Wealthy Start Saving Young

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    There are two personal-finance chestnuts in nearly every article about saving money: Putting money away (instead of spending it) is difficult and people should generally save more than they already do. But despite these truisms, one subset of Americans seems to be doing pretty well at saving: the super wealthy. This may not seem all that surprising, but the reason isn’t simply that they have more money to save, says a survey by Bank of America U.S. Trust. Many wealthy individuals in the U.S. start saving in their teenage years. The report, ‘Insights on Wealth and Worth,’ shows on average, respondents said they started saving money at the age of 14 ‒ which is actually not that rare, as another broader survey found that over 52 per cent of American teenagers report having some kind of savings account. It’s worth noting that many wealthy people are born rich and the fact that they started saving early is likely more the result of their backgrounds than it is a sign of any special abilities that would lead to wealth. What is rare is the average age when these individuals started working and investing in stocks ‒ 15 and 25 years old, respectively. Both of these figures are unusual given that the basic minimum age for employment is generally 16 years and, according to a Federal report, only 13.8 per cent of U.S. households own stocks. In addition, respondents estimated that 52 per cent of their wealth came from income, while 10 per cent came from inheritance, and 32 per cent from investments. Other reports on wealthy Americans suggest that a lot of this wealth goes into savings. It’s in adulthood when the personal savings gap between average Americans and wealthier ones seems to widen significantly. Data from the U.S. Bureau of Economic Analysis indicates that the national personal saving rate ‒ the per cent of a person’s disposable income that goes into savings ‒ is currently 5.4 per cent. However, for America’s wealthiest one per cent, that rate is as high as 51 per cent.