hahah owned! I want the 2006 version of the new navigator!! when I was stepping up I was saving over 97% Using only 3-5% as living expenses.
The cited statistics don't separate inflows from appreciation. As a rough measure of the latter, the S&P 500 increased about 10% from Q3 2004 to Q3 2005. This is about the same as the reported change in financial assets.
The author highlighted a $3.3 trillion jump in financial assets, then used that number to conclude Americans are thrifty savers. The statistics are not sufficiently detailed to support his conclusion. In fact, $3.3 trillion equals over 1/3 of disposable personal income, so it's probably a safe bet the increase results from much more than personal savings. The change is mostly due to higher pension fund reserves ($0.9 trillion), equity in non-corporate business ($0.9 trillion) and mutual fund shares ($0.6 trillion).
They show the accumulation of wealth, which reflects both appreciation and personal savings. Almost certainly, however, they do not reflect savings only.
Agreed. And it casts doubt on this so called negative savings rate. The numbers being released are flawed like CPI lack of consideration for housing.
This topic reminds me of wisdom offered by a friend: Statistics are like a bikini. What they reveal is interesting; what they hide is vital.
I've posted on this before. The released figure is nothing more than the arithmetic difference between spending and wages for a given month.