5 ms·

Investing $4000/month (which is what I do on a salary barely over $100k while living by myself in a 1 bedroom in the East Village, NYC and going out for every m

by dimva 12y ago

Investing $4000/month (which is what I do on a salary barely over $100k while living by myself in a 1 bedroom in the East Village, NYC and going out for every meal) at 3% will get you $1 million in 17 years. That means you'll be a millionaire by the time you're 40 if you start doing this right after graduating college. 3% happens to be the rate that stocks have historically appreciated above inflation, so by doing this you'll be a millionaire in today's money. Don't believe me? Try it: http://www.bankrate.com/calculators/savings/simple-savings-calculator.aspx http://www.bankrate.com/calculators/savings/simple-savings-c... EDIT: For the poor, there are many structural problems that lead to a cycle of poverty, but it is possible to escape even that with very good money management. I dated a girl whose parents came to America on a raft, with a fifth-grade education. They slept outside the 7/11 where they worked at first (didn't have to spend any money on rent), and ended up owning a large portion of their town by the time they were in their 50s. In short, don't knock thrift. Yes, earning more is always great, but savings combined with compound interest is magical.

dionidium 12y ago
That's great, but I hope you'll appreciate that earning $100k+ on a single income in your early twenties without kids isn't exactly the median household I'm talking about. As you point out, you've still got plenty of money remaining to live in one of the most desirable neighborhoods in the country while eating out for every meal. You're doing fine.
pyronite 12y ago
$48,000 a year in investment is $18,000 more than the median total income for an individual in the United States. What you are able to do is exactly what the vast majority of Americans are unable to do.
- dimva 12y ago
  Sure, but the article specifically mentions couples making $211k/year combined ($160k euros) spending it all. People making $30k/year obviously can't save as much as me, but they could save something. I saved money even when I was in college, working only in the summers and paying for food/housing myself. I think I made like $10k/summer. Of course, my lifestyle was much less extravagant than it is now - I never ate out and lived with many roommates.
webwright 12y ago
"Investing $4000/month (which is what I do on a salary barely over $100k while living by myself in a 1 bedroom in the East Village, NYC and going out for every meal) at 3% will get you $1 million in 17 years." Might want to consider that inflation averages about 2.5-3% annually... So effectively you're treading water there in terms of investment (though saving is good).
- seanflyon 12y ago
  The grandparent post specifically referred to 3% over inflation.
djokkataja 12y ago
"They slept outside the 7/11 where they worked at first (didn't have to spend any money on rent), and ended up owning a large portion of their town by the time they were in their 50s." I'm assuming that they weren't still working at 7/11 in their 50s. Median income in the United States is ~$50k/yr pretax[1], so saving $4000/month is unrealistic for the majority of people in this country (since they would have to be saving every cent they earn without paying taxes, housing expenses, food expenses, healthcare, etc). [1] https://en.wikipedia.org/wiki/Household_income_in_the_United_States#Household_income https://en.wikipedia.org/wiki/Household_income_in_the_United...

by dimva 12y ago

dionidium 12y ago

That's great, but I hope you'll appreciate that earning $100k+ on a single income in your early twenties without kids isn't exactly the median household I'm talking about. As you point out, you've still got plenty of money remaining to live in one of the most desirable neighborhoods in the country while eating out for every meal. You're doing fine.

pyronite 12y ago

$48,000 a year in investment is $18,000 more than the median total income for an individual in the United States. What you are able to do is exactly what the vast majority of Americans are unable to do.

dimva 12y ago
Sure, but the article specifically mentions couples making $211k/year combined ($160k euros) spending it all. People making $30k/year obviously can't save as much as me, but they could save something. I saved money even when I was in college, working only in the summers and paying for food/housing myself. I think I made like $10k/summer. Of course, my lifestyle was much less extravagant than it is now - I never ate out and lived with many roommates.

webwright 12y ago

"Investing $4000/month (which is what I do on a salary barely over $100k while living by myself in a 1 bedroom in the East Village, NYC and going out for every meal) at 3% will get you $1 million in 17 years." Might want to consider that inflation averages about 2.5-3% annually... So effectively you're treading water there in terms of investment (though saving is good).

seanflyon 12y ago
The grandparent post specifically referred to 3% over inflation.

djokkataja 12y ago

"They slept outside the 7/11 where they worked at first (didn't have to spend any money on rent), and ended up owning a large portion of their town by the time they were in their 50s." I'm assuming that they weren't still working at 7/11 in their 50s. Median income in the United States is ~$50k/yr pretax[1], so saving $4000/month is unrealistic for the majority of people in this country (since they would have to be saving every cent they earn without paying taxes, housing expenses, food expenses, healthcare, etc). [1] https://en.wikipedia.org/wiki/Household_income_in_the_United_States#Household_income https://en.wikipedia.org/wiki/Household_income_in_the_United...