Savings are critical to upward mobility

by Ryan Streeter on November 11, 2013. Follow Ryan on Twitter.

A new Pew study shows how important saving money is to people’s future upward mobility:

Those who left the bottom of the income ladder had 6 times higher median liquid savings, 8 times higher median wealth, and 21 times higher median home equity than did those who remained stuck at the bottom.

The authors expand on the finding a bit here:

Those who had higher liquid savings were significantly more likely both to have left the bottom and to have reached at least the middle. Someone with $10,000 in liquid savings, for example, is 6.5 times more likely to have moved up and 5.5 times more likely to have made it to at least the middle compared with someone with only $1,000 in liquid savings.

A decent Forbes column on these findings is here.