The Money Mustache Community

General Discussion => Welcome and General Discussion => Topic started by: grantmeaname on February 13, 2013, 07:45:34 PM

Title: Mustache poll: how much do you save?
Post by: grantmeaname on February 13, 2013, 07:45:34 PM
Hey everybody! Another netizen suggested this poll over in the other poll thread (https://forum.mrmoneymustache.com/welcome-to-the-forum/who-are-you-demographic-poll/), and I thought it was a terrific idea, and that it is really very important. Use whatever method you want to calculate your savings rate (God knows we've had enough 'how do I calculate my savings rate' threads...), and feel free to post with any opinions you have to share!
Title: Re: Mustache poll: how much do you save?
Post by: destron on February 13, 2013, 07:56:53 PM
My method:

Savings: Increase to accounts + debt pay down
Income: net

Gets better every year.
Title: Re: Mustache poll: how much do you save?
Post by: dragoncar on February 13, 2013, 08:02:39 PM
While I appreciate the poll, I think the best question is:  What percent of your net income do you save above MMM level?  This will correct for large income disparities.

Something like: savings/(net income - 30k)

*I'm not really sure what MMM level is, but I think it's around 30k

Edit:  Maybe not the "best" question, but one I'm interested in.  Because consider:

A family saving 10k per year on 40k net income (25% savings rate, 100% mustache rate)

vs.

A family saving 25k per year on 100k net income (25% savings rate, 33% mustache rate)
Title: Re: Mustache poll: how much do you save?
Post by: grantmeaname on February 13, 2013, 08:06:04 PM
That would give negative numbers for people making less than $30k. I get where you're going, and it may be a good goal, but I don't think there's a formulaic way to address it.
Title: Re: Mustache poll: how much do you save?
Post by: TN_Steve on February 13, 2013, 08:18:56 PM
I assumed after taxes . . . 
Title: Re: Mustache poll: how much do you save?
Post by: sheepstache on February 13, 2013, 08:30:45 PM
Oh, I assumed gross.

I see what Dragoncar is going for in terms of reducing the effects of income inequality, but I think since sheer percentage is what determines your time to retirement, that's more interesting.

And we should decide whether we're talking about percentage of gross or net so it's consistent.
Title: Re: Mustache poll: how much do you save?
Post by: dragoncar on February 13, 2013, 09:41:43 PM
In terms of time to retirement, it's easier to use net.  That way time to retirement is:

(1-savings_rate)/(SWR*savings_rate)

*assuming savings returns just pace inflation

edit: also, gross and net will be the same for low earners, and but gross won't make sense for high earners since they will likely be in a much lower tax bracket on retirement
Title: Re: Mustache poll: how much do you save?
Post by: sheepstache on February 13, 2013, 09:49:33 PM
In terms of time to retirement, it's easier to use net. 


I agree.  In other words, taxes are not a "real" expense because you won't be paying them during retirement, or barely any (even if you're low-income, skipping the payroll taxes is nice), so you don't need to replace that money.  (I only went by gross because that's how the spreadsheet I use calculates it.)
Title: Re: Mustache poll: how much do you save?
Post by: Mike on February 14, 2013, 01:18:22 AM
I calculate savings rate by taking total saved divided by gross income minus all taxes and then multiply the result by 100 to get the percentage.
Title: Re: Mustache poll: how much do you save?
Post by: Self-employed-swami on February 14, 2013, 09:22:51 AM
I calculated mine in weekly take-home pay.  I accounted savings as mortgage payments (since I make a lot more than my minimum mortgage payment a week), RRSPs, and my two savings accounts for vacations and house repairs.  I suppose the vacation account isn't a true 'savings' account, in the MMM sense though, since we do drain it periodically, for trips, and things like Christmas gifts for family members.  But, on it's face value, I have a savings rate of 37% a week.  The remainder, which I didn't add in, goes to insurance (house and vehicle), food, utilities, property tax, DH's beer and wine-making supplies and a few monthly payments towards DH's student loan.

I have two different thought processes for this:

1) Savings should be anything that you are removing from your chequing account that isn't being spent (such as debt repayments, RRSPs, investments etc).

2) Savings should be anything that, at the end of the year, increases your net worth.  I could calculate this, but in 2012, we paid for things that weren't luxuries, but still didn't increase our net worth, such as about $20,000 out of my health care spending account (self-funded through my business).  In that grain though, I'd have to somehow figure out what the increase in value of my house, because of the renovations we did last year.  That would be tricky.
Title: Re: Mustache poll: how much do you save?
Post by: The Taminator on February 14, 2013, 09:24:10 AM
Net. Payroll deductions (CPP, EI and Federal Taxes) are gone in my mind. Makes no sense to include them in my calculations. Ditto for debt repayment. That's just spending I've already done and am now paying for.
Title: Re: Mustache poll: how much do you save?
Post by: lauren_knows on February 14, 2013, 09:26:41 AM
In terms of time to retirement, it's easier to use net.  That way time to retirement is:

(1-savings_rate)/(SWR*savings_rate)

*assuming savings returns just pace inflation

edit: also, gross and net will be the same for low earners, and but gross won't make sense for high earners since they will likely be in a much lower tax bracket on retirement

I've always debated this.  If it's easier to use net, how do you account for 401k and other pre-tax savings?

Made up example:  If you make $100k as a family, deposit $35k into pre-tax, and lop off 1/3 of gross for taxes, you have ~43k net. If you spend $25k, and save $18k, what are you saying your savings rate is?
Title: Re: Mustache poll: how much do you save?
Post by: Self-employed-swami on February 14, 2013, 09:27:26 AM
(1-savings_rate)/(SWR*savings_rate)

Hmmm. 

(1-.37)/(0.04*.37)
=.63/0.0148
=42.56 years??

I guess that might be somewhat accurate, since we seem to have had a spendy few years, with house renos and DH being back in school. 
Title: Re: Mustache poll: how much do you save?
Post by: frugalcalan on February 14, 2013, 10:02:02 AM
I went the lazy route.

Went to mint.  Looked at "net income" for the past 5 months.  Averaged it.

Perfectly accurate?  Probably not.  But it claims that I save about 54% of my after-tax income.  There is a $1500 gift in there, which I don't really think should count, so I put myself in the 40-50% category.
Title: Re: Mustache poll: how much do you save?
Post by: galaxie on February 14, 2013, 10:26:53 AM
I used after-tax take-home, but added pretax retirement contributions to both the "income" and "savings" column. 

I also included mortgage payments as savings for the poll.  With them, we have a ridiculously large savings number.  Without, it's more like 21%.
Title: Re: Mustache poll: how much do you save?
Post by: needmyfi on February 14, 2013, 10:32:07 AM
I like to look, for my own purposes, at only the portion of the money I bring in from working vrs how much of that I saved-excluding dividends, capital gains and a monthly loan repayment from my brother, but including 401k contributions and company stock purchases .  Have no mortgages or debts of any kind, but I do subtract $375 from that savings for prorated taxes and insurance on property.

I do it this way probably because the 4% swr is not as important to me since I am older -55- have no kids and and would like to die broke.  Since I know we can live on our rental income along with our ss (if I wait till I'm 65), I get a better picture of how much longer I will be working before I have enough money to safely bridge that gap.  We plan to live on those monies and use investment gains to fund vacations and travel.  Last month we saved 61% of our salaries.
Title: Re: Mustache poll: how much do you save?
Post by: Mike on February 14, 2013, 10:37:03 AM
Quote from: bo_knows
Made up example:  If you make $100k as a family, deposit $35k into pre-tax, and lop off 1/3 of gross for taxes, you have ~43k net. If you spend $25k, and save $18k, what are you saying your savings rate is?
I get 67.9% for that example.

Total saved = $53k
Income - taxes = $78k
Savings rate = 53k/78k x 100

Don't know why anyone would go by just net or just gross when it can be easily lumped together.
Title: Re: Mustache poll: how much do you save?
Post by: KulshanGirl on February 14, 2013, 10:42:28 AM
I used after-tax take-home, but added pretax retirement contributions to both the "income" and "savings" column. 

This is what I do.  I never thought about counting mortgage payments as savings.  That would make a big shift in my number.  What about counting only the principal part of the mortgage payment?  Is that what you do? That seems like it would actually be a good thing to count.  Hmmmm.
Title: Re: Mustache poll: how much do you save?
Post by: arebelspy on February 14, 2013, 10:43:30 AM
Quote from: bo_knows
Made up example:  If you make $100k as a family, deposit $35k into pre-tax, and lop off 1/3 of gross for taxes, you have ~43k net. If you spend $25k, and save $18k, what are you saying your savings rate is?
I get 67.9% for that example.

Total saved = $53k
Income - taxes = $78k
Savings rate = 53k/78k x 100

Don't know why anyone would go by just net or just gross when it can be easily lumped together.

Well, not easily.  Some of your savings is pretax, some is post tax, and you just lump them together as if they're the same.

See: millions of previous discussions on how to calculate savings rate, and OP comment on why he said to calculate it however you want, since everyone has their own pet ways.  :)
Title: Re: Mustache poll: how much do you save?
Post by: arebelspy on February 14, 2013, 10:44:12 AM
I used after-tax take-home, but added pretax retirement contributions to both the "income" and "savings" column. 

This is what I do.  I never thought about counting mortgage payments as savings.  That would make a big shift in my number.  What about counting only the principal part of the mortgage payment?  Is that what you do? That seems like it would actually be a good thing to count.  Hmmmm.

Yes, many people count the principal of debt repayment (mortgage, cars, even credit cards) as "savings." 

There's arguments for and against both methods.
Title: Re: Mustache poll: how much do you save?
Post by: dragoncar on February 14, 2013, 11:07:45 AM
(1-savings_rate)/(SWR*savings_rate)

Hmmm. 

(1-.37)/(0.04*.37)
=.63/0.0148
=42.56 years??

I guess that might be somewhat accurate, since we seem to have had a spendy few years, with house renos and DH being back in school.

Yep- but this assumes you are starting from zero, investing in something like tips, and don't lower your savings rate over time (for example, banking 100% of raises)

So for "low" savings rates (anything where time to retirent is many years) you will have to factor in compounding returns.... Hard to predict.

On net income: again, assuming mmm spending levels, "pretax" income is essentially equivalent to "post tax" income so no problem lumping them together.
Title: Re: Mustache poll: how much do you save?
Post by: Self-employed-swami on February 14, 2013, 11:55:21 AM
Yep- but this assumes you are starting from zero, investing in something like tips, and don't lower your savings rate over time (for example, banking 100% of raises)

So for "low" savings rates (anything where time to retirent is many years) you will have to factor in compounding returns.... Hard to predict.

On net income: again, assuming mmm spending levels, "pretax" income is essentially equivalent to "post tax" income so no problem lumping them together.

Interesting.  I already have a bunch saved up though, so I'm not that concerned :)

I'm more interested in staying home once we have young kids, and then maybe returning to something resembling employment, once they are back in school. 
Title: Re: Mustache poll: how much do you save?
Post by: The_Dude on February 14, 2013, 01:33:48 PM
I voted using money saved from gross net income of wages&gifts.  I did not include investment appreciation as income or savings.  That put me in the mid 30's % range.  If I were to use net income after taxes my savings rate is closer to 50%
Title: Re: Mustache poll: how much do you save?
Post by: yolfer on February 14, 2013, 02:39:40 PM
(1-savings_rate)/(SWR*savings_rate)

Hmmm. 

(1-.37)/(0.04*.37)
=.63/0.0148
=42.56 years??

I guess that might be somewhat accurate, since we seem to have had a spendy few years, with house renos and DH being back in school.

Yep- but this assumes you are starting from zero, investing in something like tips, and don't lower your savings rate over time (for example, banking 100% of raises)

So for "low" savings rates (anything where time to retirent is many years) you will have to factor in compounding returns.... Hard to predict.

On net income: again, assuming mmm spending levels, "pretax" income is essentially equivalent to "post tax" income so no problem lumping them together.

Or you could use MMM's "Shockingly Simple" table...

37% savings rate = about 26 years

http://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/
Title: Re: Mustache poll: how much do you save?
Post by: Herbert Derp on February 14, 2013, 02:49:42 PM
I am currently saving 75% of my net pay, which I hope to increase to 82% in a few months. I also save 4% of my gross pay through my employer's 401k program, which is matched 50%, bringing it to 6% I guess. So overall I am currently saving 81% if you just add those two figures together. I'm really looking forward to reaching 90%!

-Edit-

It's mathematically incorrect to add the savings percent of gross pay to the savings percent of net pay. Instead I should have added the dollar amount of gross pay savings to my net income. So actually I am saving around 77%, not 81%.
Title: Re: Mustache poll: how much do you save?
Post by: dragoncar on February 14, 2013, 04:53:42 PM

Or you could use MMM's "Shockingly Simple" table...

37% savings rate = about 26 years

http://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/

Right on.  But for that chart, you should still use savings rate as a percentage of net income.
Title: Re: Mustache poll: how much do you save?
Post by: arebelspy on February 14, 2013, 04:56:11 PM
Or you could use MMM's "Shockingly Simple" table...

Or calculate your own at Networthify - http://networthify.com/calculator/earlyretirement

But then you get to Yolfer's point that future returns are hard to predict.
Title: Re: Mustache poll: how much do you save?
Post by: darkelenchus on February 14, 2013, 05:15:49 PM
We averaged about 72% for the last two years, but my pay was cut, so we've been between 55% and 60% over the past few months.
Title: Re: Mustache poll: how much do you save?
Post by: Zaga on February 14, 2013, 05:50:36 PM
I used after-tax take-home, but added pretax retirement contributions to both the "income" and "savings" column. 

I also included mortgage payments as savings for the poll.  With them, we have a ridiculously large savings number.  Without, it's more like 21%.
I did the same as you.  I did include principle reduction on debts, because once the debt is gone those amounts will go to retirement savings.

So this says we saved about 44% of net in 2012.  Wow!  That's way better than I expected, since we save 15% into 401-K's and pay extra to debt right now.
Title: Re: Mustache poll: how much do you save?
Post by: Xtal on February 14, 2013, 09:05:52 PM
I used net income, and I added in my 401(k) contributions on both the income/savings side, as someone mentioned above.

I'm "only" saving 57%!  This is pretty good, I guess, but not as good as I thought. 

I'll have to see what I can do to improve this.  My goal is to be somewhere between 60%-75%.
Title: Re: Mustache poll: how much do you save?
Post by: JamesL on February 14, 2013, 09:55:18 PM
I'm saving about 70-80%, although I need more month's data to really make a decent average. I've only just started becoming very very conscious of my spending.

Take home pay=1500 month
Expenses= 272

I love at home= rent free, free food
Title: Re: Mustache poll: how much do you save?
Post by: kolorado on February 15, 2013, 09:53:09 AM
Income expected of $50K this year - payroll taxes +tax return +company match of 401K = total net income
401k saving us +401K savings them +net savings from sticking to the budget +mortgage principle payments =net savings
Net savings/Net income=savings rate
Ours is expected to be(and has been so far)43%. :D We're a one income family of five.
Title: Re: Mustache poll: how much do you save?
Post by: KulshanGirl on February 15, 2013, 10:59:55 AM
My savings rate is 37%.  My investment rate is 24% right now, and as I get braver I will invest more of my savings I'm sure.  If I count my mortgage principal payments, my savings rate jumps up to 44%. In a couple of years, I will eliminate full-time daycare from my expenses.  I pay 25% of my net income for daycare, ouch!  But I look forward to adding a good percentage of that to the savings rate in the future.  :)
Title: Re: Mustache poll: how much do you save?
Post by: dragoncar on February 15, 2013, 12:36:20 PM
C'mon, you have to hear from the 91%+ person.  Don't leave us hanging!
Title: Re: Mustache poll: how much do you save?
Post by: anastrophe on February 15, 2013, 01:33:50 PM
C'mon, you have to hear from the 91%+ person.  Don't leave us hanging!

Seriously! Who are you, and how do you do it?!
Title: Re: Mustache poll: how much do you save?
Post by: arebelspy on February 15, 2013, 01:47:20 PM
Obscene earner, ridiculous EERE (the extra e is for an extra extreme), or had help (i.e. living at home for free room/board)?

You decide!
Title: Re: Mustache poll: how much do you save?
Post by: jpo on February 15, 2013, 02:22:59 PM
C'mon, you have to hear from the 91%+ person.  Don't leave us hanging!

Seriously! Who are you, and how do you do it?!
I will hazard a guess, I think it is arebelspy! I think he said in the 2012 net worth update thread (https://forum.mrmoneymustache.com/share-your-badassity/net-worth-increase-in-2012!/msg46305/#msg46305) that his net worth jump had exceeded his day job income... so depending on some fuzzy math, it could be him?
Title: Re: Mustache poll: how much do you save?
Post by: Emerald on February 15, 2013, 02:27:45 PM
I used gross pay/total savings. 
Title: Re: Mustache poll: how much do you save?
Post by: Self-employed-swami on February 15, 2013, 03:54:00 PM
C'mon, you have to hear from the 91%+ person.  Don't leave us hanging!

Seriously! Who are you, and how do you do it?!
I will hazard a guess, I think it is arebelspy! I think he said in the 2012 net worth update thread (https://forum.mrmoneymustache.com/share-your-badassity/net-worth-increase-in-2012!/msg46305/#msg46305) that his net worth jump had exceeded his day job income... so depending on some fuzzy math, it could be him?

I think he'd be bragging here, if that was indeed him.
Title: Re: Mustache poll: how much do you save?
Post by: arebelspy on February 15, 2013, 04:12:17 PM
I think he'd be bragging here, if that was indeed him.

Ouch!  :D

I will hazard a guess, I think it is arebelspy! I think he said in the 2012 net worth update thread (https://forum.mrmoneymustache.com/share-your-badassity/net-worth-increase-in-2012!/msg46305/#msg46305) that his net worth jump had exceeded his day job income... so depending on some fuzzy math, it could be him?

I did indeed say that, but nope, not me, I'm a shade over 70%, because I count all income, I don't do fuzzy math to boost an artificial and unimportant number.  ;)
Title: Re: Mustache poll: how much do you save?
Post by: Self-employed-swami on February 15, 2013, 04:15:55 PM
I think he'd be bragging here, if that was indeed him.

Ouch!  :D


Oh, I meant it as a compliment :)
Title: Re: Mustache poll: how much do you save?
Post by: happy on February 15, 2013, 10:17:30 PM
OOOh look at that do we have  a normal distribution?
Title: Re: Mustache poll: how much do you save?
Post by: anastrophe on February 16, 2013, 06:35:28 AM
OOOh look at that do we have  a normal distribution?

We do! And a decent sample size, no less. Plenty of bias though;)
Title: Re: Mustache poll: how much do you save?
Post by: Mike on February 16, 2013, 12:12:04 PM
Quote from: arebelspy
Well, not easily.  Some of your savings is pretax, some is post tax, and you just lump them together as if they're the same.
For a number that isn't *that* important in the grand scheme of things to get exactly right, I'd rather keep the associated calculation simple. 

Besides, unless all of your after tax money is going into a Roth or some other tax free investment, the "post tax" savings to which you refer isn't entirely post tax.  Although I suppose one could ignore the 1099's and "forget" to file the info on a tax return, but I would guess that the IRS would figure that one out pretty quickly and slap you with an audit.
Title: Re: Mustache poll: how much do you save?
Post by: Jaherman99 on February 16, 2013, 01:37:15 PM
OOOh look at that do we have  a normal distribution?

We do! And a decent sample size, no less. Plenty of bias though;)

Ha!  I was going to comment that we had a great bell curve for the math geeks in the audience. You beat me to it.
Title: Re: Mustache poll: how much do you save?
Post by: arebelspy on February 16, 2013, 04:07:46 PM
Quote from: arebelspy
Well, not easily.  Some of your savings is pretax, some is post tax, and you just lump them together as if they're the same.
For a number that isn't *that* important in the grand scheme of things to get exactly right, I'd rather keep the associated calculation simple. 

Fair enough.  Anything is easy to lump together if you don't care about accuracy.  In that case, I mostly agree with your "Why use net or gross when they can easily be lumped together."

On the other hand, if someone else has the same goals as you (keep the calculation simple and have a fairly accurate number), can't you see why they might choose one or the other (net or gross)?

There are arguments for any method, and I find ones to count either of them as compelling as the arguments for lumping them together.  I also don't mind if people count 85% of their after-tax ones (if they make the assumption of being in a 15% tax bracket at retirement).  Any method works, as long as you have reasoning and are consistent. 
Title: Re: Mustache poll: how much do you save?
Post by: skyrefuge on February 16, 2013, 07:56:31 PM
I finally made a spreadsheet and did the math. I somehow was lucky enough to discover Mustachianism in 2004 (years before it even existed), so using my records for the last 9 years, found that my savings rate over that period has been 75.8%. It's been relatively constant over that period, with yearly figures ranging from 74% to 84%, except for the year that I bought a brand new car when it dipped to 53%.

So, looking at the Shockingly Simple Math (SSM), MMM tells me I can retire in 7 years at that savings rate. Yet, I've been doing it for more than 9 years, and even started in 2004 with a net worth already at $180k (9 times my yearly expenses). And I'm still working. Hmm. Have I disproved Mr. Money Mustache?

I believe the main problem is that my investments haven't performed at the level he assumes in the SSM. My annualized rate of return (IRR) over the 7 year (2004-2010) period was 6.42%, while inflation averaged 2.2%, for a real return of 4.2% per year. The SSM assumes a 5% real return.

My inflation-adjusted expenses over the same period have averaged $21.2k/year. After seven years (and with a big head start), a 4% SWR would have covered 90% of those expenses. After 2+ more years, a 4% SWR currently covers 131% of those expenses, so you might say that another problem with the math is that I'm just a big wuss. Anyhow, while the "7 year" result spit out by the SSM wasn't sufficient, it at least wasn't *too* far off.

Since I've carefully tracked my spending over that period, I used that to find my savings rate.  I subtracted taxes from my gross income-from-labor (which includes 401(k) match) to get net income, and then spending_rate=(spending/net_income). Everything I don't spend ends up getting saved by definition, so savings_rate=(1-spending_rate).
Title: Re: Mustache poll: how much do you save?
Post by: Mike on February 18, 2013, 02:41:24 AM
Quote from: arebelspy
Fair enough.  Anything is easy to lump together if you don't care about accuracy.  In that case, I mostly agree with your "Why use net or gross when they can easily be lumped together."
I think of it as a reasonable estimate moreso than anything else.  As long as people are generating an answer that is relatively accurate, it'll provide them a good (enough) idea of where they stand and how far they need to go.  Plus with useful sites like mint and the associated goals you can create there, you can pretty easily get to the point where the legwork is done for you in terms of how much time you have left before you hit FI (assuming of course that somebody did the proper initial calculation/used the right calculator to come up with a reasonable estimate of funds needed at retirement and plugged that number into the mint goal).

Quote
On the other hand, if someone else has the same goals as you (keep the calculation simple and have a fairly accurate number), can't you see why they might choose one or the other (net or gross)?
Of course.  My main concern is with calculations that are more intensive with data entry which leads to a greater likelihood of entering the wrong number in the wrong place and rendering the whole exercise useless.  Most people simply aren't that proficient at math (hence the existence of a multi-billion dollar tax prep industry that will even fill out 1040EZs for customers).

Quote
I also don't mind if people count 85% of their after-tax ones (if they make the assumption of being in a 15% tax bracket at retirement).  Any method works, as long as you have reasoning and are consistent.
I don't personally like tax assumptions since they generally don't fit the situation very well.  If I'm in the 15% bracket, I'm not paying 15% in taxes - it's probably going to be closer to 10%, if that.  Plus there's the whole long term capital gains issue - if most of my income is coming from that, I could escape federal taxes altogether (capital gains rate is zero for incomes up to $36,000 I think).
Title: Re: Mustache poll: how much do you save?
Post by: grantmeaname on February 22, 2013, 11:51:46 AM
Shout out to big M for putting the thread in today's post!
Title: Re: Mustache poll: how much do you save?
Post by: Nathan Drake on February 22, 2013, 01:45:28 PM
Look at that bell curve!

65% of net myself. 
Title: Re: Mustache poll: how much do you save?
Post by: Melissa on February 22, 2013, 01:53:09 PM
I used our saving rate from last year.  This year however it will be higher because I am now licensed and every dollar I make gets put into savings.....immeadiately.  I can't wait to see what it is at the end of the year!!
Title: Re: Mustache poll: how much do you save?
Post by: mm31 on February 22, 2013, 03:24:39 PM
Last year, I saved around 37% of my gross income. This year, I'll be saving around 43% of my gross income. This includes  401k, IRA and normal savings.
Title: Re: Mustache poll: how much do you save?
Post by: Self-employed-swami on March 01, 2013, 12:23:40 PM
My saving's rate last month:

91%

Whoop whoop!  (I bought $20,000 worth of TFSA's, in addition to our RRSPs, other savings, and DH's pension and student loan payments).
Title: Re: Mustache poll: how much do you save?
Post by: Cecil on March 07, 2013, 12:31:37 PM
I used savings including forced pension contributions + employer matches + mortgage principal paydown, and net income after taxes but including the aforementioned forced pension contributions (since those are really income we're saving).

Over the last two years, we average $7100 + $650 pension/RRSP contribs income = $7750 per month.

Expenses were $5000 avg, leading to

$2750 savings + $600 mortgage paydown + $700 employer matching = $4050 total savings

For a savings rate of 52.3%. And that includes a $14k trip to Europe that we won't be repeating. Hoping to drive this up to 70% in 2013! :)
Title: Re: Mustache poll: how much do you save?
Post by: kkbmustang on March 08, 2013, 09:44:22 PM
Start reading thread.

See requires math.

Scroll, scroll, scroll.

Respond: I got nothin'.
Title: Re: Mustache poll: how much do you save?
Post by: cv on May 28, 2013, 01:47:56 PM
In addition to the 15% put away for regular retirement, I put away 60% after tax dollars. I would be saving 70% if I don't tithe.
Title: Re: Mustache poll: how much do you save?
Post by: Joet on May 28, 2013, 07:12:54 PM
firmly in the 21-30% category. Though this is % savings of gross, ignore taxes and I move a bit further up the chart. My taxes are roughly 27% of gross [payroll, fed, state, property]. Towards 40% if you'll ignore taxes and maybe a little bump depending on how you define 401k-match funds. Is that income or savings? Income that you saved?
Title: Re: Mustache poll: how much do you save?
Post by: EK on May 28, 2013, 07:21:21 PM
I'm sitting RIGHT on the cusp of hitting 50% savings (net, not gross).  We've only been trying at it since February, and it's up dramatically from our former 0% savings rate.  Much less impressive than many here, but I am really proud of how far we've come.  I see more and more places to trim as we go, and while theres a ceiling right now due to high work travel costs (a necessary evil for now...), there's still room to improve.  We should be looking at a positive net worth easily by the end of the year (no consumer debt left, but have some student loans).  MMM has been an enormous factor in our success so far.  The most remarkable thing is that cutting back this drastically from where we were hasn't felt sacrificial whatsoever.  Just took a change of perspective.
Title: Re: Mustache poll: how much do you save?
Post by: simonsez on May 29, 2013, 07:03:22 AM

....assuming mmm spending levels, "pretax" income is essentially equivalent to "post tax" income so no problem lumping them together.

What does an MMM spending level have to do with an income level?  I'll admit they are likely correlated on average, but in this forum more than anywhere I'd say the connection is diminished.  Maybe there should be additional polls linked with this one for household income and/or type of primary occupation.  My guess is that there higher proportion of above average earners/households here on this site than on aggregate in the US/Canada/whichever country you represent.  Thus, my guess would be that pretax income is not essentially equivalent to post tax income for many even given mmm spending levels and/or savings rates.  If I'm wrong, hopefully it is because the majority are on a different phase of the FI life cycle than I am (student loan debt repayment/house down payment saving mode) and I will be there someday myself where I don't require an above average salary.
Title: Re: Mustache poll: how much do you save?
Post by: dragoncar on May 29, 2013, 01:41:25 PM

....assuming mmm spending levels, "pretax" income is essentially equivalent to "post tax" income so no problem lumping them together.

What does an MMM spending level have to do with an income level? 

Nothing that I can see. I must have had a lapse of reasoning.
Title: Re: Mustache poll: how much do you save?
Post by: Insanity on May 29, 2013, 01:43:24 PM
Start reading thread.

See requires math.

Scroll, scroll, scroll.

Respond: I got nothin'.

Yes, I laughed out loud at this... A lot.
Title: Re: Mustache poll: how much do you save?
Post by: some guy on June 07, 2013, 11:30:44 AM
Im nearly at the 20% (18.62 actually WHILE paying down debt) mark and make right about 30k annually with a family of 3. We are leaning towards an enjoy life in general and the outdoors....you know the stuff that was here before we were and not the unnecessary crap that the unknowing believe is essential at this point. My thinking is if we can do this and comfortably in Florida, there is almost no reason for anyone else to not be able to.

Once debt is paid, I will add nearly another 10-15% quite comfortably living on very very little. The less we alot ourselves, the easier it seems to be adjust and just realize what really matters.

No dumpster diving, or other oddities either.
Title: Re: Mustache poll: how much do you save?
Post by: Albert on June 07, 2013, 02:55:17 PM
I save a bit less than 30% of my after tax income. I'm a single guy living in Switzerland and currently making about 120-130k US dollars per year (depending on currency rates). Total tax rate including the mandatory pension fund contributions on income this high is 28%. It would be shameful to have any debts other than a mortgage while earning so much (I don't), but honestly I should be able to save more than I do... As many of you probably know life here is quite a bit more expensive than in most of US, but not THAT much more expensive!

There is a lot to learn still ;)
Title: Re: Mustache poll: how much do you save?
Post by: FlorenceMcGillicutty on June 07, 2013, 05:36:17 PM
I never really calculated it, but I'm saving about 45% of net income. That includes the employer match for 401ks, so my personal rate is probably around 40%. I could do a lot better and I'm working on it. I don't really want to set a goal--I just want to optimize--but I'm hoping to get to saving a minimum of 20%/month of take home pay, not including bonuses.
Title: Re: Mustache poll: how much do you save?
Post by: johnsonran on June 09, 2013, 06:26:42 PM
I am amazed to happen upon a community of people that think very much like I do :P

I save approximately 75% of my income

Zero debt

30% 401K and Company Match (Pre Tax) = Percentage of Gross

45% (Post Tax) = Percentage of Net

Taxes are irrelevant since they do not propel me forward. I care only about the physical amount saved.

These discussions have really helped refine my position on many things.

Thank-you!
Title: Re: Mustache poll: how much do you save?
Post by: zephyr911 on September 22, 2015, 07:52:16 AM
I'm laughing at my 18-months-ago self for thinking 50% was a dubious goal when I first found MMM (at least I gave it the old college try).
I'm closer to 60 now and my goal for the next year is 75. If I hit that, chances are I may never have a full-time job again after 38. Mwahahahaha
Title: Re: Mustache poll: how much do you save?
Post by: 2Birds1Stone on September 22, 2015, 09:14:02 AM
I originally voted 50% in this poll, months later I get to change my vote to 70%!

How about dem apples?!?!
Title: Re: Mustache poll: how much do you save?
Post by: rockstache on September 22, 2015, 09:25:52 AM
Thanks for resurrecting this Zephyr!! I had originally voted in the under 10% group and now our savings rate is 67%! WHAT?! I'm stunned. And we still seriously have such a long way to go to be living a mustachian life.
Title: Re: Mustache poll: how much do you save?
Post by: zephyr911 on September 22, 2015, 09:31:42 AM
Thanks for resurrecting this Zephyr!! I had originally voted in the under 10% group and now our savings rate is 67%! WHAT?! I'm stunned. And we still seriously have such a long way to go to be living a mustachian life.
YUP.

What surprises me now is not that I've cranked down the spending so much, but that even now, I look at my life and it's still an exploding volcano.

IOW, the challenge at this point is not finding savings, but time to implement fixes. So much low-hanging fruit, so little time
Title: Re: Mustache poll: how much do you save?
Post by: morning owl on September 22, 2015, 09:35:03 AM
That's really impressive, you guys who have upped your savings rate by so much! Wow! It must be nice to look back and see how far you've come.
Title: Re: Mustache poll: how much do you save?
Post by: 2Birds1Stone on September 23, 2015, 05:53:53 AM
That's really impressive, you guys who have upped your savings rate by so much! Wow! It must be nice to look back and see how far you've come.

Always room for improvement! The shockingly simple math article REALLY opened my eyes. Going from 45-50% savings rate up to 70-75% literally saves me a DECADE of working!

If that isn't motivation to improve income and cut expenses where they don't improve my life or bring me joy.......I don't know what it.
Title: Re: Mustache poll: how much do you save?
Post by: jprince7827 on September 23, 2015, 06:49:08 AM
I like to think of it this way:

At any point in time, if I were to clone myself and my wife, and they were born without any will to work, I could buy them an apartment just like mine and give them an allowance equal to my budget and they could live safely and soundly off of it for as long as I worked, without degrading my lifestyle or theirs in the slightest.
Title: Re: Mustache poll: how much do you save?
Post by: zephyr911 on September 23, 2015, 06:56:23 AM
I like to think of it this way:

At any point in time, if I were to clone myself and my wife, and they were born without any will to work, I could buy them an apartment just like mine and give them an allowance equal to my budget and they could live safely and soundly off of it for as long as I worked, without degrading my lifestyle or theirs in the slightest.
As if you'd throw away all that life energy on a couple of worthless freeloaders... xD
Title: Re: Mustache poll: how much do you save?
Post by: Civex on September 23, 2015, 10:05:21 AM
59% of net
Until this last paycheck, I actually had more deposited into 401k/profit sharing than I had deposited into my checking/savings account this year. Hope to continue this trent next year, but instead of after tax contributions, tackle student loans.

~$42k-savings YTD (401k/Roth/Savings)
~$70k net YTD
Title: Re: Mustache poll: how much do you save?
Post by: happy on September 26, 2015, 05:20:07 PM
Since the thread has been revived I'll update. I posted 50% in Feb2013 and  am now up to 60%.
Anyone else want to play?
Title: Re: Mustache poll: how much do you save?
Post by: marty998 on September 26, 2015, 05:31:35 PM
Can't work it out anymore :) Was 71-80%, now still around 80% but too hard to figure exactly.

don't know how to classify negative geared property investments...
Title: Re: Mustache poll: how much do you save?
Post by: Rosy on September 26, 2015, 08:41:31 PM
I voted in the 51 to 60% category which is the most popular vote:)

This Oct I hope to increase my % from 51 to maybe 53-56ish - not certain that I can reach a solid 60% or ever increase past 60%. For now I am ecstatic at the thought of going over 55% possibly starting in Oct.

Although it seems that whenever I reach a milestone in savings my mind leaps ahead, thinking up little schemes that might result in just a little more - but for now I'll shoot for 55 and see what happens.

Title: Re: Mustache poll: how much do you save?
Post by: ozbeach on September 26, 2015, 09:56:43 PM
72% of net here, averaged over four years (76% last year so I'm on the right trajectory!)

Net makes sense to me, as this is the money I have in my hand to spend so how much of that I save seems the most meaningful.

Interestingly, I tried to calculate out the gross figures and got 84%. I think this is probably skewed as I included the returns from my Superannuation (equivalent I think to a 401K) which are taxed much lower both on monies going in and on returns within the scheme.
Title: Re: Mustache poll: how much do you save?
Post by: Zoot on September 27, 2015, 06:51:36 AM
Calculating on a net basis, we save anywhere from about 60% to 70% monthly. 

Next year, though, I'm going to start calculating on a gross basis, looking at what percentage of GROSS is taken up by spending, saving, and paying taxes.  I'm still developing the spreadsheet tracking mechanism and have only plugged in some estimated numbers, but it looks like it will shape up as something like 20% spending, 55% saving, and 25% taxes.

(edited to fix syntax)
Title: Re: Mustache poll: how much do you save?
Post by: pachnik on September 27, 2015, 07:41:46 AM
I save about 35%.

Title: Re: Mustache poll: how much do you save?
Post by: Zoot on April 08, 2016, 11:28:15 AM
Calculating on a net basis, we save anywhere from about 60% to 70% monthly. 

Next year, though, I'm going to start calculating on a gross basis, looking at what percentage of GROSS is taken up by spending, saving, and paying taxes.  I'm still developing the spreadsheet tracking mechanism and have only plugged in some estimated numbers, but it looks like it will shape up as something like 20% spending, 55% saving, and 25% taxes.

Just wanted to chime back in to say that I actually DID this, and to share the results.

First three months show roughly the following:

Savings:  50%
Taxes:  25%
Spending:  25%

The "taxes" category includes Federal, state, FICA, Medicare, and property taxes; it will fluctuate throughout the year for the monthly figures (e.g., it'll be higher in October when we pay our county property tax; irregular side-hustle income will show a higher savings rate in the month the income was generated and stashed), but should average out for the yearly figure.  It's fun to watch it play out as I continue to track it.

Monthly NET savings rate still usually ends up somewhere in the 60-70% category.

Isn't this fun?  :)

Title: Re: Mustache poll: how much do you save?
Post by: forummm on April 08, 2016, 01:19:37 PM
This was a good excuse to go look at my spreadsheet and see what our savings rate was back in 2013. We've increased ours somewhat. We've dropped our spending from $35,800 to $27,500 during that time. Plus we had some smaller salary increases.
Title: Re: Mustache poll: how much do you save?
Post by: Spud on April 08, 2016, 01:54:03 PM
I just do what's described in the Shockingly Simple Math Behind Early Retirement ---> What is your savings rate as a percentage of your take home pay? Why do anything more complicated?

Answer for me - 60%.
Title: Re: Mustache poll: how much do you save?
Post by: arebelspy on April 08, 2016, 01:58:31 PM
What is your savings rate as a percentage of your take home pay? Why do anything more complicated?

Because sometimes it's more nuanced than that.

What if I put 18k in my 401k so my take home ends up being low?  Taking a percentage of my take home would be quite off.
Title: Re: Mustache poll: how much do you save?
Post by: BTDretire on April 08, 2016, 04:30:47 PM
I don't have a clue, we have never had a budget. Never put on paper income and/or out go.
 I did start tracking net worth once I figured out we were going to have one :-)
We just lived frugally from the first day of marriage. Invested in index mutual funds for
most of those years. It's been 34 years, and using our SS statements as the source for yearly
income data, we now have every dollar we ever earned. (Note; we had a small portion of our income that was not SS taxed in some years)
  That's a very high hurdle for someone retiring after 20 or 25 years. Not quite as hard to do
with 30 years of stock market growth.
 Keep saving, at some point you will think, wow, did we really do this!
I do every day.
                Just a poor boy that married the right woman.
Title: Re: Mustache poll: how much do you save?
Post by: Zaga on April 08, 2016, 05:19:29 PM
What is your savings rate as a percentage of your take home pay? Why do anything more complicated?

Because sometimes it's more nuanced than that.

What if I put 18k in my 401k so my take home ends up being low?  Taking a percentage of my take home would be quite off.
I include the 401-K in with my take home pay as well.  That way I'm accounting for it both as part of earnings and savings.

Not the company match though, that's just part of savings as it's impossible for it to be in my take home pay.

Yes, I know that if I didn't have money come out in the 401-K that our taxes would be higher, but I ignore that aspect for my calculation.  It's (total contributed to retirement + total debt principle reduction) / (paychecks + tax refund + 401-K employee contributions)
Title: Re: Mustache poll: how much do you save?
Post by: FIRE_Buckeye on April 09, 2016, 07:48:32 AM
70% on a net basis according to my spreadsheet (averaged over the last 12 months).
~60k annual salary, maxing 401k, maxing roth, putting 4-5k in my taxable account annually and using the amount leftover to save for a house.

Makes it easier having no kids or pets, minimal student loan debt (with a low interest rate) and sharing expenses with my girlfriend.
Been trending well north of 70% (closer to 80) so far this year, so hopefully I'll be able to make the jump to the next bracket higher here soon.
Title: Re: Mustache poll: how much do you save?
Post by: SyZ on April 10, 2016, 12:53:28 AM
I puy 15% into 401(k)s and another 25% towards debt each month and still seem to be going nowhere quickly
Title: Re: Mustache poll: how much do you save?
Post by: Zoot on April 10, 2016, 08:34:50 AM
I puy 15% into 401(k)s and another 25% towards debt each month and still seem to be going nowhere quickly

In this situation, it sounds like tracking your net worth might be more motivating--your savings rate goes toward upping the "positive" side of your net worth, while the debt repayment goes toward upping the "negative" side ("upping" in the sense that it's getting less negative and heading toward zero).  If you track net worth, you get to see the effect of BOTH of those moves-in-the-right-direction.  :)  Give it a try--with 40% of your income going toward increasing net worth, I think you'll be surprised at what you see if you look at the effect of that over time!

Regarding net versus gross:  I like tracking savings rate as a percentage of gross because in some ways, it's even more radically simple than tracking net (which requires some gymnastics to handle IRA contributions, employer matches, mortgage paydown, and so on).  The gross savings rate makes it much simpler:  it ends up being a simple calculation of ALL inflows and ALL outflows (with taxes being a special case of "outflow"), and savings is what's left over after all the outflows are accounted for. 

The way you track it (or don't track it) depends on what kind of of question you're trying to answer.  I think once we FIRE, I'll develop a different set of tracking--then, it'll be about not running out of money versus how much we're stashing away.  Not sure what that'll look like, but it'll be fun to develop it when the time comes (yes, I actually enjoy playing with spreadsheets, so it's a delight rather than a chore!).  :)
Title: Re: Mustache poll: how much do you save?
Post by: SyZ on April 10, 2016, 06:04:30 PM
My net worth is at $8k but it's a completely worthless number to track anything. If I lost my job tomorrow, I'd need to find one within a few months or be homeless. My 401(k) isn't accessible for 30 years. My car is not liquid and only valuable in the sense that I get money if I sell it, but then need to replace it because it serves a function. I just put a $1,000 payment on my highest interest loan in addition to minimums on the rest, and that's my entire 2 week paycheck. The only actual effect is I go from owing $20.5k to owing $19.6k. 

Very annoying
Title: Re: Mustache poll: how much do you save?
Post by: albireo13 on April 10, 2016, 06:38:35 PM
I don't see how you can include debt paydown as savings.   That's a fallacy.
You're not saving, you're just reducing your losses.

I guess if you consider any income greater than -infinity then, it makes sense.

Title: Re: Mustache poll: how much do you save?
Post by: forummm on April 10, 2016, 06:48:41 PM
I don't see how you can include debt paydown as savings.   That's a fallacy.
You're not saving, you're just reducing your losses.

Feel free not to do that if it makes you feel better.

However, I will do that since it is increasing my net worth regardless of whether my paycheck goes to paying off my mortgage or to buying stocks. Debt is just a negative balance in an account from past spending. Moving that balance closer to zero is just as helpful as moving another account further positive.
Title: Re: Mustache poll: how much do you save?
Post by: FrugalFan on April 10, 2016, 07:11:38 PM
My net worth is at $8k but it's a completely worthless number to track anything. If I lost my job tomorrow, I'd need to find one within a few months or be homeless. My 401(k) isn't accessible for 30 years. My car is not liquid and only valuable in the sense that I get money if I sell it, but then need to replace it because it serves a function. I just put a $1,000 payment on my highest interest loan in addition to minimums on the rest, and that's my entire 2 week paycheck. The only actual effect is I go from owing $20.5k to owing $19.6k. 

Very annoying

But that 1 k debt payment increased your net worth by more than 10%! (And reduced your debt by 5%!). Tracking that would be motivating to me in your situation. Of course, getting out of debt and having access to more liquid assets will make you feel more secure. Is some of the debt at low enough interest that once you pay off the high interest you can start building a small emergency fund and investing more? Keep at it! It will pay off eventually, and sooner than you think.
Title: Re: Mustache poll: how much do you save?
Post by: SyZ on April 10, 2016, 08:12:11 PM
I'm staying around $5,000 in my checking account but want all the debt gone, just so I can look around at other investment options and boost my retirement savings to 40% +

I'm not understanding how my net worth is going up by paying down debt

Random example:

$10,000 in cash, $20,000 in debt, -$10,000 net worth

The person pays $3,000 towards debt

$7,000 in cash, $17,000 in debt, -$10,000 net worth

Nothing's changed
Title: Re: Mustache poll: how much do you save?
Post by: Expatriate on April 11, 2016, 01:58:28 AM
Approx 50%, based on (pre-tax savings + after-tax savings) / (after-tax income + pre-tax savings). So I add deductions from gross income (retirement only here) to both net savings and income.
Title: Re: Mustache poll: how much do you save?
Post by: forummm on April 11, 2016, 08:55:34 AM
I'm staying around $5,000 in my checking account but want all the debt gone, just so I can look around at other investment options and boost my retirement savings to 40% +

I'm not understanding how my net worth is going up by paying down debt

Random example:

$10,000 in cash, $20,000 in debt, -$10,000 net worth

The person pays $3,000 towards debt

$7,000 in cash, $17,000 in debt, -$10,000 net worth

Nothing's changed

Moving money from one account to another doesn't change net worth. But when you get your paycheck and don't spend it and instead pay off a loan with it, that does change net worth. So when I tally up my monthly savings I take my total receipts and subtract my total expenses (loan interest is an expense but principal is not) and that's my savings. It doesn't matter if 100% of that savings went to paying off debt, it's still savings.
Title: Re: Mustache poll: how much do you save?
Post by: TheAnonOne on April 12, 2016, 02:33:31 PM
I'm staying around $5,000 in my checking account but want all the debt gone, just so I can look around at other investment options and boost my retirement savings to 40% +

I'm not understanding how my net worth is going up by paying down debt

Random example:

$10,000 in cash +, $20,000 in debt, -$8,000 net worth

The person pays $3,000 towards debt

$7,000 in cash, $17,000 in debt, -$10,000 net worth

Nothing's changed

I was going to type out a very long edit to your post including paychecks but the net of the deal is that if you get a $10,000 paycheck and put $10,000 into investments/savings OR put that $10,000 into debt repayment, your net-worth will go up by $10,000 either way.

Your actually showing this in your example, but now add a $10,000 paycheck to each example, in both examples your net worth would have had gone from $-10k to $0
Title: Re: Mustache poll: how much do you save?
Post by: dude on April 13, 2016, 08:21:50 AM
These things are always tricky for me, because I have a pension to which my employer deposits a princely sum each payday.  It is, after all, deferred compensation, or basically, forced savings.

Without it = 50% of net
With it = 75% of net

P.S. -- I include mortgage principal, student loan principal, FICA tax and my retirement deduction (the portion I pay toward my pension) in savings.
Title: Re: Mustache poll: how much do you save?
Post by: SassyG on December 22, 2016, 11:28:37 PM
Gotta share this one... Just calculated my savings rate for the last qtr of 2016 = 85%!!!! On track for 25% total for 2016, which is pretty darn good considering I was unemployed the first half of the year!!
Title: Re: Mustache poll: how much do you save?
Post by: BTDretire on December 23, 2016, 09:29:56 AM
We don't keep track of savings, we don't have a budget, we earn ~ $80K.
I track my net worth of financial assets only. Between 2010 and 2015,
We averaged an increase of $150k per year. In about a week I will tally up 2016
to see how we did. I'm excited to see.
As much as I disagreed with Obama, his stock market sure was good to us.
My $2,500 healthcare reduction turned out to be a $4,200 increase.
Can't win them all!
  Merry Christmas or Festivus.

Title: Re: Mustache poll: how much do you save?
Post by: 2Birds1Stone on December 23, 2016, 09:45:56 AM
We don't keep track of savings, we don't have a budget, we earn ~ $80K.
I track my net worth of financial assets only. Between 2010 and 2015,
We averaged an increase of $150k per year. In about a week I will tally up 2016
to see how we did. I'm excited to see.
As much as I disagreed with Obama, his stock market sure was good to us.
My $2,500 healthcare reduction turned out to be a $4,200 increase.
Can't win them all!
  Merry Christmas or Festivus.

How do you increase your net worth $150k/yr on $80k/yr income? I'm guessing a massive stock portfolio that appreciated heavily over this bull run?
Title: Re: Mustache poll: how much do you save?
Post by: BTDretire on December 23, 2016, 01:13:28 PM
We don't keep track of savings, we don't have a budget, we earn ~ $80K.
I track my net worth of financial assets only. Between 2010 and 2015,
We averaged an increase of $150k per year. In about a week I will tally up 2016
to see how we did. I'm excited to see.
As much as I disagreed with Obama, his stock market sure was good to us.
My $2,500 healthcare reduction turned out to be a $4,200 increase.
Can't win them all!
  Merry Christmas or Festivus.

How do you increase your net worth $150k/yr on $80k/yr income? I'm guessing a massive stock portfolio that appreciated heavily over this bull run?
Yes, thus my comment,
"As much as I disagreed with Obama, his stock market sure was good to us."
Just lucky to have a stash at the right time, it will be very interesting to see what
the next 5 years holds for us.
Title: Re: Mustache poll: how much do you save?
Post by: NoNonsenseLandlord on December 26, 2016, 11:56:00 AM
For the past 4 years, I saved ~200% of my gross W2 tech wages.  I lived ion my rental income.

I just quit my job this year.
Title: Re: Mustache poll: how much do you save?
Post by: clarkfan1979 on December 26, 2016, 12:37:37 PM
I like to calculate my savings rate based on my gross income and not my net income. I think taxes should be considered an expense and brain power should be used to minimize that expense. I don't like using net income and ignoring taxes.