Be Fearless, Be Daring… Start Saving

Start Saving - Wela Don’t fail.

No it’s not a matter of don’t fail at life or don’t fail that test, in this instance, it means don’t fail yourself.

For all of us, we have an internal motivator that helps push us to be better people and hopefully succeed in whatever facet we may desire.

Some of us are just plain scared of failure, so we change course and try something we are more comfortable with.

As cheesy as it may be, I have to pull a couple of Michael Jordan quotes to help drive home this point. Michael Jordan once said, “He was never afraid of failure.” This is really basic and intuitive, great.

But what he also said was, “I can accept failure, everyone fails at something. But I can’t accept not trying.”

Personally, I think that the last quote is really what keeps people from truly succeeding. It seems that it is harder to get people to try, rather than not to fail. Because trying and failing once, spooks people from putting in the same amount of effort the second time.

And so I believe that a main reason people fail at saving is due to not trying, not understanding and lack of motivation. And hopefully, by continuing to touch on this topic, people will spend less time wondering how to save and more time actually saving.

We are all unique, so why do we like to compare

We first launched the yourwela.com site back in February via a pre-beta version. The only aspect of the site that we had at the time was a compare tool. We asked people to check out “how they stack up.”

(And by the way, the current version of yourwela.com is in the process of being completely overhauled in an incredible way. Keep an eye out for our new version by year-end.)

Back to the point—many people were pushed away from this aspect of seeing “how they stack up.” Some thought it was unnecessary and others were just afraid of the possible truth that they haven’t saved as much as their peers.

Then as people started using the tool, they began to see numbers that were higher than they had believed. And this made them extremely worried. We continuously got the question of “why are your averages higher than census averages or worldwide averages?”

The reason was because we wanted our users to create the database. And we wanted to find statistics that were relevant to people who actually had a desire to understand whether their savings habits are working or not.

By creating a user built database (every new user adds to the database and changes the averages), we are now able to compare people to like individuals. Individuals who are similar in nature. People who are truly interested in how people like them are saving. People who are truly interested in saving.

And we wanted to create an avenue for motivation. People continuously say that we should save this or save that. But this doesn’t work. Every individual needs a different form of motivation to create action. Sometimes just being told does actually work, but other times it doesn’t. The compare tool is just another form of pushing the same point: Start saving.

And if you look at the numbers and are depressed, get over it. Start trying to do more because by not trying, you have already failed yourself.

So… How do you stack up?

If you are scared to see, then skip to the next section, but I don’t recommend it. If you have an inch of competitive spirit, I’d like to believe you want to be above these medians saving numbers.

Of all the females that have used the tool, the median total savings for females has been $50,000. Personally, I believe this number is likely to change much more drastically over time as women are becoming much more ingrained in the workplace, along with women’s incomes rising sharply.

Males have a median savings of $160,000. But this accounts for many of our older individuals who have utilized the compare tool. Drilling down into just 20 and 30 year olds could be more relevant for those trying to get motivated to START saving.

The median savings for 20 year olds (both male and female) is nearly $37,000, while that of 30 year olds is closer to $100,000. What we have to realize is that these savings levels include the entire age range. So, a 31 year old isn’t likely to have $100,000 saved, but this would be a good goal to get to by 39.

Want to set goals? Here are some actionable ones to start with today

We have talked about setting goals and taking bite size chunks to accomplishing larger goals. And, this should be no different.

For those looking for a starting point to saving, make a goal to get to $10,000 or more in savings within your 20s. If we are able to do this, then we will be ahead of 30% of our peers. Within our data set 30% of the respondents have less than $10,000 saved within their 20s.

Ok. Great, we have accomplished that goal. Goal number two is to have $25,000 saved by our early 30s. This will put us ahead of 29% of the 30-year-old respondents who have less than that saved.

Check. Goal number three is to exceed the median savings of 30 year olds ($100,000) by the time of our “over the hill” birthday.

Perfect. Now we have had about 20 years of saving, work and real world living experience. It’s time to grasp a better understanding of our expenses and start looking a bit longer term.

Yeah, I’m talking retirement (don’t sigh and stop reading… I have good stuff for you)

Once you reach that “over the hill” birthday and have accomplished our first three goals, it’s time to identify how much we want to be able to spend each month when not working.

Think about what you are spending every month today and use this as a starting point. Say that is $4,000 per month. Let’s make our next immediate goal the ability to get the first $1,000 of that saved up.

Some of you may be thinking I have lost my mind and just confused the heck out of you. Why do I say “get the first $1,000 of that saved up?” Because it’s our belief that for every $250,000 you have saved, you will be able to generate about $1,000/month in income from those investments.

We look at income from the standpoint of dividends (which stocks of companies like Coke pay), interest (from bonds, like what the government uses to build up its debt) and distributions from other investments (like real estate investment trusts).

So, the next goal is to get $250,000 saved up and then the next goal is for another $250,000 saved and so on until you get enough $250,000s saved up in investable assets to generate your desired spending when you stop working.

Determined or scared… which are you?

Saving is a daunting task and we will likely fail to meet some of the goals we set out, but is that going to stop you from trying?

What we have to realize is that understanding how we compare to others is a starting point to creating motivation and a desire to TRY and save.

We have to be cognizant that the only failure in trying to save is not trying (just like MJ) said. Because if we fail to meet a particular savings goal (with the exception of not trying), we have likely saved some money, which is better than, many people can say. And that, in and of itself, is an accomplishment.

So, begin by comparing yourself and then start setting realistic goals for your particular situation. If you need help knowing where to save, refer back to my past post.

But don’t let trying get in the way of being happy longer term. And reaping the rewards of great success!

Good luck and keep us posted on how you do.