Even the Affluent Live Close to Margin: Survey

[DearAbby]

(imagine seeing glass jars of coins at your grocery store, "Help the wealthy this thanksgiving")


Even the affluent are living pretty close to the margin, spending what they have and borrowing on credit cards for everyday emergencies like household repairs, says a new study by MetLife.

As a result, the well-to-do are keeping their retirement savings liquid in bank accounts and certificates of deposit so the funds will be available for emergencies, says the study, titled "Money on the Sidelines." The report is slated for release on Wednesday, Nov. 17, but Reuters obtained a copy early.

"There's a high cost to this liquidity," says Robert Sollmann Jr. of MetLife. "They are putting their retirement security at risk by not putting their money back to work in the stock market."

The people surveyed by MetLife had more than $200,000 in investable assets, with most having between $250,000 and $1 million to invest. Yet more than half were using bank savings accounts (52 percent) and money market funds (51 percent) for at least a portion of their retirement savings. And 38 percent were using bank CDs.

"The most common reason for keeping these assets liquid is in case of household emergencies," the study found. That eclipsed other traditional reasons for keeping money liquid, such as worries about stock market risk.

More:

http://www.cnbc.com/id/40233849/


Forgive me for not shedding a tear, give me a moment I will try to squeeze one out :: pulls nose hair::: there you go.

[TwilightGardener]

1. What? The affluent aren't willing to risk their retirement savings

in the stock market? UNACCEPTABLE!! They're not helping big business make more money!! (sez CNBC)

[BlueIris]

2. That jumped out at me, too.

Lord knows, I wouldn't.

[closeupready]

3. Yeah, I loved that quote. LOL

No, we aren't willing to risk our savings to the sharks on Wall Street.

[TwilightGardener]

4. The report is called "Money on the Sidelines"--tells us right there what the

REAL concern is. More and more, those who are smart with money don't have every single retirement penny invested in stocks. And why would anyone have a problem with keeping at least SOME money liquid? How does one pay for a new roof, without a buttload of cash?

[eridani]

17. With a home equity loan. Oops! Not anymore

Not with so many mortages under water. Plus, most of these people are older and the comparatively high savings reflects nearly an entire lifetime of earning.

[DCKit]

7. They've figured out the market is rigged.

There hasn't been a word in months about Goldman Sacks front-running of trades.

Until Wall St. is regulated and investigated, nobody with two brain cells to rub together is going to invest.

[Igel]

8. It misses the point.

The money's not in the stock market not out of fear of loss but out of demand for liquidity.

[TwilightGardener]

10. There's this quote:

"Affluent investors are more likely than others to have changed their retirement savings patterns because of the financial crisis. More than half said they have changed their behavior, with many of them "parking" some retirement funds in low-yielding but safe and liquid instruments."

[Shandris]

5. What the hell kind of household emergency...

...do I need a half million dollars for?! I get nervous if it's $500 to repair the car, because I know more than one of those and that car isn't being driven again. A HALF MILLION?!

[MadHound]

6. Have you ever had to repair a Gulf Stream?

Hell, even getting the Bentley maintained is starting to cost thousands. And one simply can't serve Canadian caviar, it must be from Russia. Appearances must be kept up after all.

[eridani]

14. Probably this is more about avoiding a stock market bubble

It's been nothing but one investment bubble after another for the past 40 years. You can make money if you get in before they inflate and out after they burst, but I think most people with $250K-$1 mil in savings are older and therefore closer to retirement. This money reflects most of their adult earning years. You can't afford as much risk when you are older, no matter what the projected returns.

"Emergency" includes losing your last family wage job after the age of 50 and never being able to get another like it, of course.

[girl gone mad]

16. Loss of job and health insurance.

I agree with others, these people aren't rich. If they lost their income and/or had medical expenses, their savings would very quickly evaporate. Another stock market crash could wipe them out. They don't have enough wealth to buy into hedge funds and they aren't connected enough to get a government bailout.

[Matariki]

9. $250,000 household emergencies!

:rofl:

So much about this article doesn't pass the smell test.

[eridani]

15. I'd call getting laid off after age 50 and being unlikely to ever get another

--family wage job an "emergency" for sure. No wonder they want fairly large amounts of liquid assets. Affluent to homeless has been happening quite a lot over the last few years.

[AnnieBW]

11. Guilty as charged

I'm not affluent, but my husband and I are both employed, and we're having trouble right now. Mostly because our check from the insurance company for the repair work on our house hasn't come through yet.

I help people as much as I can - probably more than most. But, where's my good karma when I need it?

[spinbaby]

12. Those people aren't rich

Less than a million in investable assets isn't rich and isn't to be confused with the ruling class.

[eridani]

13. The OP did say "affluent," I agree---that isn't really "rich" n/t

[dmr]

18. Why would anyone put money into a rigged system?

The only ones making any money are those in on the scams. They're just making excuses because there's not enough people investing to scam.