“How much should I be saving?”
A young client asked me this recently. He’s entrepreneurial, just getting started, and had already built up some money in a 401(k). Like most people, he thought the question was about percentages and benchmarks.
But my answer back was simple: “Compared to what?”
The Real Breakdown of Your Dollar
When you look at income in real terms, here’s where most of it goes:
- Roughly 30% goes to taxes (federal, state, payroll, etc.).
- Nelson Nash’s research shows the average American pays 34.5% of every dollar to banks in the form of interest payments — mortgages, car loans, credit cards, business loans.
- That leaves about one-third of your income for living expenses, giving, and saving.
So when someone says you should save 10–20% of your gross income, the math feels impossible. How can you pay 30% to the government, 34.5% to banks, save 20%, and then still have something left to live on?
The Broken Benchmark
Most employers “recommend” saving 3–6% of your gross income, usually because that’s what they’ll match. And so people begin to think: if I hit that number, I’m on track.
But here’s reality: most families would need to save 10–20% of their gross income just to maintain financial stability over time.
When you look at the numbers this way, the real problem isn’t that people aren’t disciplined enough. The problem is that the system itself is draining their capacity to save.
The Snakes and Dragons
Nelson Nash used to call banks and financiers the “snakes and dragons” of personal finance. His point was clear: you don’t get ahead by working harder inside their system. You get ahead by cutting them out of your system.
If 34.5 cents of every dollar you earn is going to banks, then the fastest way to change your financial future isn’t by forcing yourself to save more — it’s by recapturing the interest you’re currently giving away.
That’s exactly what happens when you establish your own banking system. You keep the flow of capital under your control instead of theirs.
Why Access to Capital Matters
For a young entrepreneur, this isn’t just theory. Having access to liquid capital at the right time can mean the difference between starting a business or missing the opportunity. Locking money away in a 401(k) may check the box of “saving,” but it leaves you without the flexibility to build wealth where it matters most — in your own ventures and stewardship.
The Takeaway
So, how much should you be saving?
It depends. Compared to what?
- If you’re measuring against your employer’s match, the bar is too low.
- If you’re looking at your gross income, 10–20% is a healthy target.
- But if you’re serious about getting ahead, the real game is recapturing the 34.5% lost to banks and keeping that capital in your system.
That’s the quickest way to outpace your peers and build lasting financial strength.
Control your capital. Build your legacy.
