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I'm really not a fan of this breakdown because it seems to put each order of magnitude increase in liquid net worth as equal space on the graph. What percentage

I'm really not a fan of this breakdown because it seems to put each order of magnitude increase in liquid net worth as equal space on the graph. What percentage of people fall into each level. Maybe 50-60% of American adults fall into level 1? Surely, most folks will never reach Level 3 on this chart. While this is an interesting way for someone who has made significant increases in their income over the years, I don't think the thesis holds that the best way to increase your ladder is to just save money. We're all (or mostly all) wage earners here. Whether you are making $15/hour at a fast food gig, or $200+/hour as an engineer, you aren't going to save yourself into a new level. Saving might take some pressure off, and make you a little more comfortable within your level, sure, but for most people, it isn't reasonable for them to save 10 times the money they already have liquid without changing their income. The idea that we're all just a few 'steps' away from being independently wealthy is one of the worst parts of American culture in my experience. The individualism that follows from "if I can just outcompete someone else" seems to me to be the root cause of things like a general anti-labor sentiment, minimum wages as low as $2.13/hour, etc.

deleted 7y ago
[deleted]
lazyguy2 7y ago
It's entirely possible for a wage earner to become a millionaire in the USA. Anybody with a middle class income can do it. It's not even complicated or hard to figure out. The problem is that it requires discipline and living under your means. The first step is to eliminate debt and don't make stupid purchases. Debt includes credit card, personal loans, car loans, and mortgages. Stupid purchases are things like expensive vacations, eating from restaurants all the time, or buying new cars, or buying boats. That sort of thing. Pretty much: if you buy a brand new car you are a moron if your goal is to increase wealth. You want to do things include living in inexpensive neighborhoods, having secondary sources of income, having no adult 'children' and so on and so forth. Woe is to parents that are still paying for their 20-somethings. If you go drive around your city and you want to see were "middle-class millionaires" live you need to avoid the 'wealthy' neighborhoods. Look for the 50-something living in a older neighborhood driving older economy cars around. These people are going to have very low credit scores, as well. The best of them are going to have a credit score of 0, which means no credit history for several years. Do you calculate the cost of purchases by how many payments can afford in a month? If so you are doing it wrong. Instead you should only ever pay cash. If you don't have money in the bank to pay for it you can't afford it. The S&P 500 has, historically, provided a 12% return over average 20 year period. If you start off at age 30 and invest 500 dollars a month at that rate it would take you about 26 years to make your first million dollars. 6 years after that would be your 2 million dollar mark. 3 years later would be your 3 million dollar mark. By retirement you would have just under 4 million dollars. If you make $50k dollars a year then that amounts to about 12% of your income. You think that is too hard? The average car payment in the USA is at $550. The average credit card debt is $4,717. At 15% interest and doing minimum payments at $189 that card is going to take 10 years to pay off and $22,869 in total. That means that for every 1 dollar you spend the bank makes 4. If you can afford to make banks rich you can afford to make yourself rich. Just can't do both at the same time.
- icedchai 7y ago
  Yep. "The Millionaire Next Door" should be required reading for high school students.
  - robohoe 7y ago
    And "Rich Dad, Poor Dad"!
- thatfrenchguy 7y ago
  > Anybody with a middle class income can do it Median income in the US per person in 2018 is 35000$. 500$ a month is 6000 a month, or 17% of that before tax. At that income level you probably don't have any income to spare after housing + food + car + health care.
  - iso1631 7y ago
    Clearly you should be living in a cardboard box round the corner from your wave-slave job and hoping you don't have any medical problems for 20 years, then you're set for life. If you aren't a millionaire by the time you're 30 in the U.S. you've failed. Even if you did "make it", the plan is always based on exponential growth in the economy - i.e something like inflation+5% returns.
  - shantly 7y ago
    If you (have to) have a car and you've got more than one person in the household I'd say any margin over expenses (savings) under $1000 is just rainy-day money, not retirement savings. It will be eaten by copays, deductibles, new tires, and so on. Just a matter of time. Might go a few months "saving" then bam, kid breaks an arm and you're in it for whatever your annual out-of-pocket max is (may be really high, but bad news, if anything more than the sniffles happens, you're hitting it)
- sangnoir 7y ago
  While you're at it, here are other things to avoid if you're middle class and want to get wealthy: having kids, and getting medical attention. I'm all for saving and spending responsibly, but I don't there's a thin line between doing that and being miserly. Everyone needs to have a goal for themselves for how much "enough" is, work towards it while still living their lives (even if the goal is asymptotic)
jmchuster 7y ago
You might be able to jump by a million with the right job alone, but it's impossible to jump by a hundred million, unless you found a unicorn. Hence why people here are trying to do so.
- Pfhreak 7y ago
  Yeah, I'd say that a great job, putting you in the top maybe 5-10% of Americans, could get you to level 4. Levels 5 and 6 (tens of millions and hundreds of millions of liquid assets) will not happen for any appreciable segment of the population, but they are given equal weight on the diagram.
isoskeles 7y ago
> Whether you are making $15/hour at a fast food gig, or $200+/hour as an engineer, you aren't going to save yourself into a new level. My experience directly contradicts this. Large increases to your wages allow you to save money into the next level or make a move that increases your wages further. I doubt it works for everyone, but it worked and continues to work for me. Although I don’t think I’ll get to their level 5, and even if I do, I’m going to be cautious about spending on vacation. The defeatism that follows from, “I can’t possibly ever afford a home, etc.” is one of worst parts of American culture these days. People use this to make poor decisions throughout adulthood and then pretend it’s evidence that it must be impossible for anyone to get ahead by not blowing money on “avocado toast” and travel.
- Pfhreak 7y ago
  Sorry, I meant that without wage increases, saving alone won't bump you. If you get a wage increase, of course you'll be able to move up this ladder. (To a point. You won't reach all the levels with wages alone, no matter how hard you save.)

deleted 7y ago

[deleted]

lazyguy2 7y ago

It's entirely possible for a wage earner to become a millionaire in the USA. Anybody with a middle class income can do it. It's not even complicated or hard to figure out. The problem is that it requires discipline and living under your means. The first step is to eliminate debt and don't make stupid purchases. Debt includes credit card, personal loans, car loans, and mortgages. Stupid purchases are things like expensive vacations, eating from restaurants all the time, or buying new cars, or buying boats. That sort of thing. Pretty much: if you buy a brand new car you are a moron if your goal is to increase wealth. You want to do things include living in inexpensive neighborhoods, having secondary sources of income, having no adult 'children' and so on and so forth. Woe is to parents that are still paying for their 20-somethings. If you go drive around your city and you want to see were "middle-class millionaires" live you need to avoid the 'wealthy' neighborhoods. Look for the 50-something living in a older neighborhood driving older economy cars around. These people are going to have very low credit scores, as well. The best of them are going to have a credit score of 0, which means no credit history for several years. Do you calculate the cost of purchases by how many payments can afford in a month? If so you are doing it wrong. Instead you should only ever pay cash. If you don't have money in the bank to pay for it you can't afford it. The S&P 500 has, historically, provided a 12% return over average 20 year period. If you start off at age 30 and invest 500 dollars a month at that rate it would take you about 26 years to make your first million dollars. 6 years after that would be your 2 million dollar mark. 3 years later would be your 3 million dollar mark. By retirement you would have just under 4 million dollars. If you make $50k dollars a year then that amounts to about 12% of your income. You think that is too hard? The average car payment in the USA is at $550. The average credit card debt is $4,717. At 15% interest and doing minimum payments at $189 that card is going to take 10 years to pay off and $22,869 in total. That means that for every 1 dollar you spend the bank makes 4. If you can afford to make banks rich you can afford to make yourself rich. Just can't do both at the same time.

icedchai 7y ago
Yep. "The Millionaire Next Door" should be required reading for high school students.
- robohoe 7y ago
  And "Rich Dad, Poor Dad"!
thatfrenchguy 7y ago
> Anybody with a middle class income can do it Median income in the US per person in 2018 is 35000$. 500$ a month is 6000 a month, or 17% of that before tax. At that income level you probably don't have any income to spare after housing + food + car + health care.
- iso1631 7y ago
  Clearly you should be living in a cardboard box round the corner from your wave-slave job and hoping you don't have any medical problems for 20 years, then you're set for life. If you aren't a millionaire by the time you're 30 in the U.S. you've failed. Even if you did "make it", the plan is always based on exponential growth in the economy - i.e something like inflation+5% returns.
- shantly 7y ago
  If you (have to) have a car and you've got more than one person in the household I'd say any margin over expenses (savings) under $1000 is just rainy-day money, not retirement savings. It will be eaten by copays, deductibles, new tires, and so on. Just a matter of time. Might go a few months "saving" then bam, kid breaks an arm and you're in it for whatever your annual out-of-pocket max is (may be really high, but bad news, if anything more than the sniffles happens, you're hitting it)
sangnoir 7y ago
While you're at it, here are other things to avoid if you're middle class and want to get wealthy: having kids, and getting medical attention. I'm all for saving and spending responsibly, but I don't there's a thin line between doing that and being miserly. Everyone needs to have a goal for themselves for how much "enough" is, work towards it while still living their lives (even if the goal is asymptotic)

jmchuster 7y ago

You might be able to jump by a million with the right job alone, but it's impossible to jump by a hundred million, unless you found a unicorn. Hence why people here are trying to do so.

Pfhreak 7y ago
Yeah, I'd say that a great job, putting you in the top maybe 5-10% of Americans, could get you to level 4. Levels 5 and 6 (tens of millions and hundreds of millions of liquid assets) will not happen for any appreciable segment of the population, but they are given equal weight on the diagram.

isoskeles 7y ago

> Whether you are making $15/hour at a fast food gig, or $200+/hour as an engineer, you aren't going to save yourself into a new level. My experience directly contradicts this. Large increases to your wages allow you to save money into the next level or make a move that increases your wages further. I doubt it works for everyone, but it worked and continues to work for me. Although I don’t think I’ll get to their level 5, and even if I do, I’m going to be cautious about spending on vacation. The defeatism that follows from, “I can’t possibly ever afford a home, etc.” is one of worst parts of American culture these days. People use this to make poor decisions throughout adulthood and then pretend it’s evidence that it must be impossible for anyone to get ahead by not blowing money on “avocado toast” and travel.

Pfhreak 7y ago
Sorry, I meant that without wage increases, saving alone won't bump you. If you get a wage increase, of course you'll be able to move up this ladder. (To a point. You won't reach all the levels with wages alone, no matter how hard you save.)