What's a lot of savings to have for 40 year old

Odyssey 2005

79k ..

Arcade_Tryer

It depends, not only on the amount, but also on people's preference for saving.

A lot is probably in and around 150-200k.

For people who place little value on savings, that might seem a massive amount. But it's not really.

GirlOutWest

Ye do know, ya can't take it with ya when ya go...........only saying

tomwaterford

Permabear wrote: »

This post had been deleted.

What about all those who lost massively in stock markets 07-08??

Would they been better to keep it in a savings account??

smelly sock

Permabear wrote: »

This post had been deleted.

Surely better to have say 10k safe rather than gamble with it.

Wanderer78

tomwaterford wrote:

What about all those who lost massively in stock markets 07-08??

smelly sock wrote:

Surely better to have say 10k safe rather than gamble with it.

Oh I suspect there's another big bang on the way, I'd be extremely careful where I'd be putting my earnings. By all means invest a bit, but don't have it all in one basket, and be prepared to lose it if investing, it is after all a method of gambling which can go either way

m5ex9oqjawdg2i

Arcade_Tryer wrote: »

It depends, not only on the amount, but also on people's preference for saving.

A lot is probably in and around 150-200k.

For people who place little value on savings, that might seem a massive amount. But it's not really.

That's a colossal amount for saving, if you have assets and don't have any dependents. You want enough to get you through hard times and this amount would last some people 10+ years.

Nody

tomwaterford wrote: »

What about all those who lost massively in stock markets 07-08??

Would they been better to keep it in a savings account??

If they did not panic and sell it all they would have a profit close to 100% today (using a standard index S&P 500 fund such as Vanguard) and that's assuming they bought at the high point before the crash in the first place. Time in market has a tendency to do wonders for you as long as you don't think you are the next Soroz and buy cheap large index funds and leave them be no matter if the market goes up or down (timing the market is the best way to lose money).

Parchment

Everyones life is different - there is no figure that is appropriate or even " a lot", its all relative.

AlanG

4-6 months take home pay would be a minimum. A lot of savings would depend on what you are saving for and if you have a mortgage or not.

Wildcard7

Arcade_Tryer wrote: »

A lot is probably in and around 150-200k.

For people who place little value on savings, that might seem a massive amount. But it's not really.

Actually it's not only "people who place little value on savings" who this seems a massive amount for, but also "people who are not the top 10% earners". I can relate to what you're saying, because before we moved to Ireland we both had jobs that earned close to 100k pa, and it was astonishing how much we managed to save in just 2 years when we stopped buying anything we didn't absolutely need so we could afford the move and a deposit for a house. If you have a lot of disposable income then switching into "saving money mode" can make a huge difference.

But lots of people don't have a lot of disposable income. The average yearly income in Ireland is around 36k. Assuming optimal conditions (two adults, no kids) that's 72k a household. Before taxes. Saving every penny it would still take you a decade to save 200k. Longer if you're planning to buy a house during that time, or you have a big expense that you can't avoid (car blowing up, loss of income as a self employed person, ...). Even longer if you have kids, live alone, or one of you is working half time or for minimum wage.

IMHO savings of over 50% yearly income is not "a lot", but "too much". 150-200k is way above that, unless we're talking about someone who earns 200k in a year.

Patser

Hande hoche! wrote: »

42,000.

The rich man's answer to everything?

Permabear

Permabear wrote: »

This post had been deleted.

It might even ear maked for a house deposit for example which means you don't want tying it up in an investment or taking any risk with it? This could mean leaving it in a saving account for many years as if you aren't sure when you are going to buy you never know when you need the money. Something like having it in a pension as you suggested would be worse again as if I'm correct that money is essentially gone till you retire and you might want your savings for various different things through out your life. Pensions are also risky and if you already pay into one wouldn't you be much better investing in things you can cash in on in more reasonable time frames?

I do understand that investing it will make more money on it but for some having quick access is important.

Permabear

This post has been deleted.

Pac1Man

GirlOutWest wrote: »

Ye do know, ya can't take it with ya when ya go...........only saying

I wish I could share this viewpoint. I always prepare for the absolute worst.

super_furry

About three fiddy.

valoren

tomwaterford wrote: »

What about all those who lost massively in stock markets 07-08??

Would they been better to keep it in a savings account??

Stock market. The only 'shop' in the world where when there is a sale people run screaming out of the shop.

While some will look at the stock market as something akin to a casino, where 4 letter stock symbols are seen as lottery tickets, the reality is that it is nothing more than a facility provided to allow you to own a share of a business.

Here in Ireland we don't have an investors mindset. We don't even have something as basic as an ISA, which they have in the UK.

A whole generation got swept up in the telecom eircom float for example. The majority got burned on that 'sure thing'. I remember our Accounting teacher in secondary giving an impassioned speech about how our parents should invest. Ever since it seems to me that mention of the 'stock market' induces a special kind of fear in people of that generation. People got greedy, invested a lot more that they should have and got burned. The same happened with people whose pensions held bank stocks aka sure things, during the bubble and the subsequent crash. When markets drop, we see headlines such as Black Monday, CRASH! etc which reinforces that fear, the belief that the whole stock market is only a scam and a dangerous place.

Permabear

This post has been deleted.

bmwguy

tomwaterford wrote: »

What about all those who lost massively in stock markets 07-08??

Would they been better to keep it in a savings account??

My pension fund lost about 25% of its value in 2008 it was a scary time but gained it back in 2009/2010 and has grown ever since averaging 6% since inception even taking 2008 into account. Put this in perspective, paying into a pension since I left university and the fund is now made up of 60% what I put into it and 40% from growth.

And of the 60% I put into that, 40% was from tax relief.

So 36% from me, 24% tax relief and 40% from growth

Ush1

Permabear wrote: »

This post had been deleted.

It all depends on the stock of course.

If you invest in a startup that goes pop, moneys gone, no matter how long you wait around.

Didn't it happen to all the investors in Eddie Hobbs property investment group?

Nody

Ush1 wrote: »

It all depends on the stock of course.

If you invest in a startup that goes pop, moneys gone, no matter how long you wait around.

Didn't it happen to all the investors in Eddie Hobbs property investment group?

Which is why the general recommendation is not to invest in stocks but broad, cheap (because many charge well beyond 0.5% what can be bought at 0.1 - 0.2%), index funds instead. That requires the least financial knowledge (compared to any other product outside the savings account), takes the least amount of time for a person to deal with (allocate the monthly savings to the funds; once a year do a rebalance of the funds) and will for the wast majority of people be the best option for long term (5+ years) savings.

But to not derail the thread further I'll leave it at that; an more in depth discussion on cons and pros is probably best left in the Investment forum to avoid completly derailing the OPs question.

myshirt

No such thing as a hearse with a tow bar, so I have no savings, I make it my business to ensure I spend it all. My dying wish is that the last cheque I write bounces.

The_Pretender

Ush1 wrote: »

It all depends on the stock of course.

If you invest in a startup that goes pop, moneys gone, no matter how long you wait around.

Didn't it happen to all the investors in Eddie Hobbs property investment group?

The point is to diversify you investments. If you've invested in the 3 or 4 different ETFs you could own shares in 1500+ different companies. If all of the companies I've invested in go bust I won't be worried about losing my savings, I'll be worried about making it to the bomb shelter in time or dying of radiation poisoning


Also, if you're looking to play around with individual companies, follow the advice of Peter Lynch and Warren Buffet - invest in what you know. I have to laugh at the people who, as soon as they come into some money decide to go out and buy an 'investment property' even though they have no knowledge of the housing market, being a landlord, the liabilities that come with it etc. If you're looking to invest in individual companies, invest in companies you can understand. Don't understand the banking system? Why would you put in AIB, BOI or any of the others. Doesn't make sense. Don't know how to read financial statements? How can you tell if the Company you invested in is doing well then...

Ush1

The_Pretender wrote: »

The point is to diversify you investments. If you've invested in the 3 or 4 different ETFs you could own shares in 1500+ different companies. If all of the companies I've invested in go bust I won't be worried about losing my savings, I'll be worried about making it to the bomb shelter in time or dying of radiation poisoning


Also, if you're looking to play around with individual companies, follow the advice of Peter Lynch and Warren Buffet - invest in what you know. I have to laugh at the people who, as soon as they come into some money decide to go out and buy an 'investment property' even though they have no knowledge of the housing market, being a landlord, the liabilities that come with it etc. If you're looking to invest in individual companies, invest in companies you can understand. Don't understand the banking system? Why would you put in AIB, BOI or any of the others. Doesn't make sense. Don't know how to read financial statements? How can you tell if the Company you invested in is doing well then...

That's exactly my point. Most people aren't bothered doing that kind of work with investing their money, hence why so many will throw it into a bank savings account with a poor ROI.

seamus

Do you mean "what is a lot" as in, "how much is too much?" or "how much do people normally have?".

The answer to the second question is that "nobody really knows". Last year Irish life released a survey which suggested that half of adults had a savings account, with an average of €32k each in it: http://www.independent.ie/business/personal-finance/latest-news/half-of-irish-adults-have-32k-stashed-away-in-savings-34619062.html

However, two years before that another investment company (standard life) released a survey which suggest that three-quarters of adults had a savings account with an average of €20k. each.

So, either half a million savings accounts were closed in the space of two years and the money all given to someone else.

Or, more likely, these surveys were flawed and did something silly like counting the number of savings accounts and assigning one per adult.

Averages are also a very bad metric with money. If you have 100 people - 99 have €1,000 in the account and one person has €5m, then the "average person" in that group has €51,000 on deposit. Which in fact is 51 times larger than the typical reality.

I would imagine the majority of people, if they even have savings, have less than €5k available to them inside of 30 days.

myshirt

myshirt wrote: »

No such thing as a hearse with a tow bar, so I have no savings, I make it my business to ensure I spend it all. My dying wish is that the last cheque I write bounces.

Not to be all serious and stuff but deciding not have an emergency fund through the decades before you realistically end up in a hearse is far too great a risk.

This time last year, my girlfriend and I's only worries were where to go on summer holidays. Now, we're both in a bad way healthwise and we're still only in our twenties.

ytpe2r5bxkn0c1

At 40 I had a mortgage and a growing family but kept saving and paying to a pension fund. By 45 I had approx. 111,000 in savings excl. pension. Mortgage was cleared by 47 and savings grew as a result. Retired at 53. I still save but don't do without in any way.

zuutroy

Is it the case that the best thing to do with any money you having going spare is to pay it off the mortgage?

Stars and Stripes

Not been in debt is savings for a lot/most people over 40. I can honestly say I don't owe a cent to the banks or anyone else at this stage of my life, though I do know what it is like when you do. Due to a serious family issue a number of years ago I was maxed €10,000 up on a credit card, using the card to make repayments on interest etc. But family comes first regardless. Paid off the credit card and tore it up, switched banks (left AIB) and use a debit card since.

H3llR4iser

Permabear wrote: »

This post had been deleted.

Out of curiosity, what would you consider a minimum amount at which it makes sense to look for investment, rather than keep the money in an account?