Americans seem financially unprepared. According to an American Psychological Association survey, 72% of Americans say they’ve felt stressed about money at some point in the last month. Meanwhile, as many as 50% were so stressed out they admitted to not being able to sleep.
Is that you? Hope not, because this is Financial Samurai! If so, please read every single post on my site before spending your next buck.
I also found a Federal Reserve survey monitoring the economic well-being of U.S. households. The survey reports that 46% of adults claim they either could not cover an emergency expense costing $400, or would cover it by selling something or borrowing money.
Hmm. Did the Federal Reserve only survey the most impoverished communities in America? Surely many of you can go to the bank and withdraw $400 to pay to fix a leaky window, a burst pipe, or a tow truck. If not, there's always the Bank of Mom and Dad.
The Fed says the 5,600 survey respondents were selected at random. But I'm highly doubtful given the median household income is roughly $68,000 or $5,666 a month.
Alleviating Consumer Anxiety About Money
Despite a bull market in stocks and real estate, there does seem to be some growing consumer anxiety around having enough control over their personal finances. As a result, Capital One, one of my supporters, is leading an effort to redesign the banking experience and inspire a new era of confidence when it comes to people’s relationship with their money. If you are feeling financially unprepared, Capital One can help you.
They've launched a Banking Reimagined 10-city Tour and recently stopped by San Francisco. Each participant visiting the tour will be invited to go through an interactive session that will help uncover the financial behaviors that best match their value system. The experience includes:
- Advanced Interactive Touchscreens – 9 Multi-Taction Touchscreens spanning 22’ wide and 5’ tall that allow up to three people to interactively scroll through values and goals, giving you an understanding of how your outlook shapes the way you view your money.
- HoloLens Augmented Reality – Interact with 3D holographic imagery in real space and time, bringing your financial goals to life.
- Video Selfie Booths – Participants can record a message for their future selves with the knowledge they’ve gained from the experience. I'm going to remind myself to never stop grinding!
Sounds like fun, especially since our torrential downpour of rain will have abated by then! I'll update this post with some pictures of my experience right after I get some Dungeness crab with melted butter.
Finally, in addition to Capital One's Union Square Café, they're also opening up another Capital One Café in Walnut Creek in the East Bay. If you've never been, it's a chill place to grab some food and drink, lounge around, and seek financial help.
They're offering complimentary Money Coaching sessions by appointment. I'm going to go through one and report back my experience in a future post. Anytime something is free and has the potential to help readers achieve financial independence sooner, I'm all over it.
Financial Samurai Reader Demographics
Below is the Financial Samurai reader demographic survey based on over 80 polls I've conducted over the past four years. My #1 goal is to help as many people as possible reach financial freedom sooner, rather than later. I don't want financially unprepared people.
It's interesting to see the numbers compared to nationwide medians and averages. Are people getting wealthier reading personal finance sites? Or do wealthier people have a higher proclivity for reading personal finance sites? I'm sure there's a mixture of both. But one thing I do know is that any of you who've been taking my advice since 2009 should have seen your net worth more than triple since!
Specific Demographic Data
* Age: 76% of you are between the ages of 26 – 45. 11% are under age 26. 13% are over 45.
* Annual Income: 51% of readers make over $100,000. 33% of you make between $100,000 – $200,000 a year. 18% of you make over $200,000 a year, while 17% of you make between $75,000 – $100,000 a year. 3.3% of you make over $500,000 a year, the level which I consider to be the definition of rich.
* Value Of Primary Residence: 39% of you said your apartment or house is worth between $250,000 – $500,000. 28% said your apartment or house is worth between $500,000 – $1,000,000. And 9% of you said your apartment or house is worth more than $1,000,000. Most homeowners have refinanced at least once over the past 10 years to take advantage of record low interest rates.
* Retirement Savings: About 19% of you have saved over $1 million dollars for retirement, excluding the value of your primary residence. Another 18% of you have saved between $500,000 – $1 million dollars. While 38% of you have saved between $100,000 – $500,000.
* Social Class: 67% believe you are part of the Mass Affluent Class followed by 20% who believe you are Middle Class.
* Education: 62% of you went to public university while 29% of you went to private school with grants or scholarships worth at least $4,000 a year. Roughly half of public university attendees got grants or scholarships worth at least $2,000 a year.
* Debt Levels: 52% of you have $0 consumer debt outstanding. While 22% of you have less than $10,000 in consumer debt outstanding. 36% of you have total debt outstanding (mortgages, credit cards, student loans, etc) between $150,000 – $500,000. 15.5% of you have no debt of any kind.
* Net Worth: 35% of you have a net worth of between $300,000 – $1 million. 23% of you have a net worth over $1 million. 80% meticulously track their net worth with today's free tools.
* 401k/IRA Savings: 21% of you have between $100,000 – $200,000 in your 401k or IRA. 25% of you have between $201,000 – $500,000. 17.5% have over $500,000.
* Ideal Income For Happiness: 14% say you need to make $101,000 – $150,000 a year to feel “very happy.” 22% say $151,000 – $250,000. While 52% of you need to make over $250,000 a year to feel very happy.
* Savings Discipline: 15% of you save between 11% – 20% of your after tax income each month. 18% save between 21% – 30%. 28% save between 31% – 50%. While 23% of you save over 50% of your after tax savings.
Are You Financially Unprepared Or Prepared?
Please take a moment to fill out this simple poll regarding whether you can pay for a $400 emergency expense without having to go into debt or sell something. My guess is that only 15% of you will say you can't cover a $400 emergency expense compared to the 46% nationwide average. What percentage do you guess?
Financial Samurai readers hail from all 50 states, all ages, all races, and all incomes. I believe we're as good a representation of Americana as any other survey. Perhaps I'll see some of you at Pier 39 this weekend!
The best way to grow your net worth is to track your net worth. Don't be financially unprepared. I've been using Personal Capital's free financial tools and app to optimize my wealth since 2012. It is the best free money management tool on the web.
Just link up all your financial accounts to measure your cash flow, x-ray your portfolio for excessive fees, calculate your retirement income, and more. There's no rewind button in life. Therefore, you need to do your best to optimize the wealth you have now.
Readers, do you believe that ~46% of Americans will have trouble coming up with a $400 emergency expense? If so, why do you think this is given the median household income is ~$56,000? How large of an emergency fund do you keep? I've usually got at least three months of living expenses on hand. If I need more liquidity, I'll just sell some public securities. Thank you Capital One for sponsoring this post!