Back in the early eighties, trick-or-treating was the second holiday of the season (my birthday, Halloween, Thanksgiving, Christmas) and it was glorious.  After a night of hard work knocking on doors and lugging sacks of candy around, we would regroup at home and sort out the loot.  Now anyone who has enjoyed the trick-or-treating bonanza, and especially any parent, knows that you should not eat the entire bag of candy that night.  This is just bad form.  Once you realize you should not eat it all, it must be saved.  You can’t throw it out, after all.  The freezer, a corner of a dresser drawer, a jar on a desk, all decent options for saving the Halloween loot with their own limits on access and control over the bounty.  If you had (or still have) a good spot to save your candy at Halloween, please put it in the comments below.  This is serious business.

Like my Halloween adventures years ago, most of us have learned that we should not spend everything we make.  Following the same analogy, eating the entire bag of candy in one night is like spending the entire paycheck for the month.  You may feel good right now, but tomorrow you’ll be sick.  “Tomorrow” in the case of finances is typically years in the future, but the result is the same.  The bottom line is we need to save.  And recent studies* have shown that we need to save A LOT more than we have been.

The average savings rate is currently around 5% of disposable (after tax) income.  That’s the average rate, which means there are a good number of folks who are saving nothing.  In fact, over half of American workers currently carry $10,000 or less in their retirement savings accounts.  These savings numbers typically include all “qualified” plans recognized by the government and, as I’ve mentioned before, there is another option.  Even though I’m not a proponent of the 401(k), the savings rate is still much lower than it needs to be.

The scary thing is that we seem to already know this*.  As a group, Americans know they should be saving more, but aren’t for one reason or another.  On average, the group surveyed felt they should be saving nearly 25% of their disposable income, rather than the 5% currently being saved.

This is not a call for forced retirement savings managed by Uncle Sam, or any other sort of political suggestion.  I’m simply pointing out something that, deep down, we already know.  We know we need to put money away to fund our “passive income years”, we know Social Security cannot fund our lives in retirement, and we know the stock market can be a dangerous place to store savings.  Just ask anyone looking to retire around 2008 about safety in the stock market.

Using The Perpetual Wealth Code™ (PWC), we have helped clients increase their savings rate and reduce their risk of loss (to zero!) while helping them discover a better way to manage debt.  One of the primary reasons people give for not saving is the need to pay down debt, and the PWC tackles that issue head on.  If your debt it minimal, even better for you.

We’d love to answer any questions you have about how to get started using the PWC, and we’re also curious about your favorite Halloween candy (Krackel for me) or tradition.  Talk soon.

Happy Halloween!

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