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i understand what you are saying. i guess for me, those dividends that are re-invested are always going to be re-invested. so i don't really see that is "income" until i retire. for someone who lives off of some or all of that, its income. i understand what im asking leaves certain holes, but i think for how i consider my finances and how most people see theirs; % of paycheck saved is what im looking for.
I agree that % alone is not all that telling. When I had my first job out of school I was pretty darn frugal, but still only managed to save a pretty small percentage of my salary (~4% of $20K net). Now I make more than double that and save much more both as an actual dollar amount and as a percentage, but truth be told, I'm living less frugally now. I'm still generally frugal, but not to the same degree I was when I was saving a mere 4%.
Saving that 4% of my old smaller salary was actually pretty trying at times -- saving 35% of my current larger salary is relatively easy. If I lived like I used to it could probably be 50% or more; but I'm not going to frugal myself out of living.
I agree that % alone is not all that telling. When I had my first job out of school I was pretty darn frugal, but still only managed to save a pretty small percentage of my salary (~4% of $20K net). Now I make more than double that and save much more both as an actual dollar amount and as a percentage, but truth be told, I'm living less frugally now. I'm still generally frugal, but not to the same degree I was when I was saving a mere 4%.
Saving that 4% of my old smaller salary was actually pretty trying at times -- saving 35% of my current larger salary is relatively easy. If I lived like I used to it could probably be 50% or more; but I'm not going to frugal myself out of living.
I agree, it is a lot easier for someone earning a greater income to save more. but its also a lot easier to get someone to say the % they saved than to get them to tell you their income. I also think the number is still meaningful since a lot of people still do spend proportionately more as their income grows and a high savings rate is going to help you amass wealth that much faster.
% net income is not a great gauge, but it is tough to find a good yard stick in order to measure things like that. I don't know a good normalized one. One person's 20% could be anothers entire net income, plus adding in things like dividends or rental income. Also, before tax contributions come out mostly as a percent of gross income...and not net...while things like mortguage come out of net but (like taxes) I would consider it one of the things everyone needs to pay. I wish there was a really good way to give one number though.
I still think a good rule of thumb is save 10% of your income (net or gross, what one can) if people want a static easy idea that can be printed without reguard to a individual personal situations. Simply because financial situations are usually a complex balance of spending, earning, savings, and desires. As soon as some one says to save x% some one comes along and says they only make Y...no way they can save that...as another says they make Z and that is a rediculous saving amount. Can't make anyone happy.
It is very complex as i brought up. We pay our rent with the income from the rental property.
That leaves us with a bigger pay check to save by the op's measure .
I would take that money you pay for your own rent and account for that from your paycheck.
people with big incomes often find themselves in more debt. maybe not as much in the frugal forum, but I think more people than we think will earn more money and just get themselves even deeper in debt (or increase their spending proportionally to their earnings growth). my savings rate has basically increased because ive tried not to increase my spending as my income grew. I wouldn't be saving so much if my income didn't go up. but I could have easily bought a bigger house, a more expensive car, fake boobies for my wife and picked up a cocaine habit and all my savings would be hasta la vista baby.
We'll see after this tax return. This has been an interesting year income AND spending-wise. My income increased more than 30% and my 403b matching % increased with a new job, but my rent and pretty much else went up, one of my graduate class' books were much more than expected, and there were times where my work was so demanding that I spent a lot more money than usual on ready-made food and takeout.
I'll estimate around 15%. Shooting for 27% in the coming year.
Likewise, I haven't calculated my taxes yet. I don't even know what I made last year. Good year investmentwise helped, but I'm young and don't have that much invested. It should be 35-40% as a rough estimate.
60-65%. I could probably do better, but I don't want to live like a miser or look like a beggarman.
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