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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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How To Calculate Saving Rate? To calculate saving rate we need to determine disposable personal income which is Net Income

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

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

Greater Savings To Invest

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The invested assets will either generate cash flow increasing your income. Or will appreciate in value increasing your net worth.

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

Saving Rate varies widely based on economic conditions. When there is a fear of recession, everyone becomes cautious and saves more.

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