How much does the average family have in investments?

I'm curious if there are any studies or articles indicating how much (by $ amount or % of net worth, etc) that families invest...

I'm sure this would be a hard thing to put numbers around since it probably depends on the type of family (affluent, or not), how much they keep (or need to keep) liquid or how much is tied up in homes/debt, etc.

My wife and I are somewhat new to investing and thus far have 4 ROTHs in Mutual Funds (with 2 more coming for 2007), a few general (non-retirement) investments in Mutual Funds, some traditional IRAs from years ago, some 529 investment, and my 401(k) investments.

We have contributed nearly $50k between the non-401(k) items and my 401(k) contributions over the years totals around $100k.

We have financial room to keep regular adds to my 401(k), followed by ROTH, followed by 529. These seem like the sequence in which available money should flow first...

After these, we keep wondering if we should continue to add available funds into general investments...(likely mutual funds)?

Just curious how others are positioned with the amount they put into the market (funds, stocks, etc) - either total estimates or $/year...

Thanks!

as you have rightly identified, there are many factors to be considered ... and the vast majority of those "many factors" are personal to you.

you should simply hire a professional. not only can they answer these questions, but they can answer them as it relates to you.

as a very general rule of thumb, you should be putting 20% of your income away for your future. within 5 years, this should be about 40% (you will have paid off all debt except for home). my most successful clients use this strategy with high levels of success for those who do.

p.s. quit opening new Roths each year. just have one and keep adding to it. it is likely you are paying a yearly maintenance fee for each one you have open (which means you are paying for 6 when you could be paying for two).

I believe the "average" family has a negative savings number.

So, don't go by the average!

1MO's savings advice is pretty good. But again, as you both say, it really depends on your situation. I don't have 20% or 40% -- I couldn't afford to, at my low rate of pay as a teacher. BUT I have a pension that will pay 60% of my salary, so I need only save the difference of 40% (or less, if I choose to count Social Security). So in my case, socking away 20% isn't necessary, although if I could, I would certainly get to my goal faster!

you forgot another factor, age. A couple of newly grads would have a different investment profile than someone ready to retire. A certain amount maybe OK for the new grads but not OK for an older couple. Based on these two things you can see that the average amount invested of a families is a meaningless #.

This is all good feedback and good points, thank you.

I recognized this would be difficult to determine a simple answer. As opportunities come up I often question if I'm getting too deep in the market with additional investments. I guess over the long run it beats holding onto it in the bank or spending it on unnecessary items.

I'll seek some specific advice on my best options from a professional.

1MO, good point on the additional investment into existing ROTH account. I did that last year (for # 3 and # 4) and will do that again this year. All good points.

Thanks!

The average family does have a negative savings number on a yearly basis, so never compare yourself to the average. My family breaks even or saves very little each year, so I know we are not the benchmark either. Individually, this is something I'm going to have to improve on, especially after I graduate.

A couple of quick questions regarding the original post and then a statement made a few times later in the thread.

ujnar24 - You mention you have four roth ira's. School me on why that is something a person does. I have one roth ira and one trad. ira along with my 401k so I just want to make sure I'm not missing an obvious invesment tactic.

Puck - You state the average family has a negative savings number. Do you mean the average family has a negative cash flow? I ask because I don't understand how someone can save negative money. Again, I understand a person having a negative cash flow (spend more than they make). Maybe I'm just defining the word save a little different.
Also you are a teacher as is my wife. She gets 60% of her highest three years after she reahes both the rule of 88 (numbers of years teaching plus age at retirement) AND 30 years teaching. It is said because most teachers think that once they hit the rule of 88 they automatically qualify for the 60% pension. Anyway, I just wanted to add that in case it helps someone reading this that is a new or old teacher for that matter.

What difference does it make?
Your financial plan needs to be work for you and your goals...not your neighbor.

I like Dr. Stanley's calculation (Millionaire Next Door).

(Age x Income) divided by 10

This formula takes into account both person's age and their income. You'd expect a 25 year old making $80,000 to have a smaller portfolio than a 55 year old making $80,000 just as you'd expect a high income earner to have a higher networth than a lower income earner.

If you are saving >15% of your income and don't have a lot of consumer debt (cars, credit cards, etc.) then you're in good shape. If your investments earned more than what you did, then you're in real good shape.