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It's very far off. You would either need seriously over-performing investments or some kind of exit. I ran the numbers for a simple scenario, assuming a curren
by stellar678 8y ago
It's very far off. You would either need seriously over-performing investments or some kind of exit.
I ran the numbers for a simple scenario, assuming a current $150k income:
- With a 5% yearly raise and a 7% investment return, you end up with ~$3.8M at 20 years.
- With a 5% yearly raise and a 20% investment return, you end up with ~$14.5M at 20 years.
That 5% yearly raise would have you earning almost $400k at the end of 20 years too - probably up for debate how likely that is.
- ryandrake 8y agoWhat savings rate do you assume there? I agree the savings goal is very difficult even with ridiculously favorable assumptions! I’ve never heard of 5% yearly raises outside of the first 5-10 years of someone’s career. You’re lucky to get raises that approach inflation. And that 7% investment gain is average only if you have a very risky all-equities asset allocation the whole time you are saving. 20%? LOL. I don’t think most people’s “retire early” savings plans/goals can survive initial contact with reality.