Nerd Wallet recently did a study on how much cash Americans carry. The highlights:
More than three-quarters of respondents to a recent U.S. Bank survey said they never carry more than $50 in currency with them.
Nearly one-quarter said they keep $10 or less.
Ok, I am waaaaaaaaaay in the minority here.
I usually carry $100 or more on a money clip.
It's probably because of my "just in case" mentality that I do so. Also it's easy to do as my money clip is combined with my credit card holder, so why not?
How about you? How much cash do you usually carry?
CNBC tells us that most Americans live paycheck to paycheck. The highlights:
Seventy-eight percent of full-time workers said they live paycheck to paycheck.
Overall, 71 percent of all U.S. workers said they're now in debt.
While 46 percent said their debt is manageable, 56 percent said they were in over their heads.
Even those making over six figures said they struggle to make ends meet. Nearly 1 in 10 of those making $100,000 or more said they usually or always live paycheck to paycheck, and 59 percent of those in that salary range said they were in the red.
Ugh.
Is anyone surprised?
We talked about these facts years ago. Looks like things haven't changed.
Eight years ago, during the financial crisis, 69% of Americans lived paycheck to paycheck.
Three years ago, nearly half the people were living paycheck to paycheck, so it looked like things were getting better.
Appears that was incorrect.
As for the $100k crowd, we've seen that it's hard to live on $100k, $250k, and even $1 million.
The reason it's hard to live off such high amounts for some people: they simply spend it all.
At this point, nothing surprises me about the poor financial habits of people in this country.
Here's an interesting post from NerdWallet that says only one in ten Americans is at peak financial health.
They determined "financial health" by creating an online survey which "asked more than 2,000 U.S. adults about eight important components of financial health."
They then weighted the questions to produce a financial health score for each person surveyed.
Only 10.5% of respondents received a perfect score. A perfect score was given to everyone who met all of the following:
On one hand, you could say "no wonder only 11% met all the criteria because there are so many parts of it."
On the other hand, these are pretty basic criteria. If you can't meet these, you're probably hurting in one way or the other.
Here's how we stack up on the eight:
Again, pretty basic.
If you wanted to see if someone was REALLY in great shape, I'd add in "saving a large percentage of income each year." Not sure what the percentage would be -- maybe 15%?
Thoughts on any of this?
Well, it's been some time since I've posted on how bad Americans are at managing their money, so let's get to it today.
Here's a piece from Go Banking Rates that lists how much Americans have in savings by state. They begin with this summary:
When it comes to saving money, Americans aren't doing a very good job. In a 2015 survey, GOBankingRates.com found that 62 percent of respondents have less than $1,000 in a savings account. In fact, 28 percent said they have $0 saved.
We recently asked the question again in a survey of more than 7,000 adults to find out how much Americans had in savings accounts in every state. The results aren't very encouraging. In most states, 30 percent or more of residents have no money in their savings accounts. And, more than 60 percent of residents in every state but six have less than $1,000 set aside.
Is anyone surprised? I'm not.
But really? 30% have NO money (maybe they have some but it's just not in a savings account)? And 60% have less than $1,000? Ugh.
They then list the stats by state in no particular order (which is frustrating to look through) -- could they have made it less convenient to read?
Anyway, I scrolled through a ton of states to find Colorado, where I live. The results:
Worse than average. Double ugh.
No one is that much better. Even the "good" states are 25% and 60%, which is not good either.
How hard is it to sock away $1,000? Sure, there are some income levels that can't do this. But that's like 10% to 20% of the population at most, right?
So what does 60+% do when an emergency pops up? How do they handle it? Credit cards? Triple ugh.
People, people, people. Mind the gap. It is your friend. It can save you from TONS of financial problems.
Money Magazine recently had a series of stats on restaurant bills.
Here are a few of the facts that caught my attention and my take on them:
Average monthly restaurant tab per household: $223
We are a bit lower than this ($200 a month) but we've really got it more under control the past few months -- more like 4125 per month.
It's an area we're focusing on and trying to get around $100 a month.
The average household spends 20% of disposable income on eating out.
We are nowhere close to this. For us it's one of our lower-level spending categories.
Rewards cards that offer the most cash back for eating out (then they list several with the highest being 2.5% cash back).
There's a new sheriff in town. The Costco credit card offers 3% cash back on restaurants.
In addition, the Chase freedom card offers 5% now and then as part of its rotating category list.
Menu items with supersize price markups: Soda (800%), pizza (800%), French fries (977%), and chicken noodle soup (1,650%).
I either don't eat/drink most of these (soda, French fries) or don't eat them out (soup). I have to admit, pizza is my weakness. :)
How about you? How do you fare compared to these stats?
Money magazine released the following stats in their April issue. This set is for households making below $100,000 a year:
Now here are the percentages for households making more than $100,000 a year:
And my results:
And some general conclusions about the numbers above:
A few more facts from Money:
Reading these numbers, it's amazing to me that our economy is afloat. With people being in such bad shape, I'm surprised they spend a penny. Then again, maybe it's because they spend, spend, spend that our economy is doing at least "ok."
What's your take on the info above?
Time recently posted that nearly half of Americans live paycheck-to-paycheck. Their summary:
Too many of us are living paycheck to paycheck. The CFED calls these folks “liquid asset poor,” and its report finds that 44% of Americans are living with less than $5,887 in savings for a family of four.
A few thoughts on this:
What's your take? Anyone want to venture a guess how many Americans are living on their most recent paycheck (based on those you know)?
Money Magazine's December issue listed shares of income in the US by quintile. Here's how they broke up:
And here are the income figures for the top 10% in increments of 1%:
If these numbers aren't specific enough for you, you can use the Wall Street Journal's handy "what percent are you?" calculator.
If you've been reading FMF for some time, you probably have a great guess at where I end up. But how about you? What percent are you?
I recently went through all of CNN Money's 100 best money moves so you wouldn't have to (good thing for you too, since there were really only about five worth sharing.) But here's one I found interesting. They call it the best age for money decisions.
Before I tell you what they say, want to guess what age they think is best?
I would have said 40 to 45, but here's their take:
At 40 many people start worrying about waning brainpower. But according to a recent study by Harvard economist David Laibson and others from the Federal Reserve, the age at which you are smartest about your finances is 53.
Wow. 53, huh? Good to know I've still got some upside left at something! Ha!
I should be close to contemplating full or partial retirement by 53, so I hope I'm fairly smart at finances by that age. I want to be sure my hard-earned money will last the rest of my lifetime. ;-)
In the book Smart Is the New Rich: If You Cant Afford It, Put It Down, author Christine Romans list sets of facts (throughout the book) that she calls "Romans' Numeral". Today I'll be sharing a few of these and giving my comments on them. Here goes:
30+ percent - Rate of job growth projected for "wellness" careers, including fitness trainers, dental assistants, aerobics instructors, and skin care experts.
I think it would be cool to be something like a fitness trainer or aerobics instructor -- doing something that keeps you in shape as your job. Then again, my impression is that these people don't make great salaries. Is that a correct assumption?
$68 - Spend $100 at a locally owned shop and $68 directly benefits the community. Spend it at a big box retailer and less, $43, does.
That may be true, but how many people are going to pay what are (usually) higher prices to get a benefit that's intangible to them? In other words, the savings at the big box retailer is money in their pocket while "benefiting the community" doesn't have direct, visible, financial rewards. So which do you think most people would choose?
95 percent - Self-employed Americans who are "completely satisfied" or "mostly satisfied" with their jobs.
This is an interesting contrast to the 61% of working people who wouldn't even pick the same career and the 84% of (supposedly unhappy) people looking for a new job. Guess being your own boss makes people happy. ;-)
40 million - Number of Americans on food stamps, as the stimulus expands the social safety net.
A few thoughts:
1. This is quoted in a book (that was written a year ago), so the number may be different today.
2. That's a lot of hurting people! Makes you think about helping your neighbor.
3. That's a lot of money! Yikes, how can we afford that type of spending?
4. I hope all those 40 million are ones who really deserve the help. Knowing the government, I'd guess that there are a bunch that qualify who shouldn't and a bunch who should qualify but get rejected. (Can you tell that I think the government isn't the best way to get funds to people who need them?)
That's it for this series. I hope you enjoyed looking at these interesting money facts (though I'm guessing some of you will be happy to see it pass.) ;-)
In the book Smart Is the New Rich: If You Cant Afford It, Put It Down, author Christine Romans list sets of facts (throughout the book) that she calls "Romans' Numeral". Today I'll be sharing a few of these and giving my comments on them. Here goes:
11 percent - Boomer parents with the real fear that their adult children will never become financially independent form them.
Anyone know how they discern a "real fear" versus a "non-real fear"? Isn't a fear a fear? Anyway, like most fears, I think this one is over-blown. And by the way, The Millionaire Next Door says that parents giving economic aid to their adult children on a regular basis is a formula for the kids never becoming financially self-sufficient. Cut the kids loose, let them fend for themselves, and they'll learn. (Of course, you can educate them to help them succeed.)
30 percent - Couples who disagree about money once a week are 30 percent more likely to divorce than couples who fight about money less frequently.
My wife and I almost never (maybe one a year at most) ever have a conversation about money that even comes close to being a "fight." The reasons IMO: we're debt free and my wife is a very unselfish person. ;-)
$5,500 - Average family's out-of-pocket costs for support for an elderly or disabled relative.
I'm guessing this is annually. What if your sick parent lives for 10 years? Do you have enough money saved up? Sure makes you think about getting long-term care insurance, doesn't it?
$25 Billion - Unnecessary costs each year because of preventable hospital readmissions.
The whole issue of funding health care is whacked out IMO. We let people smoke, eat what they want until (increasingly) they become obese, neglect exercise, and on and on. Then we expect everyone to pay for it. Ugh! I'm fine with people smoking and eating themselves to death. If they want the "freedom" to do that, then they can go ahead and have a blast. But why not charge them for it? Why do the rest of us have to pay for all sorts of medical conditions that are avoidable?
That's it for today. I'll share some additional Romans' Numerals in an upcoming post.
In the book Smart Is the New Rich: If You Cant Afford It, Put It Down, author Christine Romans list sets of facts (throughout the book) that she calls "Romans' Numeral". Today I'll be sharing a few of these and giving my comments on them. Here goes:
18 percent - The share of Americans expected to meet all of their financial needs in retirement.
Yikes! Who's going to meet the financial needs of the other 82%? Family? For some, maybe, but not many. The test of us? Oh yeah. You didn't know you were saving for your retirement plus those of several other people, did ya? ;-)
6 percent - Kids who learn about money and finance in school.
I'm surprised it's this high. So, where do kids learn to handle money? From one of two places primarily: 1) Their parents (which is a bad place to learn since the average American's finances are in shambles) or 2) On their own -- from the school of hard knocks. This can be a better option, but it can also be much, much worse.
I personally learned in the school of hard knocks until I was fortunate enough to take a free financial class at church (yes, at church.) That, marrying smartly, and reading and applying thoughts from the book The Millionaire Next Door set me on the path to becoming the FMF you know today.
I've thought about contacting my local high school and offering to teach a class on finances. Just not sure how to go about it.
80 percent - Percent of the college graduates of the Class of 2009 who moved home with their parents after graduation.
I'm wondering if this is high because many kids move back for a very short time before their new job starts. For example, I graduated in the middle of May. I accepted a job that started at the end of June. So I "moved back home" for a few weeks before my job started. Does this count in the 80 percent?
69 percent - Parents of Generation Y who tell their kids to choose a profession they love even if it means they won't be able to pay the bills.
Two thoughts:
1) This is bad advice. Do you really want to doom your kids to a poverty lifestyle (if they can't pay the bills, they are earning less than they spend, which means poverty -- do the math.) Better advice: do what you LIKE.
2) Remember parents, these are the kids who may be taking care of you in your old age. Still want to tell them to do what they love even if it means financial chaos?
That's it for today. I'll share some additional Romans' Numerals in an upcoming post.
In the book Smart Is the New Rich: If You Cant Afford It, Put It Down, author Christine Romans list sets of facts (throughout the book) that she calls "Romans' Numeral". Today I'll be sharing a few of these and giving my comments on them. Here goes:
$22,375 - Median student debt for graduates of four-year private university (up 5 percent over the last five years.)
Two thoughts: 1) Not as bad as I thought it would have been -- especially for a private school. 2) It's an amount that's easily serviceable as long as grads match expected pay for their degrees/jobs with the levels of debt they incur.
1 in 5 - Smart students who arrive to college with AP credits equal to one semester.
Big, big way to save on college costs. Just think, if college is eight semesters (four years at two semesters per year), getting out of one semester saves 12.5%. If the total cost of college is $50,000 (tuition, room, board, books, etc.), 12.5% equals $6,250. If the cost is $75,000, savings are $9,375. Not bad at all, huh?
$24 billion - Amount in overdraft fees collected from consumers in 2008.
Really? Really? I consider this what Dave Ramsey would call a "stupid tax" -- something that's completely avoidable (should be completely avoided) with just a BIT of financial education. Ugh, it's painful to look at that number...
712 - Median FICO credit score, mostly steady over four years.
I would have thought that the median was higher. Last time I checked, our score was 799 and for some reason I thought 730 was average. BTW, do all of you know your FICO scores?
That's it for today. I'll share some additional Romans' Numerals in an upcoming post.
In the book Smart Is the New Rich: If You Cant Afford It, Put It Down, author Christine Romans list sets of facts (throughout the book) that she calls "Romans' Numeral". Today I'll be sharing a few of these and giving my comments on them. Here goes:
$111,000 - Cost of the average high-end kitchen renovation -- twice the median household income.
Really? $111k for a new kitchen? That's more than half the value of my house!!! Maybe because it's "high-end" the cost is so high, but still. Would an investment like this ever pay out? And how much cooking do you want to do anyway? ;-)
71 percent - Americans who say they bought only what they needed in 2009, nothing more.
I don't buy this for one second. Oh, I believe that 71% of people SAID they only bought what they needed, I just don't believe that's actually what they did. Why? Because the US economy would have totally collapsed (not a recession, but total collapse) if this is all that many people bought. And remember, what you NEED is usually a small subset of what you spend. Unless people have an expanded view of what they "need" (versus want or desire.)
45 percent - Only 45% are satisfied on the job, the lowest since the Conference Board began recording numbers in 1987.
This could explain why 84% of people are looking for new jobs. Personally, I LOVE my job, but I realize that's not common. Come to think about it, I've only been satisfied with about half my jobs throughout my career, so I guess 45% does make sense.
8 out of 10 - Number of companies that offer "alternative work arrangements" like flextime, work-from-home, summer hours, and so on.
Wow, I never realized this had become the norm. Or maybe there's a difference between offering it to some and offering it to all. For instance, I've worked in places where a few employees had the chance to work from home, but most did not. So perhaps my companies could have answered "yes" that they offered alternative work arrangements, but they didn't really (to the vast majority of people). How many of you have an option like flextime, work-from-home, etc.?
That's it for today. I'll share some additional Romans' Numerals in an upcoming post.
The Digerati Life has an infographic that details the finances of the Average American family. The highlights:
Ugh! It's worse than even I thought!!!!
And...it's not too difficult to be "above average" financially. Americans sure are setting the bar low.
A few of the especially horrific findings:
Then again, a couple things are better than I would have guessed:
What's your take on this information? Better or worse than you expected?
This MSNBC article talks about how the recession has widened the income gab between the highest earners and the lowest ones. But what I'd like to focus on is the various facts they share in the piece including:
Income at the top 5 percent of households — those making $180,000 or more — was 3.58 times the median income, the highest since 2006.
The wealthiest 10 percent of Americans — those making more than $138,000 each year — earned 11.4 times the roughly $12,000 made by those living near or below the poverty line in 2008, according to newly released census figures.
Median income fell last year from $52,163 to $50,303, wiping out a decade's worth of gains to hit the lowest level since 1997.
Use of food stamps jumped 13 percent last year to nearly 9.8 million U.S. households, led by Louisiana, Maine and Kentucky.
Pharr, Texas, and Flint, Mich., each had more than a third of its residents on food stamps, at 38.5 percent and 35.4 percent, respectively.
Plano, Texas, a Dallas suburb, had the highest median income among larger cities, earning $85,003. Cleveland ranked at the bottom, at $26,731.
A few thoughts here:
$180k gets you into the top 5% of earners and $138k gets you into the top 10%. Hmmm. Go to a top MBA school and you're already near the 10% level (even if you go to a "good" MBA school, you'll still do well). Not that this is mentioned in the article, but I thought it was interesting since my MBA has certainly worked out for me.
Why do these pieces keep equating "wealth" to income versus net worth? Don't these writers know what they are taking about?
Median income of $50k seems "right on" to me. I thought it used to be $40k not that long ago, but apparently, I'm wrong. Anyway, my guess is that the readers of this blog are either just starting out their careers (and thus below $50k) or well past the $50k mark (on average, of course).
13% of people on food stamps -- almost 10 million people. Two thoughts: 1) Wow. That's a lot of needy people. 2) Those are our taxes at work. Not sure how food stamps work but the concept of helping people to eat is a good one IMO. But I'm sure the government somehow messes it up in the administration/rules/paperwork associated with the program.
Yikes!!! Flint is only a couple hours from my city. I knew things were bad there, but not that bad.
I've been to Plano, nice place. I've been to Cleveland too (some family and friends live there). Not as nice, but still ok IMO (and this is coming from someone who used to live in Pittsburgh -- people there are not known to be Cleveland lovers.) :-) Strange that there's such a big difference in the two. I'm guessing the main difference is that "Cleveland" above is the city limits of Cleveland and the "Cleveland" I know/visit is in the suburbs.
Then there's this comment that I simply can't leave alone:
"No one should be surprised at the increased disparity," said Richard Freeman, an economist at Harvard University. "Unemployment hurts normal workers who do not have the golden parachutes the folks at the top have."
A few thoughts here:
1. Does everyone at Harvard hate people who earn a decent salary? Seems like I see a lot of comments along this line from them. Strange, since that university is known to turn out top-earners.
2. Other than the very highest of the high (those making millions of dollars a year), how common are "golden parachutes" for the "folks at the top"? By definition, people that make $138k are at the top (at least the top 10%). I know a ton of these people, many of which have been laid off or downsized. NONE of them got a golden parachute (the way I understand "golden".) Some did get a few months severance, but nothing I would consider "golden" like the windfalls the very high earners get when they leave or are forced out. So maybe the Harvard guy means the top get "some severance" and not the "golden parachutes" he seems to think they all receive?
3. I'm no economist (and as such, what I'm about to say is probably dead wrong) but doesn't unemployment hurt normal workers more because they tend to 1) make things and are 2) less skilled while higher paid people tend to 1) run things (like companies, departments, etc.) and are 2) more skilled -- which puts the higher paid people in a better position when consumers stop buying as much stuff? Then again, I'm probably spouting nonsense, so someone please straighten me out.
Here's an interesting piece from MSN Money on who actually makes up the "middle class" in various parts of the world. Unfortunately, it's an elusive answer since there's a big difference in how people FEEL and how they actually compare to others when you look at the numbers. And, of course, there are big differences when you compare the US to the rest of the world.
So with that said, let's start at trying to get a general definition of middle class. Here's what MSN Money offers:
The only universally accepted definition of middle class is the oldest: neither rich nor poor.
More than income, the middle class is an expression of where one's occupation, education, wealth and even attitude fit in relation to those of others. Most prefer to identify as at least somewhat typical -- or near the norm -- in all circumstances, and "middle class" has the added benefit of suggesting both opportunity and self-reliance.
Middle class, defined as "the resources to cover all of your needs and some of your wants, plus the ability to save for the future, works for every nation and culture," MSN Money personal-finance columnist Liz Pulliam Weston says.
Ok, so now let's look at the numbers. We'll start with the United States. Here's what makes you middle class in America:
In fact, what researchers will tag as middle class is actually about the middle 60%, from roughly $20,000 to $100,000 a household these days. Worldwide, the U.S. median income (half earn more, half earn less) ranked fourth behind Luxembourg, the Netherlands and Switzerland, according to data from the middle of this decade. In 2008, the U.S. median household income was $50,303.
"Everybody in the U.S. is richer than . . . rich people in most of the rest of the world," notes Banerjee, the MIT professor.
Surveys have found that Americans will identify as middle class all the way up to the top 3% of earners. It's all relative, and they don't feel rich. Probably they feel a little insecure, maybe even unhappy if they can see a neighbor's bigger mansion from their porch.
Three interesting points on this information:
Why do they always use income rankings to determine this stuff? Why not net worth? Isn't that a better measure of who is and isn't wealthy?
As we've said several times here -- the poorest American is wealthy compared to most people in the world.
Ha! Americans are always looking to those who have more and feel poor relatively, aren't they?
Now, for a bit more perspective, let's look at the middle class on a worldwide basis:
The World Bank defines the global middle class as those earning between $10 and $20 a day. Food and rent may cost little, but the cheapest new car still requires $2,500.
Banerjee defines middle-class people as those living on $6 to $10 a day.
"These are people who are in the market. They're not just buying food and the cheapest clothes they can get. They have some choice," Banerjee says. "You could get them to buy something, a nice TV maybe . . . some cheap cosmetics.
So somewhere between $6 and $20 a day in income is global middle class. I guess that's why "middle class" Americans can move to a foreign country and feel like kings.
Not much practical application in this discussion, but every once in awhile I like to take a run through stuff like this for fun.
ESI Money is now offering a free ebook titled Three Steps to Financial Independence. Get your copy here.
I found this interesting, money-related question in a recent issue of Parade magazine:
If all the money in the world were redistributed so that everyone had the same amount, what would it be?
My guess was somewhere in the $100,000 range. The real answer shows how stupid and misinformed I am when it comes to the global supply of money and the number of people on the planet. (Before you read on, do you want to guess the answer yourself?) Here's the correct amount:
The global money supply is about $60 trillion. (Economists call this figure the M3 value; it includes much more than currency.) Say that we take it all—which means that you and Bill Gates would have nothing in the bank—and then distribute it equally among every individual in the world, about 6.8 billion people. Each man, woman, and child would receive about $9000. So, if your household now has less than $9000 per person, you would gain. If you have more, you would lose.
A couple thoughts:
1. This doesn't include all "wealth", just all "money". For instance, this isn't dividing up physical items of value such as real estate, natural resources, etc. (for more on what's included in M3, check out this piece.)
2. $9,000 is not much at all. Yikes! There are certainly a huge number of people in this world that literally have nothing.
What was your guess? Were you closer than I was?
As if we need any more evidence that playing the lottery is a fool's game, check out these odds:
So, are you worried that you'll be injured by a toilet this year? Have you stopped riding your bike because you think you'll die? Or have you stopped using hot tap water because you're afraid it will kill you?
On the positive side, do you plan on accepting an Academy Award this year? Is your best-seller written? Are you planning on beating Obama and McCain?
In other words, there are a whole host of things we aren't afraid of because the chances of them happening are so remote that it's likely they never will happen. And there are things we don't even dream about because the chances of them happening are so remote that it's likely they never will happen. And yet these things we ignore are much, much, much, much more likely to happen than any of us winning the lottery. (ok the president one is "only" about twice as likely, but the others are way more likely than winning the lottery.)
Just some perspective. Food for thought.
Here's a small stat I found at the bottom of a page in Money magazine's August issue:
Average amount Americans planned to spend on summer vacation (according to a Visa study): $1,654.
A few thoughts on this:
1. Since it says "summer vacation" I assume this is not total vacation spending for the year, but it's just for the summer time vacations Americans take.
2. This is way above what we spend on our average summer vacation. In fact, most years we spend $500 or so for the FULL YEAR -- most of it spent on gas driving to see family and friends.
3. That said, every ten years or so we have a "big" vacation (like our trip this year to Disney) and we go way over $500. Still, even with this averaged in, we're still at less than $1,000 a year over the past ten years.
What do you spend on your vacations? Do you just take them in the summer or are there other times you travel?
I recently ran into an old magazine article that lists several facts on how people handle money, quoting Dave Ramsey's The Total Money Makeover as the source. I found many of these interesting and wanted to share them with you:
Here are my thoughts on these:
1. Not surprising. I thought back personally and I can't remember when the last time I was that I bought something I couldn't afford. Something I paid too much for or something I didn't need -- of course, those would be easy to name. But not something I couldn't afford.
2. College loan debt is ok by me as long as it's not so massive. Why? Because it will more than pay off in extra income in the long run. That said, credit card debt is not acceptable to me for anyone in any stage of life.
3. Yikes! So almost half the population is one month's salary away from financial meltdown?
4. All the more reason to go for a cash rewards card.
5. I save for a car and pay cash -- haven't had a car payment in 15 years.
6. See #4. I use my two credit cards quite regularly (most of the use is on my Blue Cash from American Express card), but pay them both off every month.
7. Ha! Yes, I think people are deluded when it comes to their expectations of retirement.
8. Wow, that's a shocker. I've never seen anything like this quoted before. Who would have guessed?
Overall, I thought this was some really compelling information -- much of it almost unbelievable even for a jaded guy like me.
Sports Illustrated recently released its list of 50 top-earning American athletes and let's just say, they are all doing pretty well financially. here are the top 10 and the amounts they earned on and off (endorsements) the field:
1. Tiger Woods - $112 million
2. Oscar De La Hoya - $55 million
3. Phil Mickelson - $51 million
4. Shaquille O'Neal - $35 million
5. Kobe Bryant - $34 million
6. LeBron James - $31 million
7. Kevin Garnett - $29 million
8. Derek Jeter - $29 million
9. Alex Rodriguez - $28 million
10. Dale Earnhardt Jr. - $27 million
Wow.
A few interesting statistics from the overall list:
1. Endorsements are bigger than salaries. Of the top 10, 57% of the earnings are from endorsements driven by Tiger Woods (89%), Phil Mickelson (92%), LeBron James (81%) and Dale Earnhardt Jr. (74%).
2. The only woman in the top 50 is Michelle Wie. She's #22 with $20.2 million.
3. Super Bowl MVP Peyton Manning is the NFL's top earner on and off the field (#12, $23 million.)
4. Seems like it's better to be a top athlete where you're in an individual sport (golf) or one with a small number of players (basketball.) It means more money to keep for yourself versus, say, football where the money needs to be divided among many more players. Popularity of the sport helps a bit too, of course, but in the end, personality makes the biggest difference. If top athletes have a winning personality and image that can help sell products, they'll clean up royally.
The top earning non-American athletes aren't doing poorly either. Here are the top five:
1. Fernando Alonso - $35 million
2. Ronaldinho - $33 million
3. Roger Federer - $31 million
4. Valentino Rossi - $30 million
5. David Beckham - $30 million
Not bad for playing a sport and having fun, huh?
Here's one for the "yikes!" file from Money magazine:
49% of respondents in a recent survey conducted by Quicken said they had no emergency fund stashed away.
Holy cow! Are you kidding?
Having an emergency fund is one of the basic building blocks of good money management. If almost half of the population is missing it on something so simple and basic, imagine how many are in trouble on the more complicated issues related to financial planning!
For more thoughts on getting/having an emergency fund, see these links:
Here are some thoughts from the book The Net Worth Workout: A Powerful Program for a Lifetime of Financial Fitness (see my rating for details) on the poor financial health of the average American:
The average U.S. citizen works 44 years, then retires with a $46,000 net worth, excluding home equity. That represents just $1,000 for every year worked -- $83 for every month! Meanwhile, if such a person had invested $1,000 a year in the S&P 500 for fotry-four years, at age sixty-five, he would have $652,640! Ask yourself, What happened to that $600,000-plus of "missing" net worth?
I'll tell you what happened: new cars every few years, a house they can't afford, big screen TVs, vacations, present-filled Christmases, full cable packages, memberships to various clubs, etc. In short, people spend a lot of money on "wants" that many view as "needs."
Now I'm not saying that people shouldn't enjoy life, but they also have to make choices. Yet many people simply don't limit their choices (much) -- they see something they want, and they get it. Can't afford it? No problem, just borrow for it.
Becoming wealthy isn't that hard. In fact, it's rather easy. Want some examples? Check out these posts:
Here's a stat from Business Week about older Americans and online banking:
21% of Americans 55 or older are banking online, down from 26% in 2004. Many feared their data might be sold by the bank or stolen.
Reasonable fears, as I've covered before:
Here's an interesting money stat from Business Week:
Over the past five years, employers have hiked workers' annual contributions for family health coverage by 68%.
Yikes! I knew it had been painful, but seeing it in print somehow makes it even worse!
Here are a couple past posts you may want to read to help keep your health care costs as low as possible: