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Not quite. For one thing, that +/- 200k matters a lot. Start out making $100k out of college. Get a 10% raise per year. Save half of everything you make over
by brians 8y ago
Not quite. For one thing, that +/- 200k matters a lot. Start out making $100k out of college. Get a 10% raise per year. Save half of everything you make over that initial $100k—like pretending you only got a 5% raise. You’ll be able to retire with $10M in the bank in your early 50s. At 40, you’ll have a couple million in the bank, kids in school, and be able to take modest family vacations without worrying about it. You can absorb health problems, needs for therapy of various sorts—give your kids a great launch.
The trick is finding ways to keep that compensation number moving up 10%/year. The first decade is easy. The second... can be done. Past that, I dunno.
- speedplane 8y ago> Start out making $100k out of college. Get a 10% raise per year. Save half of everything you make over that initial $100k—like pretending you only got a 5% raise. Do the math, it doesn't work. Starting with $100k at 20, with 5% raises every year gets you to $430k/yr at 50. You're still nowhere near $10M.
- brians 8y agoGet a 10% raise. At 50 you’re at $1.7M/yr. You save 0.8M that year, spend 900k—including paying off your kids’ education. Assuming 5% returns, your savings tick over to $11118263.51. But you’re right that it’s not pretending you only got 5% raises.
- FabHK 8y agoA 10% raise per year over 3 decades means 17x your original salary, earning you $1.7m annually by 50. Probably not something you can reliably plan for. That's why it's important to keep consumption in check.