There are people who don't invest? Do they just keep their retirement savings in cash? I imagine for most people either the government or their employer invests for them.
Most of my family and extended American family doesn’t really invest. I think probably 10% of us “believe” in the stock market. The rest sometimes buy houses (which I encourage because it’s better than nothing), but otherwise are planning on social security, pensions, and lump-sum savings to cover their retirement
Most of my family is farmers or missionaries, and I bet those groups are less likely than most to own stocks.
Also, 'owning stocks' vs 'investing' feels different to me. My brother will go all in on tesla for one year, and then pull out and just sit there until he has another somewhat-random impulse. Likewise, my dad used to put all his money into some index funds for the 30 days leading up to Christmas, because 'the government always makes the stocks go up during the holidays, to keep everybody happy'. They count as 'owning stocks' (at least sometimes), but I don't feel they count as 'investing'.
In short, yes, but my family is very cheap, so it is doable with sacrifice. I think I'm middle class (or maybe upper-middle?) now, but I think I'm the first generation that can say that. And even I rented closets, garages, and spaces behind TV's until about 4 years ago, lol.
I mean no offense, but your understanding of a median seems flawed. The median is the number/point that separates the upper half from the lower half - it is not what 50% has.
The math does add up. There is no contradiction in your parent’s post.
You didn't answer my second question. Yes the median in my example is $50. Thus it would be accurate to say "50% of people in that sample have $50 (or $51)". But not anything further than that middle point.
Back to the original post:
I'm assuming that "three months of expenses" would be roughly $6,000.
The parent post had the median at $500.
1. Given the sheer number of adult Americans (hundreds of millions of observed data points), wouldn't you say it's quite likely that the two mid-points are very close to each other (eg $499.97 and $500.02)? But definitely not (-$5,500) in debt for one mid-point individual vs $6,000 in savings for the next individual (which comes out to $500 in median and "top half has $6k")?
2. In the first scenario (almost continuous curve at the midway point), how likely do you think it is that somewhere right after that $500 mid-point, there is a huge discontinuous jump to $6,000 to accomodate the idea that the rough top half of observed savers has "3 months of expenses" saved?
3. Is there any other scenario I'm not foreseeing, that can reconcile: "the median is $500" with "the top 50% have $6,000+ in savings"?
Incredible HN post. I'm hoping it's because you are from a country where people are generally well taken care of.
Yes, there are people who don't invest. Where do they keep their retirement savings? 40-50% of Americans, at least, simply have no retirement savings! Most people in America aren't earning enough to put away a meaningful amount for retirement. It's going to be grim as boomers and millennials hit retirement age and have to keep working.
> More than half of Americans are net debtors, with a negative net worth.
Median household net worth is around $193k, not negative. Maybe this is true on an individual basis because there a bunch of, say, young debtors and elderly parents who have transferred their positive assets living in households with working adults with more positive wealth than the youngsters and elders combined have net debt, but...
Your comments make me think you've never seen hardships in your life that weren't self-afflicted.
Life can be cruel even if you've made great plans and took all the precautions you could think of. Illnesses, accidents, the lack of a social net because your country was set up that way, crime, the list goes on.
Illnesses and accidents are exactly the things you need savings for, and aren't really relevant here because they don't prevent you from saving until and after they happen. The issue appears to be that 50% of Americans live paycheck-to-paycheck and have no savings? I can't imagine how this could be anything other than them just spending money on shit they don't need.
And yes, I am assuming you live in a developed country. I have Ukranian citizenship and right now the Ukrainian government is abducting men who are over 24 years old and sends them to death. If you live in a country like that, true, you shouldn't worry about investing because you don't even have basic human rights.
I.... they are dealing with systemic poverty. Being poor is expensive. They absolutely know they need to save, but if the choice is "starve to death today but save for retirement OR don't die, but don't save for retirement" most people are going to choose the latter.
McDonald’s will not let you work 40 hours a week, or any consistent schedule at all. You will show up when they tell you to and that’s that. Same with grocery stores or most retail jobs.
Also you’re neglecting the cost of transportation (almost certainly a car, with gas and insurance), rent, and medical expenses.
Median rent value in Seattle is $2300/month if you are looking for a one bedroom, a little cheaper if you are looking at a studio. Minimum wage here is $21/hr. The first quartile for rent is $1600.
Assuming you work full time, you are making $3360 a month, less taxes.
That means that even if you get the bottom 25% of rents, over half your take home pay goes to rent. Then we need health care, food, taxes, transportation, clothing, etc.
I rent a room. But to be fair when I first came to Canada and was told by a local "of course you won't get to have a whole apartment all to yourself" my mind was blown away.