All I’m doing is providing information. Saving $10,000 is very achievable. Some people get higher paying jobs by the time they are 30 and save $15,000/year instead. Some buy a house and save some. There are lots of paths. I completely disagree that saving $10,000/year is only something the 1% can do. I started my first job at a salary of $60,000 and was able to save $10,000/year via my 401K + 6% matching. I lived in a MCOL city, drove a Honda Civic, and traveled a little bit but not much. That’s not a 1% lifestyle. It’s better than average no doubt, but it’s accessible to many Americans.
We should talk more about how people can do it and how we can help those who don’t make enough money instead. Maybe instead of paying into Social Security we could develop a different savings plan?
Okay, but you have to understand that you're exceptional...at least top 1% in terms of capability. Only 88% of teenagers graduate high school. Some 60% of those will go to college, and only 46% of those will eventually graduate. Of those that eventually graduate, on average they will earn an average $50k starting salary, which takes your savings rate down to zero. 17% might get a salary of $85k. [Too lazy to cite the Google results, I'm on mobile].
So at least from my napkin math plus estimates, you've probably got less than a 10% chance of making enough to save any money at all for your first job out of college.
And I don't know about you, but I spent the first 5 years out of college paying off student loans...and I had a pretty low student loan burden compared to most. And many others might start families sooner than you've chosen to, which is expensive as well...and half of them will get divorced which is even more expensive.
I don't have anything against teaching people to do the best they can with the shit hand they've been dealt in life. But selling that by claiming that average people can be millionaires (even in today's terms, let alone 1990's terms) is selling an expectation that will never pan out for the vast majority of them. Any belief in the truth of that claim inherently relies on a very privileged view of the world, either because they were born with a silver spoon, or because they don't truly understand the scope of expenses that other people face, or because they think that average people are even capable of the kinds of jobs that they hold. It is flat out irresponsible to peddle this fantasy.
Please tone down the hyperbole. I'm not "peddling a fantasy" but looking at numbers and giving my best guess to speak of generalities with these numbers. Initially we were talking about software engineers. Now we're talking about the general population. Even in the initial estimate for software engineers you wouldn't reach $1mm with a 6.7 average return (it could be more, it could be less).
The person making $50,000 may have other benefits. Items like social security and a lower cost lifestyle in the first place. So maybe for them saving $5,000 is doable, and so they wind up with $500,000 and social security. Maybe that person marries someone and combined they make $90,000 and can save $8,000. I don't know. Y
> And I don't know about you, but I spent the first 5 years out of college paying off student loans...and I had a pretty low student loan burden compared to most.
Yes. I joined the Army to pay for college. Nobody in my family has ever attended. I didn't know what the SAT was. That took up 4 years, and I had no savings (obviously never learned what stocks were or anything like that, though there was some government program called the TSP but I was taught to be weary of the government of course so I didn't invest), and then I spent 3 years getting my undergraduate degree so I was around 25 when I started working. So about the same age, at least investing-wise.
> And many others might start families sooner than you've chosen to, which is expensive as well...and half of them will get divorced which is even more expensive.
Sure. Plenty of things that could happen. They could also choose to start a business, or marry a spouse that makes significantly more than they do. Idk. All kinds of things happen.
> Okay, but you have to understand that you're exceptional...at least top 1% in terms of capability.
Ha. I appreciate the accolades but promise that this is certainly not the case. I'm opinionated, and I'm no dummy, but I wouldn't consider myself exceptional in any meaningful sense to me personally. Maybe statistically.
The data indicate that it is quite rare to have $1MM at (roughly) the retirement age (fewer than 20% of those aged 65 have that amount[1]). It may seem like 20% is "common" or even "infrequent," but it's not: it's rare.
Moreover, the median SE salary is just below $100k/year[2]. It's uncommon (certainly not rare but uncommon) for a SE to be able to have a sustained savings rate necessary to achieve $1MM by retirement.
So maybe "peddling a fantasy" is a bit strong, but it's not exactly wrong. For most software engineers (over 50%) it simply is not a realistic scenario.
Yes, absolutely people don’t save like this. That $10,000/year can buy a boat, or maybe a bigger house. But most don’t do that, especially the Boomer generation.
And it’s even worse because if they actually retire at 65 they had like a good 40 years of compound interest too, 10 years is a big difference versus the 30 we were talking about.
We should talk more about how people can do it and how we can help those who don’t make enough money instead. Maybe instead of paying into Social Security we could develop a different savings plan?