Imagine you just arrived at a beautiful estate for a holiday party hosted by your friend Yvette, a neurosurgeon at a nearby hospital.
As you park and walk up towards the house, you spot two gorgeous cars, a Mercedes and a Ferrari, parked on the driveway. You remember these are two of Yvette’s several luxury cars. Yvette warmly greets you at the front door. As you walk in, your eye first catches a crystal chandelier hanging above a large and ornate entry hall. The rest of the house is equally lavish, as is the party you attend. You have a great time and as you leave the party that night you think to yourself - wow, Yvette is really living the good life!
In 2016 and 2017, something truly alarming happened. And almost nobody noticed. According to the Bureau of Economic Analysis, we Americans halved our average savings rate, from an already low 6% to an extremely low 3% of take-home pay (source).
Why does this matter? And what should your savings rate be? Let’s discuss!