40% of Americans Fail This Financial Test – Do You?

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Americans are failing a basic financial test at surprising rates. A recent ABC News story reveals several reasons Americans are not financially secure. Atif Mian of Princeton University and Amir Sufi of the University of Chicago Booth School of Business asked a sample of 25,000 people a simple question and the results were shocking. We refer to it as “The $2,000 Test.” Researchers asked participants a simple question:

“Could you come up with $2,000 if an unexpected need arose?”

40% of respondents said they probably could not. The researchers and other academics described this as “shocking,” and Mian and Sufi believe “The majority of U.S. households do not have the buffer they need to help them survive through financial shocks.”

Additional survey questions included “Do you have 3 months emergency funds to cover expenses in case of sickness, job loss, economic downturn?”, to which 60% of households answered “no.” When asked about debt, 20% said they have too much debt right now. 

In the line of retirement, a study by the Employee Benefit Research Institute revealed that more than one-third (36%) of workers said they have only $1,000 saved for their retirement. This number was 28% last year. 60% of workers also said they and/or their spouse have less than $25,000 saved.

So what can Americans do to turn the odds in their financial favor? The answer is not as simple as just saving money. Inflation causes the value of money to decline over time. An example displayed in our Gold IRA Infographic demonstrates that $100 placed in a box in the year 2000 would lose around $18 of purchasing power if opened in 2013. The destructive power of inflation is continually eroding away at the true value of your savings.

On the flip side, clients who purchase gold from American Bullion look to increase their wealth but also receive the added benefit of protection against the damaging effects of inflation.  Also illustrated in the Gold IRA Infographic, $100 invested in gold in 2000 would have increased to $470 by 2013. Not only did the value of the investment increase, but the purchasing power was also protected in comparison with paper currency.

With the market’s instability and some economists even concerned about a stock market crash, American Bullion believes now is a great time to turn your savings into physical gold and ensure you pass the $2,000 test today and in the future. If you would like to know more about purchasing physical gold for your home or to add to your retirement accounts, please contact American Bullion at 1-800-326-9598 and speak with a precious metals specialist.