It's not sad, it's smart.
You would lose that bet. People who are spending money and enjoying their 20s are living life much differently than those who are saving are working all the time.
You probably should move that money into something that actually makes you money unlike a bank.
Index funds. You don't have to know anything. Unless the market totally tanks for decades you will make money then emergency money in some type of money market account that at least you get more interest than a bank. If you stacked 100K you did something right.
Does this work if your salary scales dramatically? I guess you should be able to save more accordingly but hard to say you should be able to ramp from 2 to 3 in 5 years if half that time is spent at a lower level, for example. Maybe it doesn't matter...It has been fidelity's guidance for years. I wonder why it is blowing up now?
The U.S. has largely shifted from defined benefit plans (you get x% of your salary for the rest of your life) to defined contribution plans (where you get a portion of whatever you've saved in a tax advantaged manner over your working career). The shift has its pros and cons. The burden and risk of saving has shifted entirely from the employer to the employee, for one. That's the biggest con and probably the biggest deal overall. No longer can you take care of yourself just for working at one company all your life. On the other hand, people are more mobile now and move around a lot; 401K plans (which is the name of the employer sponsored tax advantaged saving plan) are mobile and can "go with you" in one form or another.
Ya. I learned the hard way. My brothers and sisters yelled at me for not starting earlier and I thought I needed the money because I finally moved out and whatnot. You realize you can't get back years and just throw in extra money to get back what you could have made. My 401K at my job saved me. There is zero chance I could ever remotely stack the money I have so far.
Not trying to be snarky, but as someone who spent too long on the step of "yeah, sounds good, I should figure out how to do that", the common index fund recommendation is nice but also not the confusing part at all. I've still yet to find a guide that actually explains how the fuck to do it. It's one thing to say "open a vanguard account and put money in things", but nobody seems to answer the follow up question of "and exactly how do I do so without running afoul of tax law in the process?"
This is an odd graphic since you wouldn't expect it to be linear. Going from 7x to 8x should basically take three years of market returns. So you do better than that between 55 and 60 without saving anything additional.It has been fidelity's guidance for years. I wonder why it is blowing up now?
A new car loan is another one of the biggest debt rip offs out there. But people just gotta have their toys. People think a car is an asset, but just driving off the lot sees thousands of dollars disappear. A car is a liability, not an asset.
