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Today we have a guest post. Rob Bennett is the author of “Passion Saving: The Path to Plentiful Free Time and Soul-Satisfying Work.” It is available for sale at his web site, www.PassionSaving.com, which includes nearly 200 articles on saving and investing strategies developed in the Retire Early Community.

The conventional advice is that all workers should aim to save 10 percent of income. I reject this idea.

It is a bad idea to consult a rule of thumb when deciding how much to save. Effective saving plans are customized saving plans, not prefab saving plans. What you need to determine is, what percentage of income should someone pursuing your particular Life Goals and faced with your particular financial circumstances be pursuing?

Someone working a low-paying job because she believes that the skills she is acquiring will pay off big down the road may well not be able to afford to save 10 percent. Someone who has recently received a 50 percent raise can almost certainly afford to save far more than 10 percent.

There are many people today saving negative percentages of income (by going into debt). But a high percentage of effective savers save far more than 10 percent of income. It is not uncommon for effective savers to save 50 percent. In my best year, I saved 80 percent of post-tax income.

It is hard to save 10 percent of income if you are not pursuing a saving goal that provides strong motivation. That’s why most today are poor savers.

For those who are effective savers, saving 10 percent per year is usually a frustrating experience. When you only save 10 percent, you only save enough to be able to afford an old-age retirement. That’s none too inspiring a saving goal. Who gets excited about giving up things he could be doing with his life in his 20s, 30s, 40s, and 50s to provide for his needs in his 60s, 70s, 80s, and 90s? Most effective savers quickly graduate to more inspiring saving visions and higher saving percentages.

Save more and you will see results from your saving effort far more quickly. That will cause you to love saving more and more. Saving begets saving. It is when you begin saving more than 10 percent that your saving efforts kick into high gear.

Telling people to save 10 percent places a ceiling on their saving efforts as often as it places a floor on them. The save-10-percent advice encourages a way of thinking about saving in which people see it as something that must be forced, something that is boring, something that requires self-denial. Saving 10 percent is death.

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  1. I couldn’t agree more in relation to your point about customizing your savings plan. What works for one person may not necessarily work for someone else. People are different, people’s situations don’t all match.

    Posted by Until debt do Us Part | May 27, 2008, 4:30 pm
  2. So true, if I saved 10% I’d have an extra £300 a month to waste, yes waste. Starting to prioritize saving has motivated me to do more!

    Posted by Frugal Trenches | May 27, 2008, 5:22 pm
  3. We are currently saving zero.

    Hopefull this does not continue.

    Posted by rocketc | May 27, 2008, 7:16 pm
  4. @frugal trenches:
    I reckon saving is a catching habit, although I never forget to allow money for enjoying myself.

    It won’t - just got to sell the house.

    Posted by plonkee | May 27, 2008, 8:23 pm
  5. Lets face it most people don’t know what they are doing when it comes to saving/investing. I think these rules of thumb are fine. They help all of the people who don’t know what they are doing follow a simple plan. I think the smarter investors already know that rules of thumb aren’t perfect and don’t work for everyone. If we get complicated tailored solutions for every person, most people won’t be able to figure out what they should do or even bother trying to figure out how.

    Posted by David Carter | May 27, 2008, 9:35 pm
  6. Like David, I assume that such rules are a guideline for the truly clueless who need a starting point. But, yes, if you’re 40 and have nothing saved, 10% isn’t going to be anywhere close to enough, and if you’re 25 and barely scraping by on a meager stipend while getting a Ph.D., you probably shouldn’t worry too much if 10% seems elusive.

    Posted by E.C. | May 27, 2008, 9:52 pm
  7. I have read so many theories regarding saving, but I think that whichever one gets you to start on the path is the best one! I started with saving 10% for retirement and then only when I got into saving for other goals (and paying down debts) did it PF become empowering and rewarding. Good choice of guest post.

    Posted by penny | May 27, 2008, 11:28 pm
  8. I’m thinking that this is an example of the real rule that you should do what works for you. Not what works for someone else, not what would work if you were a better person, but what actually works.

    Posted by plonkee | May 28, 2008, 8:35 pm
  9. Rob - you are everywhere! :)

    Great post and I couldn’t agree more that this is one of those rules that is almost meaningless for most people. Admittedly it’s not a bad rule to follow if you have nothing else to go on but I think doing a proper financial plan which includes your particulars and goals will tell you how much you should be saving.


    Posted by Four Pillars | May 30, 2008, 8:14 pm
  10. Bennett has been promoting his special brand of Financial planning for some time.

    I suggest before anyone use his ‘planner’ or follow his advice, they should do some due diligence.

    Google “Rob Bennett + Purcellville” or just go to these links:

    One of his sites:

    A site that tracks and comments on his activities. He frequently participates as “Hocus”:

    Posted by Wiser Investor | June 19, 2008, 10:12 pm
  11. Dear Wiser Investor,

    Thank you for the information and links you provided. I googled “rob bennett financial advisor” and found a ton of stuff by him and about him. I nearly gagged on the stuff he puts out. Not only is the advice questionable, his own finances are a disaster and his personal comportment online is such that I’ll certainly never pay any attention to him.

    Posted by thunker | June 30, 2008, 4:20 pm
  12. Dear Plonkee,

    I’ve been reading some of the material regarding Mr. Bennett and would urge you in the future to do some vetting of your guest columnists. It rapidly becomes clear that Mr. Bennett is the classic internet crank, and I think your blog merits much better.

    Posted by thunker | July 2, 2008, 2:15 am
  13. @thunker:
    Thanks for your comments. Although I try to ensure that guest posters are on the level, sometimes they don’t turn out to be as good as I hope. On the other hand, whilst the poster may be questionable, the post itself can be ok, and at least provide a point for discussion.
    I’m grateful that for the comments pointing out some of the more *interesting* aspects of this particular writer, and I’m not planning on using them again. I hope you’ll stop by again soon.

    Posted by plonkee | July 2, 2008, 9:45 pm
  14. I’m grateful that for the comments pointing out some of the more *interesting* aspects of this particular writer, and I’m not planning on using them again.

    I’d be grateful if you would say why you would not want to use my material again, plonkee. It’s clear from the comments above that this blog entry has been an educational experience for your readers. Is there some reason why you would not want to repeat that experience?

    I’m not going to comment on the links provided above other than to note that they are to sites that are obvious smear sites. Are you saying that you find these sorts of tactics persuasive?

    There is material at my site that discusses the smear campaign against me that was initiated against me as a result of my discovery of the flaws in the Old School safe-withdrawal rate studies. Those discoveries have led to the development of a host of powerful investing insights at the various Retire Early/Indexing boards. I certainly don’t apologize for having discovered the flaws in studies that are likely to lead to millions of busted retirements in days to come. Anyone interested in knowing more about this should check out the material at the site. You will find that there are hundreds of people who have expressed deep gratitude to me for doing this work. There are thousands who have asked that action be taken against those leading the smear campaigns so that our community boards can return to discussing investing issues in an honest and informed way.

    If you have questions about the background on this matter, I am of course happy to response, plonkee. I hope that you do not mean what you say above.


    Posted by Rob Bennett | July 6, 2008, 7:21 am
  15. @Rob:
    Whilst I enjoyed your piece, I prefer to keep my readers happy. If people don’t want a particular writer guesting on my blog, then I probably won’t have them twice. As it is, in all cases, (particularly if I’ve written it myself) I strongly suggest that people do their own research.

    Posted by plonkee | July 6, 2008, 5:02 pm
  16. Plonkee - while it is your blog and your call as to who guest posts, I wouldn’t let one or two “readers” tell me what to do.

    If you have read any of Rob’s other guest posts then you will see that Wiser Investor follows him around and leaves the same sort of negative comments.

    I doubt Wiser Investor is a regular reader of your blog.

    I personally enjoy Rob’s guest posts - I’ve read several of them and think they are pretty good. Do I agree with everything he says? No, but so what? What I do disagree with is on every guest post, WI shows up after a few days “exposing” Rob. I mean really, if you don’t like the guy then don’t read him.


    Posted by Four Pillars | July 6, 2008, 5:38 pm
  17. I prefer to keep my readers happy.

    I of course understand your desire to keep your readers happy, Plonkee. I of course possess the same desire re my readers.

    I am the person who discovered the flaws in the Old School safe-withdrawal-rate studies. The person who organizes the Smear Campaigns (he is the owner of the site linked to above) is the author of one of the Old School safe-withdrawal-rate (SWR) studies. I made thousands of members of the Retire Early/Indexing boards happy by correcting those studies and saving their retirements. But I obviously did not make this one particular individual or his pals happy by doing so.

    What would you have me do? Should I have let thousands of my fellow community members suffer busted retirements in an attempt to make this one individual happy? Or should I have made the happiness of the community as a whole my priority?

    Set forth below is a link to an article at my site setting forth snippets put forward by 101 community members who indicated that they would be happy to see honest posting permitted on the SWR topic. Those 101 comments are a tiny fraction of those available to me from discussions of the SWR topic that were held at our boards.


    There is one respect re which your concern about keeping your readers happy is a legitimate one here. I can tell you from long experience that most people hate this abusive stuff. They hate it with a passion. If you act responsibly and ban those who post with zero good intent, I can promise you that your readers will be happy to participate in the learning experiences that follows from taking effective action re this sort of thing. If you show them weakness, they will do things that will make your readers very unhappy indeed. I’ve seen it play out that way many, many, many times.

    Take a look at the site linked to above and ask yourself whether any of your friends would want to be associated in any way, shape or form with the sorts of individuals who would create such a site and then link to it as if they were proud of it. If you conclude that none of your readers would want to be associated with these sorts of individuals, I think it would be fair to say that you have a responsibllity to protect your readers from them. Do an effective job of protecting your readers, and I am confident that you will have no problem keeping happy all those you want to keep happy.

    These people are unhappy for their own private reasons. I think it would be fair to say at this point that there is nothing that you or I or anyone else can do to make them happy until they develop a desire to make the changes within necessary to make this a possibility for them once again.


    Posted by Rob Bennett | July 6, 2008, 7:08 pm
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