Those with high savings rate: why?

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assadshafie
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Re: Those with high savings rate: why?

Post by assadshafie » Fri Mar 16, 2018 2:03 am

Because it's socially and environmentally responsible.

TheOscarGuy
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Re: Those with high savings rate: why?

Post by TheOscarGuy » Fri Mar 16, 2018 5:40 am

EGARCH wrote:
Thu Mar 15, 2018 7:25 pm
  • Is it because you want to retire early, or
  • You are not sure what the future holds, e.g. low job security, or
  • You want to leave money to others, e.g. kids, grand kids, charity, or
  • You have no interest in increasing your consumption now, including giving more money to charity
  • etc.
Any insights?
Financial freedom/independence. I want to be able to get to [having enough money to quit- moderator prudent], not because I anticipate having to do it anytime soon but because I want the choice. I have a great career with interesting work. I am not sure what future holds. But I would like the option to be able to walk away.

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Re: Those with high savings rate: why?

Post by blaugranamd » Fri Mar 16, 2018 5:42 am

FIRE and I don't have a need to spend most of what I save.
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Re: Those with high savings rate: why?

Post by Shikoku » Fri Mar 16, 2018 6:01 am

I do not save because I want to retire early; I enjoy my work which is my main hobby and relaxation. I have a highly-secure low-stress job but occasionally it comes in my mind whether I will stay healthy to continue working as my father's health fell apart when he was in his late forties; fortunately, I have no health issue at 51, knock on wood.

I save because our single-income family needs safety in case I kick the bucket before kids graduate from college, and I do not like my wife to straggle for money in my absence as she has sacrificed a lot for our family.

I save because I want to fund my kids undergraduate education irrespective of the price tag but I have no plan to leave money for the kids.

I am not frugal but not very much a spender also; I operate without any budget. I save because I do not have any additional need beyond a nice suburban home we live in and a low-end luxury car I drive. I save because it feels good and money gives me confidence.
"I don't worry too much about pointing fingers at the past. I operate on the theory that every saint has a past, every sinner has a future." -- Warren Buffett

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Re: Those with high savings rate: why?

Post by Rebecca_S » Fri Mar 16, 2018 6:03 am

Fear, security, independence, future happiness.

But in addition, the marginal utility of spending. I have a quite nice life spending at my current level, there isn't anything that I really feel I'm missing out on. We have gotten good at spending money on things that make us happy and not spending money on the other things. So every time I get a raise/bonus I consider if there is anything I would like to spend on, but mostly the thing I want is extra time!

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Re: Those with high savings rate: why?

Post by Grt2bOutdoors » Fri Mar 16, 2018 6:45 am

Have you looked at the high price of paying for a college education?

Have you looked at the consistent price inflation of healthcare?

Ever have anyone (landlord) knock on your door at tell you to get out?

Ever see mass layoffs or drip by drip layoffs via offshoring of employment?

How about having benefits cut? You start a job where the employer crows about their fantastic pension and profit-sharing, then right about the time you would start accruing the majority of your benefit they freeze the plan, informing employees about a better option - the 401k with a generous match, only you are now starting off at the beginning again only to find out that the match they talked about has been cut or eliminated.

Depend on yourself only, if you get something extra, take it of course, but don’t stop saving and investing on your own - you’ll always have it so long as you invest in a prudent manner. Try borrowing some money. You’ll appreciate the freedom of having options.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

scrabbler1
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Re: Those with high savings rate: why?

Post by scrabbler1 » Fri Mar 16, 2018 6:48 am

EGARCH wrote:
Thu Mar 15, 2018 7:25 pm
  • Is it because you want to retire early, or
  • You are not sure what the future holds, e.g. low job security, or
  • You want to leave money to others, e.g. kids, grand kids, charity, or
  • You have no interest in increasing your consumption now, including giving more money to charity
  • etc.
Any insights?
For me, Items #1 and #4, in that order. I retired 9 years ago at age 45, so I already reaped the benefits of a high savings rate, and will do so indefinitely.

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Re: Those with high savings rate: why?

Post by fourwheelcycle » Fri Mar 16, 2018 7:11 am

My wife and I met in grad school when we were poor, poor, poor. Also, we both had parents who came of age during the depression (1930s - that one) and passed on very modest spending habits to us. We did not have children until seven or eight years after we were married; by that time our grad student spending habits were pretty well established as the baseline for our adult life.

As others have noted, we never felt we were sacrificing anything to save.

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Re: Those with high savings rate: why?

Post by mak1277 » Fri Mar 16, 2018 7:30 am

High savings rate for us is pretty much by accident. Highly compensated and our tastes haven't evolved all that much from when we were new college grads without any money. We were accidentally high-rate savers long before realizing that early retirement was an option. Now that's the "goal" I suppose, but really nothing has changed...we buy whatever we desire, take the trips we want, etc....we just can't keep up with increasing pay.

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Re: Those with high savings rate: why?

Post by bloom2708 » Fri Mar 16, 2018 7:30 am

Amphian wrote:
Fri Mar 16, 2018 1:41 am
bloom2708 wrote:
Thu Mar 15, 2018 7:45 pm
Your 50 year old future self does not want to work 15 or 20 years.
My 50+ self does want to work 15 or 20 more years. I love what I do (software engineer), although I could be happy doing other things too.

Why do I save more than I spend? My 97 year old grandmother died last year. She survived financially the last decade or so because she had four children that stepped up to the plate when her husband's pension wasn't enough to cover rising care costs. I am childfree (by choice).
I have worked with several developers who felt the same. A few worked on the day they died. I guess they don’t care. They are dead. Their spouses and kids likely do. Many paths.

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Re: Those with high savings rate: why?

Post by truenorth418 » Fri Mar 16, 2018 7:53 am

I always thought it would be cool to work really hard and make/save a lot of money early so I could have fun and enjoy life, travel, etc while I was still a young man. So I never bought into the hedonic treadmill lifestyle.

Early in my corporate career I saw my bosses, mentors, good middle aged people get treated very poorly by senior management, disrespected, pushed around. In my companies it was always up
or out. A change in management and another person’s career ruined. I vowed that I would not let that happen to me.

When it did begin to happen to me, I accelerated my savings even more. I ultimately saved over 70% of my after tax income over a 25 year corporate career and retired at age 47. Now I have control over my life and I love it.

squirm
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Re: Those with high savings rate: why?

Post by squirm » Fri Mar 16, 2018 8:05 am

We save a good amount. Although we also think it's wise to spend some, such as vacations. I'm not one that wants to save everything and live in a trailer until I'm 75 so I can have 3 million then die the following year... That's just stupid...

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Re: Those with high savings rate: why?

Post by Hillview » Fri Mar 16, 2018 8:08 am

I want to be able to retire or not worry about money -- I have a history with money -- I grew up insecure financially
I don't want my kids to have to support me -- I have a history with money -- parents were/are dependent on me
I like to have a plan -- the plan cannot be "things will work out" or "things will get better"

We also spend money on vacations mainly. Family vacations are very important to me and my husband.

staythecourse
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Re: Those with high savings rate: why?

Post by staythecourse » Fri Mar 16, 2018 8:08 am

mac808 wrote:
Thu Mar 15, 2018 7:38 pm
I don't even think of it as saving most the time. I think of it as spending. I would just rather buy more stock than a nicer car. I enjoy owning dividend producing things of all kinds.
I'm the same way. When I look at buying anything I look at it with how much gratification I will have not only now, but going forward. I have driven some nice cars (owned by friends) and get bored DURING the drive itself. But I do find a sense of accomplishment/ happiness buying stocks every month. One can argue if that is healthy (probably not), but if I am going to spend money that gives me the most enjoyment with the use of my money. Another great thing is it isn't like investments go out of "style", "breakdown", or go "rotten" so in the future I have more options to give to the charities I am interested in when I choose to do that.

Good luck.
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Calico
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Re: Those with high savings rate: why?

Post by Calico » Fri Mar 16, 2018 8:20 am

I've always been a saver. Back in high school, when other kids would spend their summer job money on fun things, I was putting my money in CDs (I miss those 10% returns!)

Anyway, fast forward, I still saved, got married, still saved, and then my husband left me. In the months before he left me he spent everything I had saved for years (not just the stuff we saved together, but even what I saved from before I met him) and he had stopped my IRA contributions (and I was too naive and trusting and never double checked any of that). So after the divorce, I was suddenly broke and "behind" on saving for retirement and saving in general. In fact, I had a lot of debt because at the time he left, the house was upside down and I was forced to sell (he didn't help with paying off the upside down amount. I had to borrow money from my family), he maxed out the credit cards (for which I was liable for too), and on top of that, I lost my job due to downsizing so I had no income.

It was rough. I should add that I don't think my ex did a lot of this stuff intentionally/out of spite. We parted ways on fairly good terms (he left me because he is gay). He's just "that bad" with money and was going though a huge emotional crisis while he discovered himself. My mistake was not doing my due diligence to watch him better.

Anyway, I've been trying to "make up for lost saving time" since then. I save $2,800 a month (which works out to 39% of my gross income).
Last edited by Calico on Fri Mar 16, 2018 8:40 am, edited 1 time in total.

TwstdSista
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Re: Those with high savings rate: why?

Post by TwstdSista » Fri Mar 16, 2018 8:28 am

Why not? We have plenty, don't really need anymore. What else am I going to do with it?

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Re: Those with high savings rate: why?

Post by Glockenspiel » Fri Mar 16, 2018 8:51 am

I want to retire when we’re in our low-mid 50s (33 now), so we can travel the world and do what we want. I worry that if we wait to retire until late 60s that we won’t have the energy to travel the way that I want to.

I grew up lower-middle class and feel that living extravagantly is a waste of money. My wife and I are both relatively frugal by nature (both growing up in small Midwestern towns). I feel our lifestyle has already creeped up because I no longer look at the prices of items in the grocery store.

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Cyclesafe
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Re: Those with high savings rate: why?

Post by Cyclesafe » Fri Mar 16, 2018 9:07 am

Early on saw the consequences of not providing for an uncertain future. My wife and I didn't want to be those people. When I got fired at 45, we were already financially independent and we chose to "retire" at the same standard of living as when I was working. We are now in our 60's and don't regret for a minute our decision. If we had partied like it was 1999 (and it was) I probably would still be working.....

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Re: Those with high savings rate: why?

Post by jehovasfitness » Fri Mar 16, 2018 9:09 am

Glockenspiel wrote:
Fri Mar 16, 2018 8:51 am
I want to retire when we’re in our low-mid 50s (33 now), so we can travel the world and do what we want. I worry that if we wait to retire until late 60s that we won’t have the energy to travel the way that I want to.

I grew up lower-middle class and feel that living extravagantly is a waste of money. My wife and I are both relatively frugal by nature (both growing up in small Midwestern towns). I feel our lifestyle has already creeped up because I no longer look at the prices of items in the grocery store.
Same here, but on that note, I'd rather reduce savings a little and travel more now in our 30s than 50s, based upon the trips we like to take, hiking and such.

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Re: Those with high savings rate: why?

Post by stoptothink » Fri Mar 16, 2018 9:17 am

Sarah Saverdink wrote:
Thu Mar 15, 2018 8:03 pm
We currently live a very enjoyable and comfortable lifestyle on less than half our income. Spending more would not increase our happiness in a meaningful way, so we save with the hope that it will provide flexibility in our future life choices (ie early retirement). As our income has grown over the years, we've spent more on vacations and some hobbies, but we don't have a desire to spend the money just for the sake of it.
Pretty much this. On less than half of our pre-tax income, we live a lifestyle which is so far removed from the abject poverty both my wife and I grew up in. Even though we live in a home which is way below our means (value ~1.1x household income), share a single car that we bought in cash new for approximately a month's income, and don't go on lavish vacations; we want for nothing (well...my wife would eventually like more home). Furthermore, we want to model to our children that happiness isn't derived through the accumulation of "stuff". We have made an agreement that they'll never be aware of how much in financial assets we have, until they have to (inheritance/will planning). Lastly, both our parents are retirement age (late 50's/early 60's) and in dire financial straights. Her parents have already been somewhat financially dependent on us the last few years, and it appears will be totally and permanently so within the next handful of months, while my parents have zero retirement savings, although there is the possibility that a combination of social security and my stepfather's very small pension will ultimately meet their needs. We have 9 siblings between us, but nobody else is in a position to help but us. In their shoes, I would be completely ashamed of myself knowing that I put my children in that position when they were just starting their own family (we're early/mid 30's with two small children). I will never put my children in that position.

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Re: Those with high savings rate: why?

Post by sschoe2 » Fri Mar 16, 2018 9:24 am

I am very insecure regarding my ability to earn a living.

I am a chemist and though I have a good job now that is pretty secure if I ever lost it I'd be up a smelly creek. Most companies don't even want to hire chemists and use staffing/contract agencies and I frequently have to tell recruiters to blow off after offering me half my current pay rate and no benefits some as low as $15-20 hour. Chemistry is a dying profession.

Therefore I want to have a very large safety net so I have the option of either leaving the profession or retiring early.

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Re: Those with high savings rate: why?

Post by Random Poster » Fri Mar 16, 2018 9:27 am

I have one simply because I thought that it was a requirement in order to post on this forum.

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Re: Those with high savings rate: why?

Post by randomizer » Fri Mar 16, 2018 9:30 am

EGARCH wrote:
Thu Mar 15, 2018 7:25 pm
  • Is it because you want to retire early, or
  • You are not sure what the future holds, e.g. low job security, or
  • You want to leave money to others, e.g. kids, grand kids, charity, or
  • You have no interest in increasing your consumption now, including giving more money to charity
For me it is (1) and (2) above all. Would love to be able to do (3) as well, but unclear whether will be able to, despite modest consumption (4) — at the least the offspring can expect to inherit the house one day, probably, but nothing in life is certain and it's wise not to count on windfalls, as you know.
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Re: Those with high savings rate: why?

Post by Clever_Username » Fri Mar 16, 2018 9:33 am

TwstdSista wrote:
Fri Mar 16, 2018 8:28 am
Why not? We have plenty, don't really need anymore. What else am I going to do with it?
Yep, that's me. I bring home $Y. Even with a big house to myself (nearly three quarters of a million dollars in purchase price), I'm spending $X << $Y. I could up my spending to meet the money flowing in or I could put the money in savings. I don't have any desire to do the first so I do the second.

I remember my first full-time job that had a 401(k). I started in July of that year and was eligible for the 401(k) in my first August paycheck, leaving ten paychecks to contribute. I asked them to max it out. They asked if I was sure; that's $1700/month I wouldn't be getting to spend. I guess it wasn't a universal request.

So I guess from the OP choices, it's mostly lack of interest in increasing consumption now. I suppose I like the option of retiring early. I don't quite know what the future holds, but my job security is pretty good.
"What was true then is true now. Have a plan. Stick to it." -- XXXX, _Layer Cake_

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Re: Those with high savings rate: why?

Post by Runner01 » Fri Mar 16, 2018 9:39 am

For us I think it is 2 main points.

1. No desire to stretch our housing and auto budgets like many Americans. We are perfectly happy driving $10,000 used cars and living in our 1,100 sq ft house (living in a lower cost of living area also helps).

2. A lesser version of depression era mentality. Entering the job market between the dot com bubble and the Great Recession has caused us to never count on our salaries increasing or even consistently having a job (we have been lucky in this regard though).

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Re: Those with high savings rate: why?

Post by SuperGrafx » Fri Mar 16, 2018 9:42 am

Bottomline...I save a large portion of my income to guarantee me an early and comfortable retirement.

I have zero intentions of leaving any money for heirs OR donating to charity.
My taxes support charities as far as I'm concerned.

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Re: Those with high savings rate: why?

Post by Ice-9 » Fri Mar 16, 2018 10:15 am

For about 7 to 8 years during most of which time I was a single renter, I saved 25% to 40% of gross income each year. I knew this was high, but felt I was getting a late start at saving for retirement in my early thirties and could use the boost. I figured that was the time to do it, especially while having no kids.

I'm glad I did it then. For the last five years as a married home owner who is saving for adoption and other big expenses, I've only been saving 15% to 22% of gross each year. We've made several big improvements to the home during this time too. Going forward, I'm assigning myself a floor of 15% savings rate and trying my best to add on to that throughout the year.

According to Fidelity's famous retirement-savings-should-be-a-multiple-of-your-current-income guideline, we're slightly ahead of the game saving for retirement. I don't think we'd be there if it weren't for those 7 or 8 high-savings-rate years while I was a single renter.

rayson
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Re: Those with high savings rate: why?

Post by rayson » Fri Mar 16, 2018 10:22 am

Why? since I'm addicted to watching net worth grow towards target early retirement number.. :beer

tesuzuki2002
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Re: Those with high savings rate: why?

Post by tesuzuki2002 » Fri Mar 16, 2018 10:41 am

EGARCH wrote:
Thu Mar 15, 2018 7:25 pm
  • Is it because you want to retire early, or
  • You are not sure what the future holds, e.g. low job security, or
  • You want to leave money to others, e.g. kids, grand kids, charity, or
  • You have no interest in increasing your consumption now, including giving more money to charity
  • etc.
Any insights?
I don't know what I want to spend it on... so I'm holding it until I figure that part out.

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Re: Those with high savings rate: why?

Post by JBTX » Fri Mar 16, 2018 12:05 pm

I don’t save as much as some on here, but
EGARCH wrote:
Thu Mar 15, 2018 7:25 pm
  • Is it because you want to retire early, or
That was partly it. Or I at least wanted the flexibility to make that decision.

  • You are not sure what the future holds, e.g. low job security, or
To some degree. Didn’t like the idea of being totally dependent to the whims of any particular employer.


  • You want to leave money to others, e.g. kids, grand kids, charity, or
That wasn’t really a factor before kids, but now is, especially with a special needs child.
  • You have no interest in increasing your consumption now, including giving more money to charity
  • etc.
Any insights?
My parents were healthy savers. We generally lived modestly. I took finance courses in school and learned about the long term compounding potential of savings. I found that having savings made me feel better than having material things

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Re: Those with high savings rate: why?

Post by Ependytis » Fri Mar 16, 2018 12:23 pm

The reason l save so much (more than 50%) is to buy time. No matter how wealthy a person is they have a limited time on earth therefore I want to convert my human capital into financial capital in the shortest possible time frame without compromising my lifestyle.

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Re: Those with high savings rate: why?

Post by gotester2000 » Fri Mar 16, 2018 12:42 pm

Freedom - this is the most important aspect of life and being FI gives you exactly that.

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Re: Those with high savings rate: why?

Post by retire57 » Fri Mar 16, 2018 12:48 pm

Money gives you options. Our incomes always exceeded our expenses because we live simply, so saving a lot wasn't a sacrifice.

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Re: Those with high savings rate: why?

Post by BradJ » Fri Mar 16, 2018 1:20 pm

1) I am cheap and stingy.....no other nice way to put it
2) I hate shopping.....for anything
3) FREEDOM, FREEDOM, FREEDOM
4) I come from a family that went from riches to rags, so I see money like I see dynamite- powerful but dangerous.

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Re: Those with high savings rate: why?

Post by remomnyc » Fri Mar 16, 2018 1:24 pm

When I started supporting my parents, I started saving money so my future children would not have to support me. When I saw many of my friends and colleagues lose their jobs during the Great Recession, I started super saving so I could survive an extended jobless period and continue to support my family.

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Re: Those with high savings rate: why?

Post by Dulocracy » Fri Mar 16, 2018 1:45 pm

Fear. Fear that I will run out of money. Fear the stock market will plummet like in Japan and never return. Fear that my wife will not be taken care of in her older years. Acknowledgement and fear that I have not saved nearly enough at the point in life where I find myself. Fear about the future of Social Security. Fear of the uncertainty of being a business owner and wanting to make hay while the sun shines. Fear that I will somehow become disabled and be unable to work. Fear that if I do not set aside the money now I will forever hate myself for being irresponsible. Fear is a great motivator.
I'm not a financial professional. Post is info only & not legal advice. No attorney-client relationship exists with reader. Scrutinize my ideas as if you spoke with a guy at a bar. I may be wrong.

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Re: Those with high savings rate: why?

Post by Ron » Fri Mar 16, 2018 1:49 pm

1. In order to retire early (did so at age 59; not early according to many, but earlier than I originally planned in my early years).
2. To leave a substantial estate for my/our disabled son, with the understanding that at least 50% will be lost to investment/lawyer's fees to manage the trust over the projected lifespan of 22+ years after we're both gone.

- Ron

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Re: Those with high savings rate: why?

Post by iamlucky13 » Fri Mar 16, 2018 2:22 pm

My savings rate is not remarkably high (retiring in our 50's is unlikely to be an option except in the best market scenarios), but I'm pretty sure it's significantly higher than most of my peers (in terms of both age and approximate income), so I'll add my 2 cents.
Is it because you want to retire early
Yes, or at least I'd like to have the option. With a 15% retirement savings rate, I estimate being able to retire at 62 should be pretty reasonable under most long term market returns, but there's 1 in 5 odds historically (Source - also note Larry Swedroe's argument in post 5) the stock returns over 30 years will be less than 5% inflation adjusted, which would probably mean I extend my career.
You are not sure what the future holds, e.g. low job security, or
Also this, and I did just lose my job recently. Fortunately, having been making non-trivial taxable savings means I can take some time finding my next job, so that hopefully it will be one I can be satisfied with for long time.
etc.
A new house. We like our current house acceptably, but we do think of it as a "starter" home (where as many of our peers bought as their first homes very large, nicely appointed houses). We'd like to upgrade in 5-10 years as our kids grow.

Housing prices are high enough where we live that I have serious doubts about being able to make the mortgage payments on a future upgrade home without compromising our goals for retirement savings, education savings, and charitable giving, unless we have extra savings available.

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Re: Those with high savings rate: why?

Post by lthenderson » Fri Mar 16, 2018 2:59 pm

EGARCH wrote:
Thu Mar 15, 2018 7:25 pm
  • Is it because you want to retire early, or
  • You are not sure what the future holds, e.g. low job security, or
  • You want to leave money to others, e.g. kids, grand kids, charity, or
  • You have no interest in increasing your consumption now, including giving more money to charity
  • etc.
Any insights?
Initially it was because I wanted to retire early and to some extent, I have achieved that. I was raised by a family of fiscally conservative people and became that way by their nurturing so I have no desire to increase my consumption even now that I am not working anymore. I have increased my charitable contributions both in time and treasure mostly because it makes me feel good to give back to others. Starting out, leaving money to others was not a priority but as time has gone by and the money keeps compounding faster than I can spend it, it has become a reality.

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Re: Those with high savings rate: why?

Post by LadyGeek » Fri Mar 16, 2018 3:05 pm

This thread is now in the Personal Finance (Not Investing) forum (savings rate).
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HRPennypacker
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Re: Those with high savings rate: why?

Post by HRPennypacker » Fri Mar 16, 2018 3:12 pm

Because I'm anxious and it helps me sleep.

Jon H
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Re: Those with high savings rate: why?

Post by Jon H » Fri Mar 16, 2018 3:16 pm

I'm saving for FI. With FI, there is more time flexibility and an increased breadth of life options.
Consider gain and loss, but never be greedy and everything will be alright (fortune cookie)

Shikoku
Posts: 270
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Location: USA

Re: Those with high savings rate: why?

Post by Shikoku » Fri Mar 16, 2018 3:23 pm

squirm wrote:
Fri Mar 16, 2018 8:05 am
I'm not one that wants to save everything and live in a trailer until I'm 75 so I can have 3 million then die the following year...
+1
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"I don't worry too much about pointing fingers at the past. I operate on the theory that every saint has a past, every sinner has a future." -- Warren Buffett

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White Coat Investor
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Re: Those with high savings rate: why?

Post by White Coat Investor » Fri Mar 16, 2018 3:25 pm

EGARCH wrote:
Thu Mar 15, 2018 7:25 pm
  • Is it because you want to retire early, or
  • You are not sure what the future holds, e.g. low job security, or
  • You want to leave money to others, e.g. kids, grand kids, charity, or
  • You have no interest in increasing your consumption now, including giving more money to charity
  • etc.
Any insights?
We haven't found anything else we could spend money on that would make us happier.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course

dknightd
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Joined: Wed Mar 07, 2018 11:57 am

Re: Those with high savings rate: why?

Post by dknightd » Fri Mar 16, 2018 3:30 pm

How do you define a "high savings rate"?
I save about 25% of my pay. Probably higher than national average, but lower than boglehead average.
I like having money in the bank. The more I save now, the less I need in the future to live on.
I like not having to worry about money. Having a little more than I need makes me happy :)

GAAP
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Re: Those with high savings rate: why?

Post by GAAP » Fri Mar 16, 2018 3:38 pm

Because I was raised by depression-era parents that instilled the value of savings.

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HomerJ
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Re: Those with high savings rate: why?

Post by HomerJ » Fri Mar 16, 2018 3:40 pm

EGARCH wrote:
Thu Mar 15, 2018 7:25 pm
  • Is it because you want to retire early, or
  • You are not sure what the future holds, e.g. low job security, or
  • You want to leave money to others, e.g. kids, grand kids, charity, or
  • You have no interest in increasing your consumption now, including giving more money to charity
  • etc.
Any insights?
All the above.

Plus, at a certain point, we realized we had "enough", then all our subsequent raises just went into savings.

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munemaker
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Re: Those with high savings rate: why?

Post by munemaker » Fri Mar 16, 2018 3:56 pm

Financial security

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jose
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Re: Those with high savings rate: why?

Post by jose » Fri Mar 16, 2018 4:07 pm

I think frugality is a gene and perhaps a cultural trait. A value. For a naturally frugal person, saving is not a sacrifice, it is a pleasure.

The marginal utility of expenses diminishes quickly after your basic needs are met. You get more utility from saving than you do from spending.

On top of that, saving gives you an intangible: peace of mind. Freedom. Priceless!

For those with an appreciation of sustainability, frugality is also good for the spirit because it feels like the right thing to do. For those with children or heirs, saving is also generous.

And then, saving only delays material gratification, it does not eliminate it. It's no sacrifice. I can go to the car dealership and look at all the cars knowing that I could easily buy any of them with cash, and I wouldn't even notice it. An then, nah, I don't need a new car. I would feel bad.

So, saving makes me happy and I enjoy it everyday. It is the gift that keeps on giving. Every time I look at my balances, I can be proud, happy and just relax. Spending gives me the opposite feeling: regret, remorse, guilt. There are a few exceptions to this. So, sometimes I do spend if I think it is going to make me feel better. Example, give to others who need it more (and don't overspend themselves!).

This might be shocking to many people because it is opposed to our mainstream consumerist values that we have learned since childhood. I learned it from my parents because I never had an allowance and had to save my coins as a child. Around my home there are lots of expensive restaurants and shops. I have to say I feel some sadness when I see those poor people spending their hard earned money in tickling their palates for 20 minutes with mostly unhealthy food, and then taking antiacids. Been there, done that. I am free and happy now.

So... that's why I save. :wink:

Soon2BXProgrammer
Posts: 539
Joined: Mon Nov 24, 2014 11:30 pm

Re: Those with high savings rate: why?

Post by Soon2BXProgrammer » Fri Mar 16, 2018 6:49 pm

EGARCH wrote:
Thu Mar 15, 2018 7:25 pm
  • Is it because you want to retire early, or
  • You are not sure what the future holds, e.g. low job security, or
  • You want to leave money to others, e.g. kids, grand kids, charity, or
  • You have no interest in increasing your consumption now, including giving more money to charity
  • etc.
Any insights?
i don't think i can endure this pace in life until typical retirement age. either i will be dead and in the box. Or i will be replaced. Either way. i can't earn what i earn today, until a typical retirement.

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