3 ms·

Investing presumes you already have money. This may not even be feasible for the majority of Americans; according to [0], 69% of Americans have less than $1,000

Investing presumes you already have money. This may not even be feasible for the majority of Americans; according to [0], 69% of Americans have less than $1,000 in savings. Let's say that I can save $1200/year for 10 years with an interest rate of 8%... After 10 years, it would have grown by about $5k. Some CEOs make that much in a day or week off of the exploitation of their workers. I would spend ten years, a whole decade!! And this assumes that it goes smoothly with no emergencies, no medical expenses, and wage growth keeps up with cost of living.. All these things that don't happen in real life. After all, everything that's required to live (the bare necessities) costs money, which eats away at my savings while making someone with already a lot of money even richer. If you take reality into account, I think it's a pipedream for people of lower socioeconomic statuses to be able to climb the economic ladder into a higher class. Again, I'm trying to illustrate how there's very little positive vertical movement for the majority of people. [0]: https://www.gobankingrates.com/saving-money/savings-advice/americans-have-less-than-1000-in-savings/ https://www.gobankingrates.com/saving-money/savings-advice/a...

outworlder 6y ago
Yeah. So your investment has increased by 5k in the first 10 years. You only contributed $100 a month, which is doable for a lot of people, and go 5k for 'free'. In 20 years, it will have grown by 30k on top of your contributions. Again, assuming you never adjust your contributions. Try the same calculation, but now with $500 a month. Although 8% is optimistic, compound interest is really powerful. It is indeed difficult to get ahead if you are paycheck to paycheck. It can be impossible if you can't even pay for your basic necessities. But many people are not in that situation. They buy stuff they don't need. They buy new cars on credit - which is a depreciating asset with interest. They buy phones they also don't need - sometimes in multiple installments too. Instead, try throwing anything extra you can scrape in investments. If you are aggressive about it, you can retire much earlier than you would be able to, normally.
- EarthIsHome 6y ago
  > But many people are not in that situation. They buy stuff they don't need. They buy new cars on credit - which is a depreciating asset with interest. They buy phones they also don't need - sometimes in multiple installments too. > > Instead, try throwing anything extra you can scrape in investments. If you are aggressive about it, you can retire much earlier than you would be able to, normally. Again, I don't think this is feasible for the majority of Americans, but let's push ahead with your premise that many people can scrape their way to an early retirement. 1) The length of time to accumulate that much wealth is really sad to me. Decades of living the one life you have as meek as possible under the hope of retiring early. Again, it's still a hope. Say you make $15/hr -> 1 year is $30k. After 20 years, you finally hit that $30k mark that takes you one year to make from wages. Idk man, that's super bleak to me. Obviously, the alternative to early retirement is that they work their lives away until they can't work anymore. For people who are not uberwealthy, early retirement requires a lowering of their lifestyles (I do understand that a lot of people find it fun or gamify it or find a way to validate cuts in their lifestyles). But they have to center their lives around it; it determines where they live, what you buy, what you wear, having kids, etc. 2). This is more of a question, but doesn't require answer.. just for thought provoking. Because these people are poor, are they not allowed to enjoy certain things like new phones, TV, entertainment? We've built our society to hold these things dear (save for the early retirement folks who have to actively ignore those pressures): We have ads that encourage spending, we talk about the American Dream... everything about our society encourages buying things, so I definitely understand why people do it. I'm guilty of it; one of the most exciting things is buying something. When things are so bleak, buying something feels good.. it hits that dopamine. Both 1) and 2) are a consequence of the society we live in. It's easy to see 2), but a bit harder to see 1). If we had guaranteed necessities: food, housing, healthcare, etc, the early retirement folks wouldn't have to change their standard of living. The fact that poverty exists and that people struggle is an easily solvable problem with wealth distribution. My point is, it doesn't have to be this way and that the pursuit of profit makes it this way. For just several handful of people to be as wealthy as they are, many magnitudes more of people have to live in poverty. We should be changing the system so that it benefits everyone, not try to find ways of survival within the system.

outworlder 6y ago

Yeah. So your investment has increased by 5k in the first 10 years. You only contributed $100 a month, which is doable for a lot of people, and go 5k for 'free'. In 20 years, it will have grown by 30k on top of your contributions. Again, assuming you never adjust your contributions. Try the same calculation, but now with $500 a month. Although 8% is optimistic, compound interest is really powerful. It is indeed difficult to get ahead if you are paycheck to paycheck. It can be impossible if you can't even pay for your basic necessities. But many people are not in that situation. They buy stuff they don't need. They buy new cars on credit - which is a depreciating asset with interest. They buy phones they also don't need - sometimes in multiple installments too. Instead, try throwing anything extra you can scrape in investments. If you are aggressive about it, you can retire much earlier than you would be able to, normally.

EarthIsHome 6y ago
> But many people are not in that situation. They buy stuff they don't need. They buy new cars on credit - which is a depreciating asset with interest. They buy phones they also don't need - sometimes in multiple installments too. > > Instead, try throwing anything extra you can scrape in investments. If you are aggressive about it, you can retire much earlier than you would be able to, normally. Again, I don't think this is feasible for the majority of Americans, but let's push ahead with your premise that many people can scrape their way to an early retirement. 1) The length of time to accumulate that much wealth is really sad to me. Decades of living the one life you have as meek as possible under the hope of retiring early. Again, it's still a hope. Say you make $15/hr -> 1 year is $30k. After 20 years, you finally hit that $30k mark that takes you one year to make from wages. Idk man, that's super bleak to me. Obviously, the alternative to early retirement is that they work their lives away until they can't work anymore. For people who are not uberwealthy, early retirement requires a lowering of their lifestyles (I do understand that a lot of people find it fun or gamify it or find a way to validate cuts in their lifestyles). But they have to center their lives around it; it determines where they live, what you buy, what you wear, having kids, etc. 2). This is more of a question, but doesn't require answer.. just for thought provoking. Because these people are poor, are they not allowed to enjoy certain things like new phones, TV, entertainment? We've built our society to hold these things dear (save for the early retirement folks who have to actively ignore those pressures): We have ads that encourage spending, we talk about the American Dream... everything about our society encourages buying things, so I definitely understand why people do it. I'm guilty of it; one of the most exciting things is buying something. When things are so bleak, buying something feels good.. it hits that dopamine. Both 1) and 2) are a consequence of the society we live in. It's easy to see 2), but a bit harder to see 1). If we had guaranteed necessities: food, housing, healthcare, etc, the early retirement folks wouldn't have to change their standard of living. The fact that poverty exists and that people struggle is an easily solvable problem with wealth distribution. My point is, it doesn't have to be this way and that the pursuit of profit makes it this way. For just several handful of people to be as wealthy as they are, many magnitudes more of people have to live in poverty. We should be changing the system so that it benefits everyone, not try to find ways of survival within the system.