How are you Calculating Your Savings Rate?

Do you know what your true savings rate is? Jonathan and Brad have an in depth discussion about some of the finer details of saving after Jen poses the question from our facebook group. Additionally, listen in to learn some great tips for crushing your grocery budget in a tastebud-friendly manner, and get some takeaways from episode 158 with Kim from the Frugal Engineers.
we created a calculator for you on the show notes for this episode
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[@susanneowens7616]

I always say TGIM & TGIF so I can get my ChooseFI podcast fix. You guys are crack for the aspiring FI’ers!!!!!

[@ChooseFI]

Best comment ever :) !!!!!

[@6.gazellesleesh639]

so excited I found you on KZbin. So fun to put faces to the voices! I love listening to your podcasts! Thank You for sharing all your wisdom.

[@TylerLloyd]

Excellent video. Sounds like I need to recalculate my savings rate! I haven’t been taking into account what I pay towards health insurance.

[@njm543]

Great video to check out at to get ready to crush 2020!

[@stevesteve9202]

How do you guys account for a traditional pension in the savings calculation? Also do you add in dividend income? Is child support considered an expense or should it be removed from the equation like taxes? Thank you for the clarification.

[@bridgetlove1884]

For savings numerator would you include HSA contribution that will be used for medical purposes? (I plan to save half for future and half for current medical bills). And how about extra principal payments to a car loan? How about saving that are earmarked to be spent in near future like college money for kids? And for income denominator would you add in matching contribution from employer?

[@bridgetlove1884]

@@ancientpaint1 Seems logical. Lots to of things to track though to be able to do this calculation precisely. Thanks.

[@96ej]

Happy Friday!

[@hilarytorres5361]

Thanks for more great content!

[@ChooseFI]

Thanks for watching :)

[@Mitzi73]

Do sinking funds count as savings in this context? I include them in savings.

[@grigorirasputin425]

What are you trying to sink in those funds?

[@shawn4692]

Brad, I love your show it's awesome I am thinking for the next decade I would recommend more of an assumption of 6% returns for most people or lower rather than 8% because the earnings yield on the S&P 500 is near 4% right now and bond yields less than 2%. If you are talking the next 30 years yes 8% returns sound good. I personally think 8% is kind of high considering.

[@susanneowens7616]

Shawn Lynes if you are seriously thinking that you only want to consider 6% growth then you are not putting enough hustle into your investments. Let me back this up; my no-brainer mass mutual account has earned 26% in the last year,. While that might seem like you are crazy to even post this, my returns in 2018 was flat 2-3%. So let’s average, 13ish% return over 2 years. Yes I remember negative years but I was buying 401k investments every 2 weeks at a discount. Besides this type of returns my 3 long term rentals I bought in the middle of 2018 with my checkbookIRA.com 401k is making me $23,000 a year and my tenants are paying off my 3 rentals. Hard money real estate lending even makes a minimum of 8% and mostly 10% for secured loans!!! I conservatively estimate a minimum of 6-8% on investments but let’s be real, look at your investments and see what you have averaged over the last 10 years. I bet I am close to 14%. This does NOT include a huge real estate property purchase which will net us near 50% ROI.

[@shawn4692]

I've studied investing for years since 2007 I'm talking expected returns vs actual returns. Yes the last 10 years have been amazing but expected 10 years from now. This is alot like 1998 in terms of expectations and very low earnings yields on stocks and bonds. I believe in doing estimations based on very long timeframes not the last 10 years. Though I have loved the last 10 years

[@ChooseFI]

Love this conversation! What number you use is ultimately up to your investing style and preferences. But at the end of the day it's the same practices that'll get you towards fi.

[@amafid]

😀

[@RonaldMinter-if2mg]

Okkkao