How much do people have in savings? If you trust some newspaper reports, there appear to be some with billions and others with no savings at all. I am a curious person and maybe too skeptical, but I don't want to believe in the “only the rich are getting richer ...” stuff. Of course, undeniably there are some who benefit greatly from tax loopholes, incentives for the rich, investment opportunities that are only available to a select few, but I similarly believe that everyone has the potential to save – even if it's just a few bucks per month.
You may have read the article on the average wealth in the USA, Germany, the UK, and other North-American, European and Asian-Pacific countries. The post talks about the median average net wealth around the globe. But average wealth and savings are not the same. Wealth is all your assets, including property, share portfolio, bonds, even your car and other possessions. Your savings form part of your wealth. Particularly, your cash savings in the form of what you keep in your bank.
Thus let's, after the average net wealth post, look at the average savings in eleven countries from average savings per person in the USA to average savings per person in Latvia. Why bother? Because, there is one major difference between wealth and savings: wealth in its most gloabl form cannot easily be accessed. It gives you financial freedom and safety, but if you wanted to buy a new car, go on holiday, or buy the newest Iphone 8 or Samsung 7, it's your savings that can be tapped into.
There is another major difference between wealth and savings. Wealth creation takes a lot of effort, research, and understanding what you are doing (if you want to test yourself, here's a quick fun quiz). On the other hand, saving is simple and doesn't require any knowledge, time, or effort. Saving is easy as child's play. It really is - that is why as kids most of us had a piggy back to save our coins and the money we received for our nice uncles and aunts, birthday, Christmas, or the weekly paper round.
So here we go, let's find out the average savings per person for countries in North-America, Europe, and Asia-Pacific. Just to be clear what is meant by average savings per person: the amount a person holds in his or her current or savings account.
Astonishingly some of the richest countries on earth are well below some poorer countries. While this is not surprising as national wealth does not equate personal wealth, it appears to often be due to spending habits rather than income. While there are major differences, with the USA having less of a savings culture than people in Japan, Germany, or France, even the USA appears to have some keen and disciplined savers. If someone was to argue it's a cultural thing: to some extent this seems to be true, but it appears more a national cultural than a regional difference in saving habits. Because amongst our eleven countries, the average personal amount of savings are between $ 2,900 for the USA and ¥ 5,806,554 for Japan. The USA comes last in our ranking, but their neighbor Canada is one of the richest countries regarding personal savings.
Below the average savings per country:
||Average Savings Per Person (local currency)
||Average Savings Per Person (in €)
Only those saving can really answer the question why their cash savings are high or low, but it is certainly due to mentality and upbringing. The high rates in Japan, for instance, appear to be due to the historic events including the dire times and poverty after World War II. Similarly, there appears to be a grand difference between how individuals approach life in general. Those with higher savings tend to be populations that have instilled in their culture that cash is king and carry inherently that delaying gratification and putting money aside for the future are important aspects of one's own success and security.
One thing is for certain: those who regularly save are the ones with the greatest savings. And that is something we can all do, even if it's just a couple of bucks a week. With greater savings comes greater financial freedom, more comfort and the ability to do what one pleases. The greater the savings, the more one can invest in property, the stock market, or fulfill a wish such as going traveling. Even in spite of the low interest rates, it is never too late to save and when done regularly savings will grow quickly. Granted the effect of compound interest given the low interest rates on savings may not be in the saver's favor, but sooner or later interest rates will again increase and those with savings will be able to benefit the most.
Another explanation, however, for some of the lower figures may be that many are smart enough to move their cash savings into investments rather than have the low interest turn their productive workers into lazy coins. The statistics on the average wealth across the world would suggest, however, suggest so.
Even though focusing too much on comparing ourselves with others may be a bad for our own well-being, as we should focus on ourselves, but I tend to find it interesting to see what the rest of the world is up to. Sure, everyone's life is different, but we can learn so much from others.
All that is left to say now is: good luck on your exciting financial journey and happy saving and investing.