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"Save 20%" ... gross or net?


Net. Gross is uninteresting for almost all purposes other than pre-tax investments you can make; just write off taxes as a drag force and pay attention to what fraction of your net income you're saving.

The important detail about increasing your savings rate: it also means decreasing your spending rate, and you can retire as soon as your savings generates income greater than your spending rate, not greater than your overall income.


Fair question, but OTOH it kinda doesn't matter since nobody does either.

Seriously, everybody talks about saving money, and everybody intellectually agrees it's a good thing, but next to nobody actually does it.

Which means, even if you're aiming for 20% of the little number, you're behaving smarter than the vast majority of your peers.


It would have to be net. Your tax situation determines the conversion from gross to net, and can vary wildly from person to person making percentage rates based on gross too variable.

While you should of course do what you can to reduce taxes, that's so complicated it warrants completely independent dialogue.




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