6.25% is 20.6M people. And again, when you look at the top 10%, that number isn't too far off. It was my highball number to give room to be honest, and I'd rather cap it at $1.5M net worth. That get us closer to 10%?
If you simply put your savings into index funds your money will grow on average 10% year over year, which is more than eno…
6.25% is 20.6M people. And again, when you look at the top 10%, that number isn't too far off. It was my highball number to give room to be honest, and I'd rather cap it at $1.5M net worth. That get us closer to 10%?
If you simply put your savings into index funds your money will grow on average 10% year over year, which is more than enough to beat inflation. Index funds also have an insanely low managing fee because they are automated, so you're not chopping off 0.9% for the fund manager who probably doesn't even beat the market. If your job matches up to 5% put away 7-10% of your pay check into their 401k and then take whatever else you can put into short term savings plus some money for index funds each money. Between that and making sure you get into home ownership as early as possible, and hopefully you buy somewhere smart, people would live comfortably without going overboard. Do that, don't drive a ridiculous car, and don't live for excess and you'll probably be fine. People who need more than $1.5M for they household these days are living in excess. If they didn't, the cost of living would be a lot more affordable. Sprinkle that 10% of Americans (some 33M people) across every major metro in the country and ask yourself what it does to the cost of living for everyone else. There's a reason the most expensive coastal cities are bleeding middle class residents into other states, and part of that is because of the cost of living going up do to the most decadent households in said cities.
The point is the rest of society, that is 90- 93.75%, by your standard, are not the decadent rich.
Yes, of course, the best plan is to put your savings in a broad index fund, such as SP500. Avoid the boutique "index" funds that have sprung up. And yes historically if you simply leave it it alone, your savings should average 10%. However, even if you do all that individual results vary. If your working life happened to comprise the years from say 1968-2008, and you were invested in a broad market fund the whole time, your growth for the whole period was 11% or 0.3% year over year. I dealt with a large crowd of dismayed retirees in 2008 who (perhaps ill-advisedly in an effort to stem the bleeding) cashed in their broad market funds, and found they still had to pay tax--the deferred income tax on the principal and capital gains tax on that 11% gain.
You never know what segment of the full historical time frame your experience will fall in. That segment may be very different from the historical statistics. Furthermore, many economists say future yields have already been dragged in the present and may well depress historical yields for some time. Since 1965, homeownership rates have averaged only 66%. The "same as rent" part (property tax, insurance, utilities, maintenance) you pay even if you own your typical 3/2 house free and clear increases every year, and is roughly tracks comparably to average rent for a one-bedroom apartment.
You make a number of assumptions that can basically be summarized as if all the stars align, a $1.5million net worth at retirement might suffice. Contingency planning calls for making sure there is a cushion in case all the stars do not align. If all you have in $1.5million after a working life of 40 years, you don't have that much a certainly not enough to spend your retirement years living "decadently." However, admittedly you are likely to be better off than most Americans.
The expensive coastal cities are not bleeding middle class residents to other states. The vast majority move to another community in the same state. The poster child, California, had 83,000 net of exits and entrants, or just 0.2% of California's population. You are making a claim you have not supported about the so called decadence of the rich. Being in the upper 10% in net worth does not necessarily make a household decadent according to the usual definition of decadent, not Douthat's idiosyncratic definition.
In fact, the usual definition of decadence would include smoking weed, and what you characterized as free sex. Money definitely makes a decadent lifestyle easier to afford, that's all. It does not mean that having money equals living a decadent lifestyle.
6.25% is 20.6M people. And again, when you look at the top 10%, that number isn't too far off. It was my highball number to give room to be honest, and I'd rather cap it at $1.5M net worth. That get us closer to 10%?
If you simply put your savings into index funds your money will grow on average 10% year over year, which is more than enough to beat inflation. Index funds also have an insanely low managing fee because they are automated, so you're not chopping off 0.9% for the fund manager who probably doesn't even beat the market. If your job matches up to 5% put away 7-10% of your pay check into their 401k and then take whatever else you can put into short term savings plus some money for index funds each money. Between that and making sure you get into home ownership as early as possible, and hopefully you buy somewhere smart, people would live comfortably without going overboard. Do that, don't drive a ridiculous car, and don't live for excess and you'll probably be fine. People who need more than $1.5M for they household these days are living in excess. If they didn't, the cost of living would be a lot more affordable. Sprinkle that 10% of Americans (some 33M people) across every major metro in the country and ask yourself what it does to the cost of living for everyone else. There's a reason the most expensive coastal cities are bleeding middle class residents into other states, and part of that is because of the cost of living going up do to the most decadent households in said cities.
The point is the rest of society, that is 90- 93.75%, by your standard, are not the decadent rich.
Yes, of course, the best plan is to put your savings in a broad index fund, such as SP500. Avoid the boutique "index" funds that have sprung up. And yes historically if you simply leave it it alone, your savings should average 10%. However, even if you do all that individual results vary. If your working life happened to comprise the years from say 1968-2008, and you were invested in a broad market fund the whole time, your growth for the whole period was 11% or 0.3% year over year. I dealt with a large crowd of dismayed retirees in 2008 who (perhaps ill-advisedly in an effort to stem the bleeding) cashed in their broad market funds, and found they still had to pay tax--the deferred income tax on the principal and capital gains tax on that 11% gain.
You never know what segment of the full historical time frame your experience will fall in. That segment may be very different from the historical statistics. Furthermore, many economists say future yields have already been dragged in the present and may well depress historical yields for some time. Since 1965, homeownership rates have averaged only 66%. The "same as rent" part (property tax, insurance, utilities, maintenance) you pay even if you own your typical 3/2 house free and clear increases every year, and is roughly tracks comparably to average rent for a one-bedroom apartment.
You make a number of assumptions that can basically be summarized as if all the stars align, a $1.5million net worth at retirement might suffice. Contingency planning calls for making sure there is a cushion in case all the stars do not align. If all you have in $1.5million after a working life of 40 years, you don't have that much a certainly not enough to spend your retirement years living "decadently." However, admittedly you are likely to be better off than most Americans.
The expensive coastal cities are not bleeding middle class residents to other states. The vast majority move to another community in the same state. The poster child, California, had 83,000 net of exits and entrants, or just 0.2% of California's population. You are making a claim you have not supported about the so called decadence of the rich. Being in the upper 10% in net worth does not necessarily make a household decadent according to the usual definition of decadent, not Douthat's idiosyncratic definition.
In fact, the usual definition of decadence would include smoking weed, and what you characterized as free sex. Money definitely makes a decadent lifestyle easier to afford, that's all. It does not mean that having money equals living a decadent lifestyle.