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What percentage of your gross/net income should be invested?

post #1 of 5
10/22/11 at 11:44am
Thread Starter 
Invested as in total portfolio - including building up cash reserves, long and short term investments, etc., not just retirement accounts.

I remember reading about someone who saved/invested about a 3rd of the gross, and I can actually see that if you're making decent money and aren't in full spending mode, but that could also probably be tough for those of you who have families.

(P.S. SF style of investing into wine, cloth, shoes, designer furniture and foie gras does not count! devil.gif )
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post #2 of 5
10/22/11 at 11:47am
This depends on how much you make and what your goals are.

Care to provide some framework?
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post #3 of 5
10/23/11 at 6:52am

Like the above poster said, a lot of what you can do will depend upon your income.

 

That said, everyone should save 6-12 months worth of post-tax income as fast as they can.  This gives a little cushion should something happen and you need to find a job.  On top of that, you need something to dip into for emergencies that don't involve unemployment, though worst case, you can use the 6-12mo fund if you replenish it.  In addition, everyone should put aside at least 10% of their income for retirement (ideally) or split between a retirement and rainy day fund.

 

Obviously, those of us who make less and live paycheck to paycheck will find it more difficult.  Those just starting out who aren't used to a full-time income will least miss automatically putting aside 10-15% of their paycheck and will be starting a great habit.  No matter what you make, if you are used to spending everything, it will be tough to get used to limiting your spending and putting that money aside.  Still, the future is coming for all of us, things do happen, eventually, even if we don't plan to retire, our health may not give us a choice.  Put aside as much as you can and be prepared.

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post #4 of 5
10/23/11 at 7:11am
Yeah.. I just started working and I'm pretty much spending my entire salary on living expenses, eating out, buying clothes/shoes, etc.

I also buy stocks from time to time so I am sorta investing at the same time, but it's not an automatic/conscious effort.

I need to start saving up for a safety net in case something happens. But anyway, I think a good %age to invest would be around 10% I'd say? I think the %age should increase as your salary increases.
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post #5 of 5
10/23/11 at 10:39pm
Thread Starter 
Quote:
Originally Posted by CouttsClient View Post

This depends on how much you make and what your goals are.
Care to provide some framework?

Unfortunately goals and income vary for everyone. Maybe I'm wrong for trying to average things out for the normal "professional."
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