Savings - how much should I have by now?

gozomark

agree with you jon - in a one off hand a professional has maybe only a 51% chance of beating an amateur, but over several hours that turns into a 90% plus chance. Over a year of playing, it becomes practically 100%

they would probably make good stockmarket traders/market makers, particularly in options, and also race course bookies. All are basically about the same thing, an instinctive feeling for numbers

jon3001

nobby24 wrote: »

I presume they must be talking about single people with no incumbents? How about a 29 year old, married with two kids and with negative equity or waiting for his house to be repossessed or recently made redundant? £91,000! Must be the Old Etonian newsletter!

£91,000 is based on a 26-year old earning £35K/yr.

The formula is: Average Wealth (not including home equity & inheritences) = 0.1 * Age * Income.

Many people will be below average. They don't like being below average and try to rationalise it.

Lokolo

But the people you descibe (the poker people + website person) aren't necccesarily PAWs, they could be living well beyond their means and could be losing wealth every second......

I don't think you are a UAW or a PAW by how much wealth you've attained, but how you spend the money you earnt (as it also says in the book)

londonman81

Many people will be below average. They don't like being below average and try to rationalise it.

I wonder what the true average is. i.e sum up all savings of all 26 year olds earning £35k and divide by the number of 26 year olds earning £35k.

I doubt you will find that the average saving of those 26 years olds (on £35k) is anywhere near £91,000....

I might be wrong, but I doubt it...

jon3001

Lokolo wrote: »

But the people you descibe (the poker people + website person) aren't necccesarily PAWs, they could be living well beyond their means and could be losing wealth every second......

That's true. But some people have a hard time believing that such young people could have had the possibility to create a fortune, or even just average wealth.

Lokolo wrote: »

I don't think you are a UAW or a PAW by how much wealth you've attained, but how you spend the money you earnt (as it also says in the book)

Yes - living well below one's means is a trait many PAWs share.

Reaper

The minimum savings you should have is enough to cover 3 months spending - the theory being that gives you time to find a new job if you lose yours (though in the current climate it may take longer so you might want to extend that).

The average savings people have is almost double that at 167 days (5.5 months) according to Birmingham Midshires. [though figures 2 years old now]

So if you want to know what you need to be considered "well off" - the answer is anything above that.

lr1277

jon3001 wrote: »

£91,000 is based on a 26-year old earning £35K/yr.

The formula is: Average Wealth (not including home equity & inheritences) = 0.1 * Age * Income.

Many people will be below average. They don't like being below average and try to rationalise it.

The formula assumes you have earned money for every year of your life at your current salary, including when you were a baby.

Or if you are ambitious you could go by Kiyosaki's formula which I am precising:
The number of days you can survive on your passive income (i.e. income that you do not have to work for).

If you monthly passive income is £2k and your monthly expenses are £1.9k, then you can live foreever without working and you would be considered wealthy.

Good luck!

jon3001

lr1277 wrote: »

The formula assumes you have earned money for every year of your life at your current salary, including when you were a baby.

Where is that assumption? Even if it were true - what is the income of a baby and its expected average wealth?

The formula assumes nothing. I keep repeating this: it's a fit based on a regression of statistical data of people's actual ages, incomes and wealths. You don't like the data? Sorry...

amistupid

jon3001 wrote: »

The formula assumes nothing. I keep repeating this: it's a fit based on a regression of statistical data of people's actual ages, incomes and wealths. You don't like the data? Sorry...

Lies, damn lies and statistics. I'll use British stats, let's say our 26 year old, £35,000 per year, net about £26,000, average mortgage is currently 40% of take home pay, leaves about £16.000, average utilities, Council Tax etc about £3,000,
leaves about £13,000, average unsecured debt £3,000, £10,000 left to pay for food and clothing. How much left to save, not much I fear

Lokolo

amistupid wrote: »

Lies, damned lies and statistics. I'll use British stats, let's say our 26 year old, £35,000 per year, net about £26,000, average mortgage is currently 40% of take home pay, leaves about £16.000, average utilities, Council Tax etc about £3,000,
leaves about £13,000, average unsecured debt £3,000, £10,000 left to pay for food and clothing. How much left to save, not much I fear

Visit the DFW board. If a person on £35k a year did what they did, for instance, the spend £4k a year. You would be able to save at least £15k a year.