Saving Rate: How To Calculate It And 3 Ways To Increase It

When trying to grow your wealth; several factors come into play. Investment environment, interest rates, asset selection, risk adjusted returns of various asset classes, taxes, asset location and saving rate.

Saving Rate is the percentage of income a person sets aside every year. The money does not need to be held in cash and can be used to buy income producing assets.

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Why Is Personal Saving Rate Important?

The advantage of high Personal Saving Rate is that your expenses are low relative to income.

Greater Savings To Invest

A high Personal Saving Rate indicates that you are saving a greater percentage of what you earn.

Average Saving Rate In USA

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Just as Saving Rate is important for individuals to track for personal finance; it is also important for governments.

Optimal Saving Rate

To accelerate Financial Freedom Countdown you should ideally shoot for a saving rate of 50%. With a 50% saving rate, you buy one year of freedom for every year you work

How To Increase Saving Rate

There are only 3 levers to increasing saving rate 1. Reduce Taxes 2. Reduce Expenses 3. Increase Income

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