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Not Nealry Enough – Much More Needed
This infographic from BillShrink.com displays the average savings accounts of typical Americans.
The Averages
It begins by showng the median household income, minus taxes, plus tax returns, which equals about $40,500 per year. The average American spends 94% of their disposable income, leading only $2,400 to be saved each year by this “average American,” but only 41% actually put that money into savings. That said, 43% of Americans spend more than they earn, leaving them in debt. When compared to the rest of the world, Americans save far less, with China saving 30% of their income on average.
Reasons for Not Saving
After displaying this staggering data, the infographic goes into a list of reasons by Americans can’t save money. These reasons include the following:
- Lifestyle maintenace
- Instant gratification
- Credit cards don’t feel like real money
- Avoiding the truth about their bank account
- Egotism
- Keeping up with the Jones’, other doctors’, etc.
Assessment
For anyone who has a problem saving, this infographic could be eye opening. If we as Americans could come to terms with the 5 reasons it’s hard to save, we could likely overcome these and start saving more. But, what about medical professionals?
Conclusion
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Filed under: Financial Planning, Funding Basics | Tagged: How Much to Americans [Doctors] Save?, savings rate |
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Not so fast – The Paradox of Thrift
According to Wikipedia: The paradox of thrift (or paradox of saving) is a paradox of economics, popularized by John Maynard Keynes, though it had been stated as early as 1714 in The Fable of the Bees, and similar sentiments date to antiquity.
The paradox states that if everyone tries to save more money during times of recession, then aggregate demand will fall and will in turn lower total savings in the population because of the decrease in consumption and economic growth. The paradox is, narrowly speaking, that total savings may fall even when individual savings attempt to rise, and, broadly speaking, that increase in savings may be harmful to an economy.
Both the narrow and broad claims are paradoxical within the assumption underlying the fallacy of composition, namely that what is true of the parts must be true of the whole. The narrow claim transparently contradicts this assumption, and the broad one does so by implication, because while individual thrift is generally averred to be good for the economy, the paradox of thrift holds that collective thrift may be bad for the economy.
The paradox of thrift is a central component of Keynesian economics, and has formed part of mainstream economics since the late 1940s, though it is criticized on a number of grounds.
The Economist
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The Paradox of Health
What would happen to the US economy if everyone ate better, exercised more, avoided drugs, alcohol, cigarettes and promiscuous sex, and drove safely? Why … Hospitals and medical offices would close, jobs would be lost and the country would be in shambles.
I call this The Paradox of Health. We need vice, fat, lazy and sick Americans.
Revington
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