Top American Cities For Savings http://biz.yahoo.com/special/pf091206_article1.html The United States does not do savings. Last year, the personal savings rate as a percentage of disposable income in this country was negative 0.5 percent, by far the lowest of any industrialized nation. In France, the savings rate was 11.6 percent. Germany's rate was a robust 10.6 percent. Japan clocked in at 6.7 percent. What's the problem? Americans like to spend too much, and it's often money we don't have. Revolving credit card debt hit $807 billion in April, according to the Federal Reserve. That's the equivalent of $7,200 per household. "The savings situation in this country is dire, as people are not adding to their savings in the way they should be," says Sophie Beckmann, Financial Planning Specialist at St. Louis-based investment brokerage A.G. Edwards. "People are setting their priorities where savings is not high on the list." With this in mind, A.G. Edwards set out to determine which American cities are doing the best job of building wealth. The result was A.G. Edwards' second annual Nest Egg Index, which ranks the top 500 markets based on their residents' investing and personal savings behavior. Topping this year's list was Los Alamos, N.M., home to the renowned Los Alamos National Laboratory. The lab started in 1943 with one purpose: to design and build an atomic bomb. Since then, it's focused on national security and the safety and reliability of the United States' nuclear arsenal. Los Alamos has a high concentration of managerial and professional jobs. Its place atop the Nest Egg Index can be attributed to the highest household incomes in the country, as well as the high net worth of its residents. The Nest Egg Index looks at the 934 core-based statistical areas defined by the U.S. Census Bureau. It examines 12 categories that influence personal savings categories, including savings and investing propensity; 401(k) and pension plan penetration; home ownership and home values; mortgage and personal debt levels; net worth; household incomes; cost of living; and employment rates. "Rather than just incremental savings, we are looking at people's assets and debt levels," says Beckmann. Clocking in at second place behind Los Alamos is Fairfield County in southern Connecticut. This wealthy enclave outside of New York City is home to the corporate headquarters of General Electric, International Paper and Xerox. As the home to many hedge funds in Greenwich, Fairfield County fittingly tops the Nest Egg Index when it comes to investing propensity. The area also scores highly on housing values and household incomes. Finishing in third place is the San Jose, Calif., area, home to tech titans Cisco Systems, eBay and Intel, among others. Not surprisingly, this area had the highest housing values in the country in 2005, with an average price of $745,000, according to the National Association of Realtors. The area also ranked highly on 401(k) plan participation, investing propensity and low debt levels. While several big cities -- such as Minneapolis, San Francisco and Washington, D.C. -- performed well on the Nest Egg Index, many of the country's biggest areas finished far down the list. Los Angeles came in at 443; Houston fared even worse, at 455. Of the ten largest metro areas as defined by the Office of Management and Budget, only the Washington, D.C.-Northern Virginia metro finished in the top 50 of the Nest Egg Index. A.G. Edwards' Beckmann attributes this to the high cost of living in many of these areas, as well as the fact that many of those who work in these areas commute from other metros (e.g. Fairfield County residents who commute into New York City). What do the best-performing cities have in common? Low debt. All but six regions in the top 50 have personal credit-card debt levels below the national average. Beckmann offers a word of advice for savers: "Get a plan in place, and be disciplined and avoid debt if at all possible." After all, paying 20 percent interest on your debt is a one-way ticket to eroding your nest egg.
It's because I spend money on booze and prositutes. Big Cars, Big HDTVs..., Big Houses, fancy clothes such as belt buckles with diamonds, leather made from the skin of bones of Elk, special shoes hand crafted by little kids in China. stuff like that. That's why i'm broke.
From Boiler Room. This quote is too true. Those ****ing Guineas, half of them do coke. They all drink. No stability, zero capital. They make all this money and they're always living three steps ahead. Do you know there are guys in this firm that make close to a million a year and couldn't get a loan for a Honda because their credit is so bad. Everyone's just waiting for the fifteenth of the month. It's like they may drive a Porsche but they don't have ten bucks to put in the gas tank. ****** rich. This trend is really disturbing, but it just makes it easier not to feel sorry for people.
My wife and I save as much as we possibly can. We put a ton in our 401Ks, Roth IRAs, plus savings beyond that. We probably save 60% of our take home pay. We do this because: 1. My wife may quit and stay home when we have kids. 2. I want to be comfortable later in life and not be a financial burden on my children. 3. I want my children to be able to have as much education as they want to pursue. 4. I don't count on any money from social security once I get to retirement age. So I'm planning for all four, and any that may not take place is just a bonus. If my wife wants to continue working, that's extra, if we are healthy when we are old and not a burden, that's great, if my kids get scholarships...super, and if I get money in social security...I can buy imported beer rather than domestic. We basically decided to live off one take home salary once we got married and bank the rest despite having two salaries. We still are able to afford: 2 drivable, nice, yet older cars. A nice home in a nice neighborhood. We can eat out from time to time. We can take a decent vacation once a year (we don't spend much on vacations because we both have large families that we try to spend as much time as possible with, so we usually end up at family on vacation). We've just never let ourselves live to our income level, so saving has been easy. We also don't make massive salaries...we both started out at entry level jobs 3-4 years ago when we graduated college. Tips for savings that work for us. 1. I can't argue with owning your own home...you build equity, home values tend to appreciate, not depreciate, and the gov't pays almost a third of your interest and property taxes through income tax deductions. Just don't go overboard. Maybe buy the smaller house in a nice neighborhood...or maybe an older house that needs a little TLC, ect. Maybe you don't NEED marble entries and granite countertops, ect. ALthough this is the one place that my wife and I tend to put extra money...I'd rather spend more on an house than on vehicles. 2. Vehicles...Do you really need a BMW, Lexus, Mercedes, ect? Cars are a heavily depreciating asset. Pure cost. 3. Let the savings build your wealth...not investing. Savings is the number 1 way to get rich in America. Invest your money safely, diversified, ect. Go for the steady gain, not the huge windfall. Or if you have a NEED to go for the windfall, use just a little of your savings to try...maybe 5% to play with. 4. Don't let shopping become your hobby. I'll admit that my wife and I find ourselves shopping on the weekends just to pass the time sometimes. When we do that, we almost always spend money that we didn't mean to spend on things we don't really need. Find other hobbies that don't require spending money (or maybe only require spending every once and a while). We now minimize our shopping "hobby" and spend much more time visiting friends and family, working in the yard, playing sports, riding bikes, ect. on the weekends. 5. Make yourself track your spending more than once a month. I check our credit card balance and checking account once a week so there are no "surprises" at the end of the month. 6. Don't carry a balance on your credit card. Why pay a credit card company 20% when you can put that money in the bank? 7. Invest in getting educated. Yes...Bill Gates didn't finish college. But for the average person, a lifetime earnings potential is raised greatly by education. So there are some tips that my wife and I live by. I realize everybody is different. You may have big student loans to pay off, or you had to put an emergency purchase on a credit card, or whatever, but remember that every dollar you save in your 20s is worth far more than any subsequent dollar you save later in life.
When rappers start making songs about saving money instead of booze, ho's, big rims and Escalades, then America will change.
people need to heed the advice of the book, Automatic Millionaire. i loved it and is quite practical.
I save money like crazy. I contribute 10% of every paycheck to my 401K. I put all my band money in a high interest savings account. I pay my credit cards in full every month. I don't buy anything I don't need. Oh yeah, I forgot to mention......I'm still broke.
are you married, do you have kids? edit: don't get me wrong, having kids shouldn't prevent you from saving, and being married definitly shouldn't, I guess actually if you're married with no kids you should really save a lot. I just know its not hard to save when you're single and have no kids.
another thing before people start ripping their fellow americans, this article should talk about income levels of german and japanese workers. its no coincidence that a two cities on this list probably have some of the highest income levels in america, and I would imagine New Mexico is probably one of the cheapest places to live.
No. Not that I'm aware of. I'm not really broke. It just seems like I am because I save so much and I don't like dipping into it unless it's absolutely necessary. Actually, I don't like dipping into it at all. I will be married with kids someday and I don't plan on living off of social security when it's time for me to retire. Who knows if there will even BE social security in 40 years.
i think it has more to do with money management than actual income when it comes to saving. one of my best friends makes twice as much money as i do. he's single, no kids just like me. hell, he doesn't even have a g/f right now. but i still have more in my checking/savings than he does. i'm still not where i want to be b/c of a setback a couple of years ago, but i'm way ahead of him. it really pains me to see him spend the way he does. i've tried to instill some basic financial knowledge in him, but he's too stubborn to listen. i love the guy to death but he's just screwing himself in the future.
I agree, but its still easier to save the more money you make. believe me, I work in an industry where I see a lot of personal financial statements, people who make more money are more likely to save. that's just logical.
In other news, the vast majority of americans who can afford to save are addicted to buying useless crap.
Patrick Ewing: "We might make a lot of money but, we also spend a lot of money." but i agree with you.
