What is your savings rate?

Economics of Investing

One important factor in determining your potential to start investing is your savings rate. That is, the share of your total income that you don’t spend in month year. It can vary from negative values (if you increase debts) towards values as high as 50% or that you only spend half of your income on consumption.

Looking at the average across people in countries, here the savings rates in 2018 across countries , which are all pretty much in the range from -10% to 40%, with an average of 21%.

Source: author’s computation based on IMF’. World Economic Outlook 2019

But for individuals it can vary much more. Here an example of a very dedicated investor that achieves saving more than half of his income (54,3% in 2019!): https://mission-cashflow.de/ein-rueckblick-auf-2019-und-meine-ziele-fuer-2020/

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