New York, NY (PRWEB) March 1, 2005
According to the 2004 Retirement Confidence Survey, conducted by the Employee Benefit Research Institute and the American Savings Council, Americans overall are doing a poor job of saving. The survey found that 64 percent those in the 25-34 age group, for example, have saved less than $25,000. Just 7 percent have saved between $50,000 and $99,999. And those in other age groups are not doing much better.
In contrast, hear what these hard-core savers in the Armchair Millionaire community say about how they're doing:
"I feel that I am on top of my finances, especially for a single person. I started saving when I was 25. At 33, I own my car, have $32,000 in cash, $23,000 in a CD, $47,000 in my company thrift plan and $41,000 in mutual funds. I don't own a home yet, but I hope to soon." --Lynn
"We are doing better than most people we know who are our ages. I am 32 and my husband is 35. We have no debt and our net worth is $800,000. We have been blessed in that we are both well educated and have been in the right place at the right time with our careers. We definitely live below our means and pay all of our bills with my salary while completely investing my husband's to achieve our goal of early retirement."
At the end of the day, how you are doing compared to others is not especially important. What is important is how you measure up in terms of being on track to achieving your own long-term financial goals. Take my quick quiz to find out if you are.
The Armchair Millionaire's Quiz: Are You Financially on Track?
Have you figured out what you need to retire? Most people haven't, according to the Retirement Confidence Survey. Only about four out of ten have tried to calculate what it would take for a comfortable retirement, and one-third of those who have can't remember what figure they came up with. Without a clear idea of where you want to go, you can't formulate a clear plan to get there.
Do you save a portion of your income regularly? With the current U.S. savings rate below 1 percent, you can sure bet that most people are failing to stash away money on a regular basis. This is very unfortunate, just takes a few percentage points of your income, invested regularly, can grow to a nest egg worth hundreds of thousands of dollars.
Do you pay off your credit cards every month? Americans are awash in consumer debt--more than $790 billion of it, according to the Federal Reserve Board. That means substantial numbers of people carry balances, and pay steep interest rates for the privilege to do so. This is too bad, because paying interest--especially high credit card interest--is like saving in reverse. Unless you free yourself of the credit card trap, you're unlikely to ever get on track to a bright financial future.
Are you protecting what you have? Millions of Americans are without health insurance and many others without adequate homeowners, disability or life insurance. Without sufficient insurance, just one illness or accident can dash your best-laid financial plans.
The Bottom Line: Some Americans have made substantial progress on their savings goals, while others have hardly moved an inch. In the end, what really matters is not how you stack up against everyone else, but whether you're taking the right steps to put own goals within reach.
The Armchair Millionaire Weekly Survey: Do you follow a budget? Log on to http://www.armchairmillionaire.com and let us know.
Lewis Schiff founded the Armchair Millionaire Web site in 1997. His first book, The Armchair Millionaire, was published in 2001. Schiff's newest report, "How to Know When You Are Rich," is now available at http://www.armchairmillionaire.com.
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