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reinvested interest and dividends should be included too since you are saving that income.
in one case you may be spending your check for bills so you can save your passive income, otherwise you could spend the passive income for bills instead of re-investing and your saving rate would be much higher.
I don't think it's very meaningful to give a percentage figure unless we also give what our net income is, and I realize many folks may not want to do that our of a sense of privacy.
A person with a net income of, say, $5,000 a month is going to have a much easier time saving a substantial percentage of it than someone who is bringing in half that.
Other factors also enter in. For example, I am retired and have a paid-off house, which helps my cash flow. I am not raising kids and have none in college, and none I am supporting. I am on Medicare, so I spend almost nothing on health care. I save between 40 and 45%, which is easy for me to do without resorting to extremes of frugality, although I am reasonably frugal. So Ican claim no particular virtue in that.
I have the sneaking suspicion that this thread may be a bragging contest.
reinvested interest and dividends should be included too since you are saving that income.
in one case you may be spending your check for bills so you can save your passive income, otherwise you could spend the passive income for bills instead of re-investing and your saving rate would be much higher.
follow that?
I prefer to see that as a form of investment return. at least until the person is living off of his investments.
I don't think it's very meaningful to give a percentage figure unless we also give what our net income is, and I realize many folks may not want to do that our of a sense of privacy.
A person with a net income of, say, $5,000 a month is going to have a much easier time saving a substantial percentage of it than someone who is bringing in half that.
Other factors also enter in. For example, I am retired and have a paid-off house, which helps my cash flow. I am not raising kids and have none in college, and none I am supporting. I am on Medicare, so I spend almost nothing on health care. I save between 40 and 45%, which is easy for me to do without resorting to extremes of frugality, although I am reasonably frugal. So Ican claim no particular virtue in that.
I have the sneaking suspicion that this thread may be a bragging contest.
I understand and appreciate your point. still, I think it has meaning to look at what % of someone's money that they could spend and what they are actually spending.
you mean bragging about income since you must earn a high income to save such a high % or bragging that you save a high %? I guess it is when it comes to the latter in a way. a solid investment return may be bragging in the investing forum, in the frugal forum a great savings rate may be bragging.
I prefer to see that as a form of investment return. at least until the person is living off of his investments.
i am not so sure you could break it out cleanly and easily . as an example a good portion of our income and the resultant savings comes from our investment properties as rental income as well as our paychecks and other sources.
being an investor for decades has developed quite a substantial passive income component.
the total all together represents our income and pays our bills and whats not spent we save.
if you were figuring rental income as income then you would really need to figure all passive income that is not reinvested as income as it would be no different than rental income. it would just be a different investment vehicle.
i think you were just thinking in terms of a pay check and for many that would be the whole story but there are many others with all sorts of income coming in both earned and passive that makes this a very vague question.
passive income can be just as big a factor as earned income .
i think you really need to look at all passive income and earned income together, then what is left over as being saved.
if not then what you are really just looking at is savings rate from your pay check which is only a piece of the puzzle as to what someone is saving.,
at this stage we are ready to retire but until we do we get 2 paychecks from working , my wife already collects a 20k pension , we get 25k from rental income , my wife gets a 7k social security check but is still working, and we get maybe 60k in interest , dividend income and capital gains spun off from fund investments. that makes up our yearly income..
whatever is left after paying bills gets saved. so which figure should we base the percentage on????????????
i could figure just the 22k or so from my pay check which goes into my 401k as the answer to your question . but the reality is 50% or more of all our total income ends up being saved most years . big difference in answers.
one answer has us living close to our maximum income and saving little , the other answer i could give has us living at only 1/2 our income level and saving the rest..
i am not sure if the question phrased as is really gets the info extracted that you were curious about. to many variables other than paycheck and to many components that make up someones income.
the gov't uses a term called savings rate which is only new invested money and counts no capital gains but they do look at all NEW money invested or saved regardless if passive or earned
Last edited by mathjak107; 01-22-2014 at 04:02 AM..
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