4 ms·

This is a provocative but deeply misleading calculation. It assumes that our no-college-S&P-investor is a stoic enough soul to live on truck drivers' wages for

by GCA10 9y ago

This is a provocative but deeply misleading calculation. It assumes that our no-college-S&P-investor is a stoic enough soul to live on truck drivers' wages for 24 years, so that the stock market can do its magic, before collecting what genuinely would be a giant windfall. That's really hard to imagine. Missing out on the more robust income of a college graduate in your late-20s and early-30s means making sacrifices in terms of the clothes you wear, the vacations you take, the car you drive, the type of person who's likely to marry you; your dental care; your children's schooling, etc., etc. The temptation to start plucking out money from the S&P honeypot -- in the name of having a better life -- would be fierce. Nothing wrong with that. But if that big knot of savings is used to help pay for a better standard of living at age 25, or 29, or 34, then that means settling for a zero or negative return for that segment of money going forward. Goodbye to the fabled 7.1%. Bear in mind, too, that the stock market doesn't deliver 7.1%, year after year, with the happy predictability of a government bond. If your start year was 1999 ... and you waited 10 years to see how you were doing, you'd be looking at about a 30% drop in your portfolio. (You would have caught both the dot-com mess and the bankster mess.) http://www.multpl.com/s-p-500-historical-prices/table/by-year http://www.multpl.com/s-p-500-historical-prices/table/by-yea... It's easy, with hindsight, to say: "Just wait it out." But at the time, the pressure to get out of stocks is intense. And the anxiety about having bet your lifelong well-being on a market index going haywire would be excruciating.

throwawayjava 9y ago
> ...is a stoic enough soul to live on truck drivers' wages for 24 years Truck drivers make decent money. $40k, usually closer to $50k+ if you're experienced without accidents. Much more importantly, you don't need to be in an office building in a high rent area every morning. If your spouse also works, those salaries buy a REALLY nice house in Nowhere, MS/WI/KS! "Has the nerve and patience" might be a better way of saying it for truck drivers, at least. The job's downsides are the stress, risk of death/injury, and the crap hours. > The temptation to start plucking out money from the S&P honeypot -- in the name of having a better life And "temptation for a better life" isn't the only source of risk. A lot of low-skill but decent-paying jobs are extremely vulnerable to economic cycles. "Making the mortgage that was comfortable before the market crash / paying for medical bills that accrued while my insurance lapsed" can make a life time's worth of savings disappear in a matter of months.
- tutufan 9y ago
  Possibly true, but I cannot think of a worse occupation to get into right now, with self-driving trucks on the horizon. (Also, I have a trucker in the family, and the financials are harder than they look.)
  - throwawayjava 9y ago
    > but I cannot think of a worse occupation to get into right now, with self-driving trucks on the horizon I don't think this is necessarily true. Fully self-driving trucks are at least a generation out. I wouldn't seek a huge multi-decade capital investment into trucking for sure, but individual drivers aren't terribly exposed to such long-term risks. And even if SDF gets here sooner than expected, if you work for a company it's kinda whatever. Getting a CDL is a pretty small up-front investment compared to most jobs that both pay well and are in demand. As long as you're not an independent operator (=capital investment), you're not really making a huge investment aside from your time (for which you're well-compensated after the first year or so). > (Also, I have a trucker in the family, and the financials are harder than they look.) Certainly for OTR and especially for independent operators. And like I mentioned, injury/accident/economic downturn are huge threats. Trucking with a second family income remains a viable path to a middle class lifestyle, but you're right -- there's a good reason a lot of people choose other paths.

by GCA10 9y ago

throwawayjava 9y ago

> ...is a stoic enough soul to live on truck drivers' wages for 24 years Truck drivers make decent money. $40k, usually closer to $50k+ if you're experienced without accidents. Much more importantly, you don't need to be in an office building in a high rent area every morning. If your spouse also works, those salaries buy a REALLY nice house in Nowhere, MS/WI/KS! "Has the nerve and patience" might be a better way of saying it for truck drivers, at least. The job's downsides are the stress, risk of death/injury, and the crap hours. > The temptation to start plucking out money from the S&P honeypot -- in the name of having a better life And "temptation for a better life" isn't the only source of risk. A lot of low-skill but decent-paying jobs are extremely vulnerable to economic cycles. "Making the mortgage that was comfortable before the market crash / paying for medical bills that accrued while my insurance lapsed" can make a life time's worth of savings disappear in a matter of months.

tutufan 9y ago
Possibly true, but I cannot think of a worse occupation to get into right now, with self-driving trucks on the horizon. (Also, I have a trucker in the family, and the financials are harder than they look.)
- throwawayjava 9y ago
  > but I cannot think of a worse occupation to get into right now, with self-driving trucks on the horizon I don't think this is necessarily true. Fully self-driving trucks are at least a generation out. I wouldn't seek a huge multi-decade capital investment into trucking for sure, but individual drivers aren't terribly exposed to such long-term risks. And even if SDF gets here sooner than expected, if you work for a company it's kinda whatever. Getting a CDL is a pretty small up-front investment compared to most jobs that both pay well and are in demand. As long as you're not an independent operator (=capital investment), you're not really making a huge investment aside from your time (for which you're well-compensated after the first year or so). > (Also, I have a trucker in the family, and the financials are harder than they look.) Certainly for OTR and especially for independent operators. And like I mentioned, injury/accident/economic downturn are huge threats. Trucking with a second family income remains a viable path to a middle class lifestyle, but you're right -- there's a good reason a lot of people choose other paths.