American income and savings

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Website owner:  James Miller

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According to the World Economic Forum household income distribution in the USA is currently as follows:

Under $25K 18.1%

$25K - $49.9K 19.7%

$50K - $74.9K 16.5%

$75K - $99.9K 12.2%

$100K - $149.9K 15.3%

$150K - $199.9K 8.0%

Over $200K 10.3%

See The one chart you need to understand how income is distributed in the US

The official poverty line for a family of four is currently at $26,496. It is my guess that the vast majority of those households that are living below the poverty line are households with only one income, probably usually single people with or without children. (I would guess that some are young single people just out of school and just getting started in the work world. The rest are probably mostly single mothers with children. Most likely usually unmarried Black or Latino women with children. Most are probably welfare types.)

From the above table we compute that 45.8% of US households make more than $75000 per year (12.2 + 15.3 + 8.0 +10.3 = 45.8). I would say that with this kind of income a family should be able to save a great deal of money every year if they tried. But how much do Americans actually save?

According to www.zippia.com

● 63% of Americans live paycheck to paycheck as of September 2022.

● High pay doesn’t always solve the issue – 60% of millennials who make over $100,000 a year live paycheck to paycheck.

● Nearly 75% of American workers are in debt, and 50% of those workers believe they’ll always be in debt.

● 60% of Americans can’t cover the cost of a $1,000 emergency with cash from their savings.

● About 30% of U.S. adults don’t have any emergency savings.

See How Many Americans Live Paycheck To Paycheck? [2023]: Income Insecurity Statistics In The U.S.

What do I think about all this? I find it absolutely astounding that people who make over $100,000 a year would be living paycheck to paycheck. How much sympathy would I have for such people? Absolutely zero sympathy! None at all. It shows real lack of self-discipline, real prodigality.

After my wife and I got married we were able to pay cash for our first house after saving for about five years. We were young and our combined income was not very high. A few years later we started buying more houses and renting them. We were able to do this because we save money. I don’t waste money.

A breakdown of our expenses for last year (2022) showed that we spent $2430 for groceries for the year. A lot of that expense was probably for the ingredients for the two eighteen ounce yogurt / fruit / vegetable smoothies that we have every morning — a kind of luxury that we indulge in. Another reason for the very reasonable figure is no doubt the fact that we buy our groceries at ALDI, a supermarket chain where prices are probably less than half those of mainline supermarkets such as Safeway. The amount we spent on general merchandise for the year was $802.78. Those expenses were essentially all for purchases from Walmart and Dollar Tree. The biggest expense, except for property tax, was medical care at $3270. Our utility bills run a total of around $2000 a year.

See A couple we know

I simply cannot have much sympathy for the financial difficulties of the vast majority of Americans. Even most of the people who are living beneath the poverty level are probably in the situation they are in because of a sexually promiscuous life style.

Are the people who have a big income of $100,000 - $400,000 per year — and spend it all — any happier than my wife and I? I doubt that very much. It is my guess that they are usually far less happy. Material things don’t give happiness. Americans just don’t know the secret to finding happiness.

25 Feb 2023