Unfortunately, this reasoning relies on the assumption compounding interest is reliable in the long term. Over a length of lifetime the assumption does not hold

Unfortunately, this reasoning relies on the assumption compounding interest is reliable in the long term. Over a length of lifetime the assumption does not hold true, there are many ways to wipe out. Moreover, it relies on another assumption that you will be able to pull the investment when you need a lot of cash. It's easy to sip, quite hard sometimes to liquidate a big one, depending on the kind of assets you invested in. On the other hand, the risk is much lower than getting a startup running... There is a point where marginal extra dollar does not get you more happiness. But most people are not at that point, so this is advocating trading current happiness for future when you will be too old to enjoy the money. So, the right choice is to save enough to meet your current goals and live a frugal lifetime later - with considerations such as costs of healthcare.