max.


Check out the footer on the forum index: 61304 members. Difficult to say how many lurkers there are, but look at the ratio of members to lurkers at any given time.
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Re: % bogleheads of overall population

Postby MnD » Thu Jul 13, 2017 7:02 pm

Any analysis of say "Vanguard plan participants" or "Fidelity plan participants" is very skewed from the get-go.
Compounding that is the tendency to use averages instead of medians.

Retirement savings figures using the median of all US households is vastly different than averages of those who have say Vanguard 401-K plans.

An analysis of the Federal Reserve survey of consumer finance finds.........

Nearly half of families have no retirement account savings at all. That makes median (50th percentile) values low for all age groups, ranging from $480 for families in their mid-30s to $17,000 for families approaching retirement in 2013. For most age groups, median account balances in 2013 were less than half their pre-recession peak and lower than at the start of the new millennium.

http://www.epi.org/files/charts/img/11183.png

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Re: % bogleheads of overall population

Postby OnTrack » Thu Jul 13, 2017 7:16 pm

triceratop wrote:
just frank wrote:I would think that one of the mods could tells us the number of site members (including lurkers) and we could divide by 300MM and call it good enough. I'd guess its pretty small. We're not 4Chan. :D

There are people that hit the max that are not Bogleheads, and Bogle-head types that do not hit the max.


Check out the footer on the forum index: 61304 members. Difficult to say how many lurkers there are, but look at the ratio of members to lurkers at any given time.

Except that a member would be a counted as a "guest" if not logged in.

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Re: % bogleheads of overall population

Postby triceratop » Thu Jul 13, 2017 7:27 pm

OnTrack wrote:
triceratop wrote:
just frank wrote:I would think that one of the mods could tells us the number of site members (including lurkers) and we could divide by 300MM and call it good enough. I'd guess its pretty small. We're not 4Chan. :D

There are people that hit the max that are not Bogleheads, and Bogle-head types that do not hit the max.


Check out the footer on the forum index: 61304 members. Difficult to say how many lurkers there are, but look at the ratio of members to lurkers at any given time.

Except that a member would be a counted as a "guest" if not logged in.


I don't know about others but I never browser Bogleheads while not logged in. I use a browser extension to open each thread link to the first unread post, and this is impossible if I spend any time browsing while not logged in.
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Re: % bogleheads of overall population

Postby inbox788 » Thu Jul 13, 2017 7:28 pm

doon wrote:
Nearly all Vanguard plans offered catch-up contributions in 2016. Catch-up contributions permit participants age 50 and older to contribute more than permitted for participants under age 50. Twelve percent of age-50-and-older participants eligible for catch-up contributions took advantage of this feature in 2016 (Figure 37). Participants earning less than $100,000 would need deferral rates higher than 20%of income in order to make catch-up contributions,suggesting that adoption of catch-up contributions byparticipants is actually quite strong.

They come to the conclusion that 12% participating in catch up contributions is strong, because you need income greater than $100k or greater than 20%. But this is the age over 50, which is prime earning years, so the percentage of those making $100k or higher savings rate is expected to be greater than average. So to me, 12% isn't high or strong!

The denominator is easily estimated at 7.5B world population.

http://www.worldometers.info/world-population/

What exactly is your criteria and method of measurement for the numerator? The only easily measurable number is the number of BH members on this board which would make the ratio essentially zero. If you apply any criteria, a good number of members on this board are likely to be excluded and there are many people in the world who may qualify but are hard to count. At best, you'd do some sampling type study, which will have a wide margin of error. And how useful would it be to find out that 0.0001% to 30% of the population are fanatically frugal to fiscally responsible? Just do as we all do and adopt/adapt the best you can.

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Re: % bogleheads of overall population

Postby sport » Thu Jul 13, 2017 7:30 pm

PhysicsTeacher wrote:
Crisium wrote:Some bogleheads cannot contribute that much. I can't.


Agreed! Although this forum skews to high income earners, it is entirely possible to follow Boglehead principles on a moderate income. I make $38k per year. My husband recently got a raise to $22 per hour. I have mandatory pension contributions, we max two Roth IRAs, and we're saving for a downpayment on a house. We utilize DH's 401(k) and my 403(b), but we aren't yet anywhere close to the maximum contribution. I don't think that makes us failures.

I never was able to make a maximum contribution to my 401k. I am now comfortably retired. The trick is to start saving when you are young and take advantage of compound growth.

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Re: % bogleheads of overall population

Postby 3spots » Thu Jul 13, 2017 8:36 pm

triceratop wrote:
I don't know about others but I never browser Bogleheads while not logged in. I use a browser extension to open each thread link to the first unread post, and this is impossible if I spend any time browsing while not logged in.


If I may ask, what browser and extension are you using? That would be a huge help for me :-)

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Re: % bogleheads of overall population

Postby MPAndy222 » Thu Jul 13, 2017 8:55 pm

I find it interesting that 60+% of participants were automatically enrolled in their plans and the majority of those were professionally managed. I think that it is a good trend that more and more employers are having new hires have to 'opt out' of the retirement plans. Some plans (such as STRS in Ohio) have nonnegotiable contribution rates too (14%). This may skew the 10% max contribution number as salaries >126k at 14% would max out the 401k/403b

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Re: % bogleheads of overall population

Postby Portfolio7 » Fri Jul 14, 2017 12:03 am

Is everyone registered on this site considered a boglehead? I've done some unbogle-ish things in the past, and probably will in the future.... :twisted: I'm at least traveling the same direction, if maybe on a mostly parrallel road. DW and I have many multiples of that average retirement savings amount, but nowhere near you folks with 30x to 50x expenses. According to the data I've been able to find, our net worth is in the top 5% or so for people our age and income level, but geez, we've got a lot of holes in our own game plan that we're trying to plug, not to mention externalities like an oft-reduced pension (i.e. supposed to be 30% of pre-retirement income 20 years ago, now 3%...) and shaky SS numbers.

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Re: % bogleheads of overall population

Postby in_reality » Fri Jul 14, 2017 1:02 am

asif408 wrote:A little basic math: About 62,000 Boglehead members, US population is about 320 million (world population about 7.5 billion), that equates to <0.1% of the population depending on the population you use in the denominator. Any way you look at it, Bogleheads are nowhere near a majority of the population.

Just remember when you visit here that you are in the Boglehead bubble. A nice group to be in a bubble with, but still in a bubble.


I am not so sure.

Every single media outlet that I've seen has had articles on the advantages of passive index investing. The large inflows to Vanguard, ETFs and passive investing in general show it's becoming "the thing".

Also, if you google something like "expensive coffee invest compound", you will countless articles describing how saving a little and investing it will pay off.

Yes, I agree there is a wide range of willingness and ability to follow the principles, but the basic tenants are much better known than gauging by the number of members + lurkers.
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Re: % bogleheads of overall population

Postby jharkin » Fri Jul 14, 2017 6:34 am

in_reality wrote:
asif408 wrote:A little basic math: About 62,000 Boglehead members, US population is about 320 million (world population about 7.5 billion), that equates to <0.1% of the population depending on the population you use in the denominator. Any way you look at it, Bogleheads are nowhere near a majority of the population.

Just remember when you visit here that you are in the Boglehead bubble. A nice group to be in a bubble with, but still in a bubble.


I am not so sure.

Every single media outlet that I've seen has had articles on the advantages of passive index investing. The large inflows to Vanguard, ETFs and passive investing in general show it's becoming "the thing".

Also, if you google something like "expensive coffee invest compound", you will countless articles describing how saving a little and investing it will pay off.

Yes, I agree there is a wide range of willingness and ability to follow the principles, but the basic tenants are much better known than gauging by the number of members + lurkers.


The large inflows alone dont prove anything when we remember that vast majority of that money flowing in is concentrated in the top 5-10% of families:

Image

The fact that indexing is mentioned everywhere up to including Jim Cramer's show! (see other recent thread) tell us that the word is getting out, but the numbers tell us that most people still are not acting on it. I'm sure you have seen the other studies that show the majority of Americans are still effectively financially illiterate:

http://fortune.com/2016/07/12/financial-literacy/
https://www.thestreet.com/story/1366024 ... s-bad.html


And it gets even more complicated. Folks who have been financially savvy all their lives and where raised by financially savvy parents often dont realize how hard it is to get back on track once you have made some mistakes. Hit a rough patch and mess up your credit and you become victim to predatory lending practices and loose all the freebies like nearly free lending, credit bonuses and points, etc that we all take for granted. And Im not talking about people who run up balances on their credit cards... I'm talking about things like the payday loan and subprime auto lending industries (Search youtube for John Oliver's profiles on both)

Related to this the Atlantic had an interesting take on the Financial literacy study above
https://www.theatlantic.com/business/ar ... cy/480807/

Portfolio7 wrote:Is everyone registered on this site considered a boglehead? I've done some unbogle-ish things in the past, and probably will in the future.... :twisted: I'm at least traveling the same direction, if maybe on a mostly parallel road. DW and I have many multiples of that average retirement savings amount, but nowhere near you folks with 30x to 50x expenses. According to the data I've been able to find, our net worth is in the top 5% or so for people our age and income level, but geez, we've got a lot of holes in our own game plan that we're trying to plug, not to mention externalities like an oft-reduced pension (i.e. supposed to be 30% of pre-retirement income 20 years ago, now 3%...) and shaky SS numbers.


Don't feel so bad, you are not alone. I mentioned the point about parents above to highlight the fact its much easier to be a BH superstar if you had a headstart from your parents or chose an occupation with stratospheric income (MD, law). I'm in the same boat as you - we where quite poor when I was a kid, my parents have no savings and live on SS now, had to pay for my own college, my own wedding, my own house and help them along the way. Hence I am no where near a 7 figure portfolio in middle age in spite of my finding the light here in my 30s.

But I'll get there eventually, and you will too. Stay positive.

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Re: % bogleheads of overall population

Postby CyclingDuo » Fri Jul 14, 2017 8:37 am

sport wrote:
PhysicsTeacher wrote:
Crisium wrote:Some bogleheads cannot contribute that much. I can't.


Agreed! Although this forum skews to high income earners, it is entirely possible to follow Boglehead principles on a moderate income. I make $38k per year. My husband recently got a raise to $22 per hour. I have mandatory pension contributions, we max two Roth IRAs, and we're saving for a downpayment on a house. We utilize DH's 401(k) and my 403(b), but we aren't yet anywhere close to the maximum contribution. I don't think that makes us failures.

I never was able to make a maximum contribution to my 401k. I am now comfortably retired. The trick is to start saving when you are young and take advantage of compound growth.


Whoever and why ever the silly beat of the drum "you must max out your 401k" is banged so dang loudly on these forums seems way over the top to us. :annoyed

How about talking about over-saving for retirement, and destroying one's cash flow by over-saving to the detriment of a household's monthly cash flow? The big three - home/transportation/food - need to be paid for as well. Balance is key, and not over-saving for retirement or over-spending on the big three will keep one's fiscal household in solid shape. An individual needs to have an annual income of $120,000 in order for the maximum contribution of $18K to equal 15% of one's income being saved for retirement (and that's before the employer match).

Just sticking with the financial planning community's general guideline of saving 10-15% of your income starting in your 20's for retirement, a lot of wealth can be accumulated over one's 35-40+ year working career even if an individual never makes it to a salary above $100K.

The Vanguard study of all of their 401K plans showed that the aggregate contribution (employee + employer match) was...

Aggregate contributions

Taking into account both employee and employer contributions, the average total participant contribution rate in 2016 was 10.9% (estimated, see the Methodology section on page 106) and the median was 10.0% (Figure 40).


That meets the lower band of the financial planning community's general guideline of saving 10-15% for retirement.

We've never maxed our employer sponsor plans out, but focused on contributing about 15% of our salary into retirement funds since our 20's. We have never had the type of income required to max out a 401k plan, let alone two 401k/403b plans in our dual income household with two children, saving and paying for college, owning a home, paying for transportation, and the other biggie expense - food. Yet, here we are 30 years later and are absolutely on target for a secure retirement.

If one looks at a study on the salary arc, you will find that women hit their peak at age 39, and men at age 48. After that, it is usually only small bumps in salary increase. That also helps explain why getting going with saving 10-15% in your 20's to take advantage of the power of time and compounding is so important. Counting on huge salaries later in one's career to be able to "max out a 401k" is simply not going to happen for most.

When one talks about maxing out your 401K first (let's go with the under age 50 max of $18K), think about what that means as a percentage of annual income to an individual with a salary of....

$35,000 = 51%
$42,000 = 43%
$50,000 = 36%
$65,000 = 28%
$80,000 = 23%
$95,000 = 19%
$120,000 = 15%

The percentage of people making enough money to max out their 401K's without a detriment to the rest of their household cash flow during their working years is small indeed. It's far more realistic to tweak the percentage to what one can afford.

There are plenty of options - especially in a dual income household - to save and stay on target to reach one's goals without having to max out a 401K. We think the data clearly shows that in the Vanguard study in terms of the percentage of people in the plans Vanguard sponsors, it's a very small percentage that max out their plan.

We would assume that may be true here at BH's as well. It is clearly tied to salary level, household cash flow, and in our opinion is not a must goal to max out the 401K.

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Re: % bogleheads of overall population

Postby KarenC » Fri Jul 14, 2017 8:57 am

inbox788 wrote:The denominator is easily estimated at 7.5B world population.

http://www.worldometers.info/world-population/

You might want to narrow that to English speakers; according to Wikipedia, that number is 983 million.
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Re: % bogleheads of overall population

Postby Watty » Fri Jul 14, 2017 9:04 am

sport wrote:
PhysicsTeacher wrote:
Crisium wrote:Some bogleheads cannot contribute that much. I can't.


Agreed! Although this forum skews to high income earners, it is entirely possible to follow Boglehead principles on a moderate income. I make $38k per year. My husband recently got a raise to $22 per hour. I have mandatory pension contributions, we max two Roth IRAs, and we're saving for a downpayment on a house. We utilize DH's 401(k) and my 403(b), but we aren't yet anywhere close to the maximum contribution. I don't think that makes us failures.

I never was able to make a maximum contribution to my 401k. I am now comfortably retired. The trick is to start saving when you are young and take advantage of compound growth.


It also helps to live in the 80% to 90% of the contry where housing costs are reasonable.

The median single family home price in the US is $232,000.

https://www.nar.realtor/topics/metropol ... ordability

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Re: % bogleheads of overall population

Postby CyclingDuo » Fri Jul 14, 2017 8:50 pm

Watty wrote:
sport wrote:
PhysicsTeacher wrote:
Crisium wrote:Some bogleheads cannot contribute that much. I can't.


Agreed! Although this forum skews to high income earners, it is entirely possible to follow Boglehead principles on a moderate income. I make $38k per year. My husband recently got a raise to $22 per hour. I have mandatory pension contributions, we max two Roth IRAs, and we're saving for a downpayment on a house. We utilize DH's 401(k) and my 403(b), but we aren't yet anywhere close to the maximum contribution. I don't think that makes us failures.

I never was able to make a maximum contribution to my 401k. I am now comfortably retired. The trick is to start saving when you are young and take advantage of compound growth.


It also helps to live in the 80% to 90% of the contry where housing costs are reasonable.

The median single family home price in the US is $232,000.

https://www.nar.realtor/topics/metropol ... ordability


Yup, that would be about 91% of the US if you remove LA area, San Francisco Bay Area, and NYC greater area.

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Re: % bogleheads of overall population

Postby Helo80 » Fri Jul 14, 2017 8:52 pm

I can almost guarantee you that 99.5% of the population has no idea who Jack Bogle is or what a "boglehead" is.

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Re: % bogleheads of overall population

Postby mickeyd » Sat Jul 15, 2017 2:00 pm

I am sure that there are hundreds of thousands of our fellow citizens that have a Boglehead sense about them, but have not been shown the way here. Remember, at one time none of us were BHs, but still had a sense that investing by using low-cost funds like VG just made sense. It's still a # <1% of the investing population.
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Re: % bogleheads of overall population

Postby Johnnie » Sat Jul 15, 2017 3:03 pm

The max 401k contribution is the same whether you earn $20k/year or $120k. So talking about contribution practices of households makes no sense without the additional context of income.

I feel for those making the median income who have a couple kids, some college debt, a mortgage and a car loan. No matter how frugal the lifestyle it is hard to get ahead.

I have a whole lot less sympathy for those with higher incomes and/or without those particular expenses who allow "lifestyle creep" to gobble up money that should go to saving and investing. People for whom it would be no meaningful sacrifice to max x 2 (401k & Roth) but don't. I don't get that.
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Re: % bogleheads of overall population

Postby TD2626 » Sat Jul 15, 2017 3:47 pm

Vanguard is pretty big - and there's a lot in etfs and index funds at other companies too. Of course, not all Vanguard investors are Bogleheads and not all Bogleheads use Vanguard... but Vanguard's size is telling.

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Re: % bogleheads of overall population

Postby Mel Lindauer » Sat Jul 15, 2017 4:35 pm

triceratop wrote:
just frank wrote:I would think that one of the mods could tells us the number of site members (including lurkers) and we could divide by 300MM and call it good enough. I'd guess its pretty small. We're not 4Chan. :D

There are people that hit the max that are not Bogleheads, and Bogle-head types that do not hit the max.


Check out the footer on the forum index: 61304 members. Difficult to say how many lurkers there are, but look at the ratio of members to lurkers at any given time.


Over time, the # of lurkers vs members online at any one time usually runs about 10-12 times, favoring the lurkers. And often, when lurkers finally register so they can make a post, they say that they've been lurking for years.
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Re: % bogleheads of overall population

Postby Mel Lindauer » Sat Jul 15, 2017 4:38 pm

Another interesting stat: The average # of unique visitors per day is around 70,000 and we get up to 90,000 unique visitors on some days.
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Re: % bogleheads of overall population

Postby mickeyd » Sun Jul 16, 2017 3:51 pm

The average # of unique visitors per day


Who qualifies as a unique visitor Mel?
Part-Owner of Texas | | “The CMH-the Cost Matters Hypothesis -is all that is needed to explain why indexing must and will work… Yes, it is that simple.” John C. Bogle

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Re: % bogleheads of overall population

Postby book lover » Sun Jul 16, 2017 4:22 pm

Remember reading that one out of twenty people would retire financially independent. While those people are not all Bogleheads, many of them probably follow the principles talked about on this forum.

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Re: % bogleheads of overall population

Postby Mel Lindauer » Mon Jul 17, 2017 6:48 pm

mickeyd wrote:
The average # of unique visitors per day


Who qualifies as a unique visitor Mel?


One individual.
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Re: % bogleheads of overall population

Postby Thesaints » Tue Jul 18, 2017 10:18 am

CyclingDuo wrote:
Yup, that would be about 91% of the US if you remove LA area, San Francisco Bay Area, and NYC greater area.


Where, who knows why, higher incomes are a lot less uncommon than in the rest of the nation...

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Re: % bogleheads of overall population

Postby flamesabers » Tue Jul 18, 2017 11:38 am

Johnnie wrote:The max 401k contribution is the same whether you earn $20k/year or $120k. So talking about contribution practices of households makes no sense without the additional context of income.


I agree. This is my first year of maxing out my 401k and with a pretax income of about $50k, I certainly notice the reduction in disposable income.

For me being a boglehead is more about avoiding non-mortgage debt, taking advantage of financial opportunities, and not having to live paycheck-to-paycheck. Maxing out your 401k every year is a good financial goal, but I don't think it should be what defines a person as a boglehead or not. If for instance you're making a lot of money and funneling $18k in your 401k every year for the tax deduction without paying any attention to what fund(s) your money is going into, that doesn't strike me as being much of a boglehead.

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Re: % bogleheads of overall population

Postby Da5id » Tue Jul 18, 2017 11:45 am

asif408 wrote:A little basic math: About 62,000 Boglehead members, US population is about 320 million (world population about 7.5 billion), that equates to <0.1% of the population depending on the population you use in the denominator. Any way you look at it, Bogleheads are nowhere near a majority of the population.


I think that there are many "Bogleheads" who don't read or even know about the forums. I was a "Boglehead" long before finding the forums, saving large portions of my income and investing only in index funds (except for silly 401k that wouldn't let me at various points). I had also read Bogle's "Common Sense on Mutual Funds" long before finding these forums.

So I'd guess there is rather more than 0.1% of the population who live beneath their means, save aggressively, and (based on Vanguards inflows) have discovered that costs matter. aka Bogleheads :)


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