Today I learned a funny little fact. The savings rate that you often hear touted in the news is actually a rather bogus number. The formal definition of the savings rate is the amount of money saved by individuals after you factor out fixed and discretionary expenses.

So what's wrong with that number you ask? Well, it doesn't take into account retirement savings, like 401k, 403b and traditional IRAs. It doesn't take into account any IRA savings for that matter; traditional or Roth. It also doesn't take into account pre-paying your mortgage; or pre-paying anything for that matter (where you would save money from not having to pay the extra interest).

Finally, it doesn't take into account individuals who are already in retirement. For example, if you're retired and say you have $3000 of expenses for the month. You would take a withdrawl of $3000 from your retirement accounts to satisfy those expenses. But the miscalculation here is that you've essentially saved 0% of your "income". Well, no duh, you only withdrew as much as you needed. This isn't factored in to the equation though, so one could argue that retirees save nothing, which is obviously not true.

Anyways, it's a funny number because you've probably heard lately that savings rates among consumers have been dismal in the recent past (negative in some cases). Well, that percentage is misleading. With the savings rate now being something like 6% when I last checked, it's still misleading, but you can figure that the real</strong> rate is something far higher than what is being reported.

I also recently found this super awesome mortgage amortization spreadsheet that lets you enter pre-payments into it. I've found several in the past that were just simple calculators. This one however is far better.

Summer's just around the corner and you can tell from the number of motorcycles on the road; just saw 4 in the last minute. This summer I'll be riding a paid off bike; cool! It needs an oil change, and I'm getting a windshield for it. I'm looking forward to riding more with my dad this summer and on in to the future. Natalie is also within range of a bike. I think she said her "motorcycle account" is at ~10k; yowza! You can buy a solid bike for even half that much! I'm super proud of her!