The saving ratio shows how much money you save from the income you earn.
We can describe the positive cycle of the saving ratio.
Wealth creation depends upon the saving ratio
More saving ratios create more money for investment.
More investment creates more return on investment.
More return on investment creates more income
More income creates more saving
You hear about the saving ratio that saving ratio should be 20 or more than 20 to save money from the investment.
However many of us do not have enough earing to start saving near to 20
So in that case we should start from 5 % to 15% saving from income and then grow to 20% criteria.
Do not worry about the saving ratio being below 20%. Just start improving your saving ratio step by step.
The saving ratio also defines how much you are saving while earning a lot. Many times people misunderstand Bank Balance with their saving ratio.
The bank balance is different from the Saving ratio.
Saving ratio calculation should be done every month or quarter, or annual basis.
The saving ratio indicate your financial habit of saving
As saving ratio depends upon income if you are not earning any income. Your saving ratio is near zero