Remember, people like Bill Gates and Warren Buffett count toward this statistic. The floor is $0, but the ceiling isn't double the average.

EDIT: Your guess about 70% making less than the average is probably close, or even low. I'd say more like 80% or 90%.

 

Okay, wait... what about taxes? What percentage goes there?

Are we supposed to assume that the difference between the Income before taxes ($63k) and the average annual expenditures (~$49.6k) is going into savings? (I doubt it) Or is that taxes? Paying off debt?

Need more informations.

 

I know some people who spend over 30% on alcohol.

They run up their credit cards buying stuff like Crown Royal.

Idiocy = Crown Royal + 15% Interest

 

^ they must be the same people that voted they have 43 drinks or more a week in the Backlot poll.

 

Things like this I think about all the time, Housing is a big waste for most people (I am guilty of this too), we tend to have have too much house. Part of that was from the saying 'that a house is your best investment', I don't know about all houses, but some I've had I barely broke even. Some have been great as far as money.

I think in the near future the number of people that grasp the concept of inflation, FOREX and investing will need to rise or else the number of people in near poverty will be out of control. My big worry is China revaluing their currency, overnight the inflation for most people will be huge, very scary.

 

Exactly? What about taxes? That is a HUGE part of the equation and should be distilled out of other numbers. Though, if this is government data, they don't want people to see that 40% or more of their total income is going to taxes including fed tax, state tax, sales tax, excise tax, social security, medicare, etc.

$63k before tax and nearly $50k in expenditures equals paycheck to paycheck for most people.

 

I'd wager to guess that $63k before tax and nearly $50k in expenditures would put the average American in the red.

$13k in taxes on $63 is only ~20%, and... well... if that's all the gov't is taking from you, then lucky you.

Then again, a report came out in 2005 as the first year the average American saved a negative amount. Meaning: The average American overextended him/herself in 2005, and I don't know if it's gotten much better since then.

 

I don't know about my total tax (including Medicare, sales tax, etc), but for my federal income tax, my effective tax rate only ends up being about 13-14% of my gross income once deductions and other things are factored in.

But I agree with your other point, most people probably are living in the red, or paycheck-to-paycheck.

 

Per the US Census (http://www.census.gov/prod/2009pubs/p60-236.pdf, page 36) the 2008 median household income was $50,303 and the mean (aka "average") household income was $68,424.

Anyway, the same site in a different post lists an average of 14.8% spent on taxes. That's $9337 for the scenario they are presenting.

So that means that $4116 is not accounted for in this chart, even with taxes figures. That's not a lot of savings, but it's certainly not the paycheck-to-paycheck or in-the-red scenario some of you are talking about.

 

I just did the math on mine. And this is on the gross not net take home. In order of percentage.

22% retirement savings.
21% Taxes (edited)
16% Housing and utilities.
9% Car
3% Food

~29% left for fun money/discretionary = Toys/travel/stuff

I find it interesting that taxes (which I am only counting payroll deductions not property/sales/other taxes) equals more what I spend on housing, utilities, and food.