Pay yourself one hour's worth of income each day

[StormRichards]

Per David Bach as referenced in the article posted today

http://www.cnbc.com/2017/01/05/self-made-millionaire-the-one-proven-easy-way-to-get-rich.html

[Nutria]

Per David Bach as referenced in the article posted today

http://www.cnbc.com/2017/01/05/self-...-get-rich.html

That's nothing but "feed the pig 12.5%".

[rennigade]

Good advice to follow. A lot of us are probably well above that figure but for those who struggle to save its a good start.

[Nutria]

Good advice to follow. A lot of us are probably well above that figure but for those who struggle to save its a good start.

Bah. It's absurdly facile to tell someone who's struggling to save anything to immediately jump in and save 12.5%.

Heck, we just bumped our 401(k) from 6% to 9%...

[StormRichards]

Bah. It's absurdly facile to tell someone who's struggling to save anything to immediately jump in and save 12.5%.

Heck, we just bumped our 401(k) from 6% to 9%...

Perhaps they are struggling because of poor spending habits. It is amazing what you can get by on when you never actually see the money.

[Nutria]

Perhaps they are struggling because of poor spending habits. It is amazing what you can get by on when you never actually see the money.

Few people -- even savers like us who defer 25% of income above and beyond 9% 401(k) -- just want to "get by".

[StormRichards]

Few people -- even savers like us who defer 25% of income above and beyond 9% 401(k) -- just want to "get by".

I suspect no one wants to just get by.

However, I would rather make some sacrifices today and better prepare myself to not have to get by during retirement.

[Nutria]

I suspect no one wants to just get by.

However, I would rather make some sacrifices today and better prepare myself to not have to get by during retirement.

I repeat my statement from four hours ago: "It's absurdly facile to tell someone who's struggling to save anything to immediately jump in and save 12.5%."

[StormRichards]

I repeat my statement from four hours ago: "It's absurdly facile to tell someone who's struggling to save anything to immediately jump in and save 12.5%."

You're right. First you need to tell them to give up the Starbucks every day, and all of the other non necessities that they indulge in.

[rennigade]

I repeat my statement from four hours ago: "It's absurdly facile to tell someone who's struggling to save anything to immediately jump in and save 12.5%."

I dont understand how someone can not save a single penny. What are they indulging in that prevents them from saving anything?

I dont feel like I live an extravagant life yet I save a lot of money and never go without...can buy the things I want and take vacations without issues. If I stopped contributing to 401k and roth ira...I could basically live large. I wouldnt even know what to do with the extra $2k/month. I guess if I ate out every meal and bought coffee every morning I could blow $1k/month.

[Nutria]

I dont understand how someone can not save a single penny. What are they indulging in that prevents them from saving anything?

For us, that was the upsetting part: the money just... disappeared. Once we analyzed our complete spending habits, we were able to trim out the stupid & wasteful stuff. Then exercised some discipline in spending.

We're above the 90% percentile in family income, though. It would be significantly harder for someone in the 25% percentile.

[StormRichards]

We're above the 90% percentile in family income, though. It would be significantly harder for someone in the 25% percentile.

Those people probably aren't living in the same neighborhood as you are, and likely have much lower expenses.

Perhaps more difficult but still should be able to save if they analyze their spending.

[Nutria]

Those people probably aren't living in the same neighborhood as you are, and likely have much lower expenses.

1/3 the expense but 1/5 the income is a non-linear problem.

Perhaps more difficult

but still should be able to save if they analyze their spending.

Some. But certainly not 12.5% anywhere near immediately.

[GoodSteward]

I believe the reason most don't save is because they don't have to. I mean, they have to, to prepare, but they don't have to. You have to pay a min payment on a loan or cc, light bill, etc. You don't have to pay more to debt or save, therefore, most simply don't.

If they realized how much money they are stealing from themselves later in life they would save now. People are too narrow minded, and only worried about today. So, they don't feel like they have to, so they don't. I don't know of anybody who doesn't know they should, but they pass it off with "I'll do it later" mindset.

Of course, you also have some who don't understand why they don't have money. If you are where most households are (60s and under) then it is not as easy as it seems. Not if you have car payments and kids. The process of saving can be so slow it gets discouraging, so they just shrug and ignore it. CC debt follows.

[GoodSteward]

I wish everybody could see this graph to get an understanding of what it means to wait to start saving. It's hypothetical, and a bit dramatic admittedly, but gets the point across.