Regarding savings accounts ...
"According to a new survey by GoBankingRates.com, more than half of Americans have savings account balances below $1,000."
I would be one of those who would have less than $1,000 in a savings account. In fact, as well as I can remember, I never put anything in a bank savings account. That's because their rate of return was always easily beat by other types of savings which carry guarantees and insurance.
So my opinion is that the statistic above really doesn't mean very much.
I used to have two bank accounts; one for my business, and one for personal use. I don't see any point in having any more banking accounts unless I'm doing something illegal.
The last time I had a CD was maybe 30 years ago. It was in a small regional bank (which don't have to follow the same Fed rules as the big banks) and as I recall I picked up a 5-yr CD of theirs that would pay over 12% (but don't remember exactly). They were clearly needing cash. At any rate, the bank was closed by the Feds a couple years later, and a larger bank took over their operations, and the return on the CD was reduced to maybe 5.5%. Because of the takeover, I was allowed to take my money out without a penalty, so I did.
Here's a scary statistic:
Using data from the U.S. Census Bureau and the Federal Reserve, ValuePenguin found that the average credit card debt for households that carry a balance is a shocking $16,048 — a figure that has risen by 10% over the past three years. At the average variable credit card interest rate of 16.1%, this translates to nearly $2,600 in credit card interest alone. And many credit cards have interest rates much higher than the average.
I underlined the phrase above about carrying a balance. That's because if one includes households which pay off their credit cards every month, the debt per household is much lower but still very significant IMO. I have never carried any credit card debt.
Added to that credit card debt, the average American household carries an auto loan of $28,948.
In fact, I carried an auto loan only twice. Once when I first got out of college and again about 20-years later when I bought a new car (the only time I've done that because I think it's normally stupid). The only reason I paid interest on the new car loan was because the manufacturer offered a lower rate than I was receiving on CDs.
At age 48 I was nearly broke because of some things my wife did, and the company I worked for went out of business, so I was also unemployed and my life seemed like a train wreck, but because of my education and experience I was able to get another job without much effort. Two years into that, I bought a condo for $140K and had to carry a loan because I didn't have enough to pay cash for it then. Five years later, I sold the condo for $280K. At that point I realized I made a huge mistake -- there were five condos available when I bought mine and I could have financed all five of them and rented four of them out while living in the fifth.
I retired at 57, live on over 100 acres with ponds and creeks in California and have views most people can only dream of, and have no debt; and I could buy another parcel just as good as mine and still have plenty of cash left over. I was going to retire at 55 but a company kept throwing offers at me to work for them so I caved in and worked for two more years. The business closed two years later. I was surprised it lasted that long.
So how do you get from 48 to 57 and own everything including a large parcel in California and have a lot of cash left over? Work your ass off and learn how to trade the stock market, and it doesn't hurt to throw in a good real estate trade. Well, two real estate trades. I virtually stole the property I have now because I know how to work a deal with desperate sellers; while the condo I bought was financed entirely by the seller (including down payment and financing charges, and all of that is illegal), but I figured out how to buy property and make others pay all the up-front costs so I don't have to put up one red cent.
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