1 million dollars in net worth is achievable with investments early in life in a 401(k) or other tax deferred retirement fund. ~$300/month starting at age 20 gets you to $1,000,000 which is about 10% of the income of someone making $40k/year. That’s not completely out of reach.
It would take you a lifetime of saving 100% of that ($1,000,000 initial investment + $40k/year), a 10% interest rate (which is ridiculous), and daily compounding to reach $1bil. That is the difference between $1mil and $1bil.
I think we should focus on raising the floor vs the ceiling. We should be taxing those who can afford it and using that revenue to help those that need it most. If that means someone like myself has to work a few more taxes to achieve my retirement goal, so be it, but I can’t bring up the low income people of this country on my own. The rich need to pay their fair share, and right now they aren’t and they’re getting tax breaks from Republicans.
Sure. Much of your observations speaks to the more conceptual differences between the millionaire and billionaire with respect to role in society. Workers generate plenty of wealth, more than enough for all to live well.
Billionaires generate no wealth, only hoard the wealth generated by workers.
No it absolutely is not achievable for a large portion of the middle class. That’s a ridiculous thing to say. Most people don’t even know how to invest their money early in life and are unlikely to be offered a 401(k) when they’re young either. $300 a month at age 20? How many 20-year-olds could afford to invest $300 a month even if they’re being paid a middle class wage?
Do you know how expensive rent and food are now? This sounds amazingly tone deaf.
Again- how many 20-year-olds have $300 a month to invest? How many middle class people in 2023 have 10% of their income to spare? It may be a good target. That doesn’t make it achievable when 62% of Americans are living paycheck-to-paycheck. They don’t have 10%. They don’t have 1%.
As far as any spare income I have? It goes to paying down medical debt.
Yeah it’s unlikely. Saving 1-10% assumes you’re making a livable amount of money with a bit extra, versus living paycheck to paycheck even after cutting all but the most vital expenses. (Ed- and not in significant debt)
Things were a lot different when I was in my 20s compared to now. A single job at an hourly wage used to actually be almost doable.
How many 20-year-olds could afford to invest $300 a month even if they’re being paid a middle class wage?
If you’re making median income outside places like LA/NYC/SF and don’t have children, it should be pretty affordable.
The place I work at doesn’t offer a 401k either (technically I’m self-employed/contract worker, so I do offer myself a 401k), but even if it doesn’t and you’re not self-employed, IRAs have a $6500/year limit and that’s something you just open yourself. And you can just open a brokerage account if you want more. Unfortunately, most people don’t know these kinds of things, especially not at 20yo. There’s definitely a education gap, which is a serious problem. And few people in their early 20s make the median wage and even if they are making that much, many are still buying lots of basic durable goods like furniture and kitchenware. So using 20 as a starting point is probably a little too optimistic…
If you’re making median income outside places like LA/NYC/SF and don’t have children, it should be pretty affordable.
Did you ignore the fact that a large majority of Americans don’t have any money to invest because they’re living paycheck-to-paycheck? Do you think they all live in those sorts of cities? Wages have been stagnant for decades now. Housing prices, rent and food prices are through the roof everywhere in the country, as is the (always) variable-rate APR on things like car loans. American household debt is $16.9 trillion.
Most people simply do not have money to save or invest. They’re not getting paid enough, essentials are too expensive, and they’re drowning in debt.
1 million dollars in net worth is achievable with investments early in life in a 401(k) or other tax deferred retirement fund. ~$300/month starting at age 20 gets you to $1,000,000 which is about 10% of the income of someone making $40k/year. That’s not completely out of reach.
It would take you a lifetime of saving 100% of that ($1,000,000 initial investment + $40k/year), a 10% interest rate (which is ridiculous), and daily compounding to reach $1bil. That is the difference between $1mil and $1bil.
Great. I’m 46. It’s not early in my life. I’m never going to be worth a million.
It’s not achievable for everyone for sure. The point is it’s achievable for a large portion of the middle class. Billionaire status is not.
For you, is it more significant that many may achieve such wealth, or that many more may not do so?
I think we should focus on raising the floor vs the ceiling. We should be taxing those who can afford it and using that revenue to help those that need it most. If that means someone like myself has to work a few more taxes to achieve my retirement goal, so be it, but I can’t bring up the low income people of this country on my own. The rich need to pay their fair share, and right now they aren’t and they’re getting tax breaks from Republicans.
Sure. Much of your observations speaks to the more conceptual differences between the millionaire and billionaire with respect to role in society. Workers generate plenty of wealth, more than enough for all to live well.
Billionaires generate no wealth, only hoard the wealth generated by workers.
No it absolutely is not achievable for a large portion of the middle class. That’s a ridiculous thing to say. Most people don’t even know how to invest their money early in life and are unlikely to be offered a 401(k) when they’re young either. $300 a month at age 20? How many 20-year-olds could afford to invest $300 a month even if they’re being paid a middle class wage?
Do you know how expensive rent and food are now? This sounds amazingly tone deaf.
https://www.cnbc.com/2023/01/02/middle-class-income-in-major-us-cities.html maybe you’re defining the middle class differently than I am. $300/month is 10% of the low end of that income level. 10% of total income is a generally considered a good target for retirement savings.
Again- how many 20-year-olds have $300 a month to invest? How many middle class people in 2023 have 10% of their income to spare? It may be a good target. That doesn’t make it achievable when 62% of Americans are living paycheck-to-paycheck. They don’t have 10%. They don’t have 1%.
As far as any spare income I have? It goes to paying down medical debt.
Yeah it’s unlikely. Saving 1-10% assumes you’re making a livable amount of money with a bit extra, versus living paycheck to paycheck even after cutting all but the most vital expenses. (Ed- and not in significant debt)
Things were a lot different when I was in my 20s compared to now. A single job at an hourly wage used to actually be almost doable.
I also fully admit I’m at the top end of the middle class and don’t know the struggles of low income earners.
If you’re making median income outside places like LA/NYC/SF and don’t have children, it should be pretty affordable.
The place I work at doesn’t offer a 401k either (technically I’m self-employed/contract worker, so I do offer myself a 401k), but even if it doesn’t and you’re not self-employed, IRAs have a $6500/year limit and that’s something you just open yourself. And you can just open a brokerage account if you want more. Unfortunately, most people don’t know these kinds of things, especially not at 20yo. There’s definitely a education gap, which is a serious problem. And few people in their early 20s make the median wage and even if they are making that much, many are still buying lots of basic durable goods like furniture and kitchenware. So using 20 as a starting point is probably a little too optimistic…
Did you ignore the fact that a large majority of Americans don’t have any money to invest because they’re living paycheck-to-paycheck? Do you think they all live in those sorts of cities? Wages have been stagnant for decades now. Housing prices, rent and food prices are through the roof everywhere in the country, as is the (always) variable-rate APR on things like car loans. American household debt is $16.9 trillion.
Most people simply do not have money to save or invest. They’re not getting paid enough, essentials are too expensive, and they’re drowning in debt.