Here is what happened in my life. In 2004 (age 38) I had about 20 thousand in a 401k and very little else. I took job where my bring home pay increased 100%. I immediately started maxing out my 401k (employer match was 6%). In 2004 the max contribution was 13000. At age 50 I started doing the 401k catchup. I've been maxing for 21 years and doing the catchup for 8 years. My 401k balance is 1.6 Million. At 5% return, I can take 70K out per year for the next 40 years.

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Posted by wackatimesthree

Member since Oct 2019

11727 posts

Posted on 3/10/25 at 3:50 pm to BBONDS25

quote:
What a ridiculous statement

Made all the more ridiculous for taking so long to make it.

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Posted by TigerTalker142

Lafayette

Member since Oct 2007

1122 posts

Posted on 3/10/25 at 7:03 pm to wackatimesthree

Feel like a lot of you are just missing the forest for the trees here (or just not watching the video). Stories of you and yours investing and doing well is great, My wife and I are also in our early 30's and on course to be multi-millionares. Hopefully that's enough for us to retire at a reasonable point in time. That’s what we should want to protect. We are all part of a cohort that benefited from relatively cheap asset prices (now exacerbated by increasing wealth inequality) and relatively low cost of living. The whole point of the video is that we are on track for this to become less and less possible for the average member of society. Yes the video is from a guy in Britian, while they are in a later stage of this process and have a somewhat different economic and societal backdrop that exacerbates some of these issues even more, the general principle absolutely holds true and is playing out in the US as well.

Compound growth assumes infinite room for growth. However, the economies ability to produce new assets and the assets currently available are not in fact infinite. The nature of compound growth allows those with more assets to generate more income and thus accumulate more assets without a proportional increase in individual economic output. If, as a cohort, they generate more income faster then the economy generates new assets for them to put that money into then they buy assets that others already own. This in turn allows them to generate even more wealth while simltaneously increases the cost of existing assets, making it more expensive for the next inidivual to purchase the asset and thus reduces their ability to participate in the compound growth cycle.

That is what is happening now. As of 2023, the household wealth of the top 1% was 31% of total US Household wealth compared to 21% in 1990. This trend is not good. More and more wealth is accumulated at the top at the expense of the majority of the country, including many of you all. You may have gotten in early enough to where you'll get yours and can benefit from the disparity, if so congrats in large part on being born when you were, but your kids and grandkids will continue to have less and less opportunity then you did if they were to start from similar means if the disparity continues to grow.

This post was edited on 3/10/25 at 7:18 pm

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Posted by NYNolaguy1

Member since May 2011

21726 posts

Posted on 3/10/25 at 7:42 pm to TigerTalker142

The real issue in the US is the sheer number of boomers who are approaching requirement and don't have enough saved for retirement.

There's going to be a lot of millennials supporting their parents once they run out of cash.

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