5 signs Americans are flat-out broke

[Exterous]

Why am I not surprised the article failed to mention that Americans are continuing to pay down their credit card debt:

The amount of credit-card debt outstanding fell to the lowest levels since 2002. Credit-card balances fell $24 billion to $659 billion from the prior quarter

http://online.wsj.com/news/articles/SB10001424052702304081804579559813544267206

I don't think flat-out broke people pay down credit card balances

Saving money continues to be a losing battle for many Americans. Twenty-six percent of Americans do not have any money placed aside for emergencies, according to a new survey from Bankrate. In fact, 67% have saved less than six months' worth of expenses, and 50% have saved less than three months' expenses. Over the past year, the number of Americans with at least three months' expenses in savings declined from 45% to 40%.

Oh what tricky games we play with words and statistics to impart desired impressions. Lets take a look at the actual surveys:
2011 numbers:
No savings 28%
<3 months 20%
>3 months 42%
Did not answer 10%

2013 numbers
No savings 27%
<3 months 23%
3-5 month: 21%
>5 months: 24%
Did not answer: 6%

2014 numbers:
No savings 26%
<3 months 24%
3-5 months 17%
>5 months 23%
Did not answer 9%

So is it a sign that Americans are flat our broke when fewer and fewer report having no savings? There is some movement out of the 3-5 but that really doesn't seem to be reflected in the <3 category. It seems like most of the 3-5 moved to the 'Did not Answer'

http://www.bankrate.com/finance/consumer-index/financial-security-charts-0613.aspx
http://www.bankrate.com/finance/consumer-index/many-americans-emergency-fund.aspx
http://www.bankrate.com/finance/consumer-index/saving-for-a-rainy-day.aspx

Of course that doesn't even take into effect that 'Millennials' are saving like crazy:

About 70 percent of millennials already have 401(k)s or some other retirement savings plan. And they began saving young -- at a median age of 22 -- the study found. By comparison, baby boomers started saving at the median age of 35.

As a result of their diligence, the median amount millennial households have already saved for retirement in 2014 is $32,000, and their median savings rate is 8 percent of annual household income of about $47,000.

So broke they can only save 8% of their wages I guess...


As for median net wealth the numbers are somewhat cherry picked. Why choose 2003? Why not choose 2009 when the decline from the peak of 2007 stopped? From 2009 to 2013 62.8% of the decline for median households has been recovered. Obviously not complete but I don't think its a sign that Americans are flat out broke when their net wealth has been increasing for the last 4 years

https://www.stlouisfed.org/publications/pub_assets/pdf/itb/2013/In-the-Balance-issue-4.pdf

 

[Exterous]

10) No retirement or very little retirement savings.

Fortunately that seems to be changing - potentially in a big way

 

[schmuckley]

I'm thinking your thinking is flawed.

I bet that chart is counting rental houses as single-family homes.
Oh;It is.

 

[Anubis]

6. We shop at Walmart.

im sorry but where else am I going to get 15 $2 pillows at midnight to stuff in a giant subwoofer box?

TBH I think walmart is the only store in a 50 mile radius that even sells pillows

 

[Mai72]

Fortunately that seems to be changing - potentially in a big way

This is changing? Do you have the article to back it up, or is it just all anecdotal? I've read a few articles that stated most Americans don't have a months worth of savings let alone a nice retirement portfolio.

 

[dmcowen674]

Term limits are in order!

That is one thing it looks like both Republitards and Dummycrats agree on but Congress would never restrict themselves so only a Revolution can effect that change.

 

[Exterous]

This is changing? Do you have the article to back it up, or is it just all anecdotal? I've read a few articles that stated most Americans don't have a months worth of savings let alone a nice retirement portfolio.

Its been a trend over several years now but gets mostly missed in the "OMG The end is coming!" click bait headlines. It even leaves aside the increases from teh stock market alone. More people are saving and those saving are saving more. Fewer 401k loans are being taken out. People are wising up to fees and are starting to see the value of index funds. This is far from 'a nice retirement portfolio' but it is a definite improvement

http://www.bankrate.com/financing/retirement/young-and-planning-to-retire/
http://online.wsj.com/article/PR-CO-20140529-908227.html
http://www.thestreet.com/story/11863357/1/retirement-savings-picture-improves.html
http://www.businessinsider.com/vanguard-retirement-savings-improves-2013-6

One thing to keep in mind is that the articles screaming about how little retirement funds Americans have do a terrible job of reporting on most Defined Benefit plans and IRA distributions. For example: A lot of these articles are written based on a CPS study. However when you compare the CPS study to the IRS data you'll find that:

the CPS does not account for at least 95 percent of IRA distributions and at least half of pension and annuity income.

the CPS captured only $5.6 billion in individual IRA income. Retirees themselves reported $111 billion in IRA income to the Internal Revenue Service. The CPS reported that in 2008, households receiving Social Security benefits collected $222 billion in pensions or annuity income. But federal tax filings for 2008 show that these same households received $457 billion of pension or annuity income.

http://www.iijournals.com/doi/full/10.3905/jor.2014.1.3.014#sthash.seJeIE1S.H9ch8V9q.dpbs

 

[Fenixgoon]

while financing can be advantageous, the average loan is $474/mo? there's gotta be something to skew the crap out of that figure, because i make well above average money and $474/mo was well above what i was willing to pay for a financed vehicle

 

[BoberFett]

while financing can be advantageous, the average loan is $474/mo? there's gotta be something to skew the crap out of that figure, because i make well above average money and $474/mo was well above what i was willing to pay for a financed vehicle

Frankly I wouldn't be surprised about that number at all. Look at how many trucks and SUVs are on the road. The average price of new vehicles is around $30K these days. I make decent money and I hate paying more than a few hundred a month on a vehicle, but most people are bad at money.

 

[crashtech]

Maybe they are including insurance in that figure, which would put it in the ballpark for a $30K vehicle with full coverage.

 

[BoberFett]

Maybe they are including insurance in that figure, which would put it in the ballpark for a $30K vehicle with full coverage.

How do you figure? Just to throw a few numbers out there:

$30K vehicle
$2K down
60 month loan
2% APR
$490/mo.

Unless you're assuming everyone is buying at 0% interest and doing 6 year loans, $490 just for the payment alone probably isn't that uncommon.

 

[crashtech]

You are right, the calculator I used was busted.

 

[runzwithsizorz]

and that's dropping at an alarming rate (per Walmart). Foot traffic down 1.1% year over year and sales down 3% during that same period (for same stores sales and traffic numbers).

Walmart might not admit it outright but they know that if America doesn't get good paying jobs back, even the mighty Walmart will be doomed. That's one reason that WM is at least giving lip service to the bring back manufacturing jobs to America campaign.

Again, people are running out of money.

McDonalds sales down over 3% here in the US last year.

 

[Atreus21]

It would be great. We could offshore those jobs that require no more than a 6 year old to complete and then, the American's could focus on the engineering and science jobs that they would not have had time for otherwise. The US can become the managers and designers for the entire world. Life would be so grand.

Is the solution to tariff imports?

 

[1prophet]

this country is doomed unless something changes soon

http://www.cnbc.com/id/101926802

A lot of folks have empty nest eggs.
A third of people (36 percent) in the U.S. have nothing saved for retirement, a new survey shows.



In fact, 14 percent of people ages 65 and older have no retirement savings; 26 percent of those 50 to 64; 33 percent, 30 to 49; and 69 percent,18 to 29, according to the survey of 1,003 adults, conducted for Bankrate.com, a personal finance website.


Other recent research confirms that many people aren't saving enough for their golden years. About 36 percent of workers have less than $1,000 in savings and investments that could be used for retirement, not counting their primary residence or defined-benefits plans such as traditional pensions, and 60 percent of workers have less than $25,000, according to a survey of 1,000 workers from the non-profit Employee Benefit Research Institute and Greenwald and Associate

I wouldn't be surprised if the have nots (manipulated by the corporations, banksters & wall street crooks) demand the government goes after the savings of those that have in some way, because it's not fair that some should have while others do without:whiste:

 

[s0me0nesmind1]

Since you like using anecdotal evidence all the time when talking about 'your company', I'll throw my anecdotal evidence out there:

I have a LG VX8300 flip phone that's 7.5 years old and up until last year, had the original battery.

My big screen TV went out last year and I spent $350 on a new LCD TV.

Just like your job situation is proof that the US worker isn't in trouble, I'm proof that the US consumer doesn't do what you say they are doing.

/sarcasm

Americans are broke because their jobs were shipped out from under them and their wages were cut over the last decades. Credit was used to fill in for the falling wages for years but even that's run dry. Credit card debt per household has dropped nearly 25% over the last 5 years (partially because the banks have quit giving it out and have recalled others at the same time). Pay people less (McService jobs), you'll get broke people and a stagnant or falling economy...with or without government intervention trying to prop it up.

None of the 5 things listed in the original post apply to you for the VERY reason you described above in your decision making...

*Hint* It's because you aren't retarded with your money.

 

[Exterous]

One thing to keep in mind is that the articles screaming about how little retirement funds Americans have do a terrible job of reporting on most Defined Benefit plans and IRA distributions.

Case in point:

this country is doomed unless something changes soon

http://www.cnbc.com/id/101926802

A lot of folks have empty nest eggs.
A third of people (36 percent) in the U.S. have nothing saved for retirement, a new survey shows.

In fact, 14 percent of people ages 65 and older have no retirement savings; 26 percent of those 50 to 64; 33 percent, 30 to 49; and 69 percent,18 to 29, according to the survey of 1,003 adults, conducted for Bankrate.com, a personal finance website.


Other recent research confirms that many people aren't saving enough for their golden years. About 36 percent of workers have less than $1,000 in savings and investments that could be used for retirement, not counting their primary residence or defined-benefits plans such as traditional pensions, and 60 percent of workers have less than $25,000, according to a survey of 1,000 workers from the non-profit Employee Benefit Research Institute and Greenwald and Associate

I have also noted in the past my skepticism in surveys of small groups of people who are willing to answer questions over the phone from a complete stranger for 20 minutes regarding their finances. (Actual ERBI methodology)

 

[Pr0d1gy]

Case in point:

I have also noted in the past my skepticism in surveys of small groups of people who are willing to answer questions over the phone from a complete stranger for 20 minutes regarding their finances. (Actual ERBI methodology)

You know, turning this into an argument about savings does not dismiss the other 4 points that were made. It might make you feel better that you win this little argument, but it does not deflect from the fact that a great many people are drowning financially and one bad day away from being homeless.

I have refused to buy a house thanks to the artificially inflated market rocketing houses back up to 2007 prices and now they are relaxing credit thereby invalidating my years of hard work in building my credit, to a point where I could get the kind of house I wanted, because this will only push the prices up even more.

It feels like it would be better if I was unemployed when my kids get ready to go to college so they can qualify for the poor kids' grants, rather than me basically paying yet another mortgage off of my ever stagnant wages.

And don't even get me started on cars. Tens of thousands of dollars is an absurdity in and of itself. Most people don't even make that in a year FFS!

Of course, I like how you've completely ignored #5, where it shows the median wealth has dropped by the price of a decent new car ANNUALLY. $30k less is what the middle is making. Do the prices go down? NEVER! In fact, they have been on a rampant upward trajectory for decades now. Things that used to cost $3-4k like a car now cost $40-50k. It's a pathetic scam and people are getting more and more sick of it each day.

Maybe you are doing well, as well as your friends, but the rest of us are barely hanging on. The simple fact is that pay needs to go up, prices should have gone down for the last several decades, and neither of those is happening.

The most basic rules of economics have been proven to be completely false by the market we currently live in, so I guess the question is why are you in here trying to pretend that this is not the case? I mean do you think things are going to get better if this continues?

The actual likelihood is you are going to get robbed like everyone else who has managed to save up some money if this continues, that is if you blatantly disregard the undeniable fact that you are being robbed everyday...albeit pennies at a time.

 

[s0me0nesmind1]

Case in point:



I have also noted in the past my skepticism in surveys of small groups of people who are willing to answer questions over the phone from a complete stranger for 20 minutes regarding their finances. (Actual ERBI methodology)

To be fair - Pensions are only getting fewer and fewer - You can compare it when it comes to the baby boomer generations that had it. Few companies still offer one.

However I still agree, anything and everything should be factored in.

 

[Exterous]

You know, turning this into an argument about savings does not dismiss the other 4 points that were made.

Didn't say that it did but I did address some of those earlier.

I have refused to buy a house thanks to the artificially inflated market rocketing houses back up to 2007 prices and now they are relaxing credit thereby invalidating my years of hard work in building my credit, to a point where I could get the kind of house I wanted, because this will only push the prices up even more.

This actually goes to one other thought I have on some of the 'recovery' metrics. There is a lot of focus on 'home ownership rates' and 'mortgage origination' as signs of a strong economy but I do wonder if people are less interested in buying homes than they used to be despite having the means to do so.

And don't even get me started on cars. Tens of thousands of dollars is an absurdity in and of itself. Most people don't even make that in a year FFS!

I agree esp on a $400+\month payment. I'll continue to buy used and pay less than half of that thank you.

Of course, I like how you've completely ignored #5, where it shows the median wealth has dropped by the price of a decent new car ANNUALLY. $30k less is what the middle is making.

From earlier in this thread:

As for median net wealth the numbers are somewhat cherry picked. Why choose 2003? Why not choose 2009 when the decline from the peak of 2007 stopped? From 2009 to 2013 62.8% of the decline for median households has been recovered. Obviously not complete but I don't think its a sign that Americans are flat out broke when their net wealth has been increasing for the last 4 years

Did you even read the thread before making this reply?

Maybe you are doing well, as well as your friends, but the rest of us are barely hanging on.

You might be barely hanging on but saying 'the rest of us are barely hanging on' isn't supported by any reporting I can see. Bankrate itself (the genesis of this article) shows credit card debt is down, the number of 401k loans are down, savings is up for those at the bottom and that more people, especially young people, are saving for retirement - many to the tune of 8% of their annual salary. People don't pay down credit card debt when they are barely hanging on. People don't save 8% to retirement when they are barely hanging on.

The most basic rules of economics have been proven to be completely false by the market we currently live in, so I guess the question is why are you in here trying to pretend that this is not the case? I mean do you think things are going to get better if this continues?

Where did I say anything one way or the other regarding basic rules of economics? All I did was point out that the article doesn't report on numerous positive signs, appeared to be slightly selective in its data points, and that the retirement savings issue does not appear to be as bad as everyone thinks it is. This is also not the same as the future being all roses, rainbows and unicorns.

 

[BoberFett]

The most basic rules of economics have been proven to be completely false by the market we currently live in, so I guess the question is why are you in here trying to pretend that this is not the case? I mean do you think things are going to get better if this continues?

Actually the basic rules of economics are being proved correct. Increased supply of labor is decreasing the value.

Where is the economic rule that American salaries must be ever growing, so that we can continue to live extravagant lifestyles at the expense of billions worldwide?

"A rising tide lifts all ships" is actually what's incorrect. A rising tide is a local phenomenon. Water will flow to the lowest point, and that's what is happening. World lifestyles will average out eventually, unfortunately for the US that means we're heading down.

 

[Exterous]

To be fair - Pensions are only getting fewer and fewer - You can compare it when it comes to the baby boomer generations that had it. Few companies still offer one.

However I still agree, anything and everything should be factored in.

I certainly agree - however looking at that report a significant chunk of those without retirement savings are in the baby boomer generation. Its also important to consider that this excludes all defined benefit plans. Use your retirement funds to purchase an annuity and the security that goes along with it? Not counted as no annuities would be included. Setup a certain type of trust to deal with your retirement? Not counted.

According to IRS filings that was $500 billion in payouts in one year not being counted by the study.

 

[crashtech]

Actually the basic rules of economics are being proved correct. Increased supply of labor is decreasing the value.

Where is the economic rule that American salaries must be ever growing, so that we can continue to live extravagant lifestyles at the expense of billions worldwide?

"A rising tide lifts all ships" is actually what's incorrect. A rising tide is a local phenomenon. Water will flow to the lowest point, and that's what is happening. World lifestyles will average out eventually, unfortunately for the US that means we're heading down.

That is what I am seeing, hence my earlier quip about raising the Chinese minimum wage. The very best we can hope for in an open global economy is stagnation or a gradual decline in living standards, as the rest of the world catches up.

 

[BoberFett]

That is what I am seeing, hence my earlier quip about raising the Chinese minimum wage. The very best we can hope for in an open global economy is stagnation or a gradual decline in living standards, as the rest of the world catches up.

Raising the Chinese minimum wage can't stop wage and lifestyle arbitrage.

If China becomes expensive, manufacturing will move.

And even if the Chinese manage to keep the jobs, if they're making American wages they will expect to live American lifestyles. This means the competition for goods will increase, and the increased demand will push the price up, lowering the purchasing power of all.

No amount of blaming Republicans or the wealthy will stop this simple truth.

 

[Fern]

$5000 for a computer in the 90's??? I must have hung around a significantly different crowd than you did...
-snip-

Mine was $5k in the early 90's.

Bought it for work and Ill say this - the SOB worked for +10 yrs.

Fern