A big part of the problem is that too many people want and/or have to live in very tiny portions of the country: major cities.
There is a lot of cheap land and even a lot of cheap houses for those willing to live in a different place. Even many of my friends in Seattle, for example, have discovered that if they move 30-60 minutes away their housing costs plummet dramatically. This has opened the door to many of them moving even farther away, unlocking an entire new world of affordability.
There was a brief moment where all of this looked like it was a very real possibility for many of us, but the rubber band is snapping back with remote work and now many are being required to move back to those few cities again to find the best jobs.
> but promising everyone that if they "work" hard enough, they too can set up their heirs, is pure marketing.
I don't think most people believe that you can just work hard and then have generational wealth for your heirs. That feels like a strawman argument. Generational wealth has always been a difficult feat for the few, not something we promised everyone could achieve.
However, people also underestimate the power of compounding for retirement savings. Obviously not helpful to someone working at McDonalds and trying to pay rent in a big city, but people working average mid-life jobs at average salaries who consistently save $100/month or more can amass significant retirement wealth over 30-40 years. Not "generational wealth" or "setting up your heirs", but enough to make big contributions to education, helping kids with emergencies, possibly leaving some non-trivial inheritance. This happens all the time and continues to happen with millenials, as it will happen with Gen Z. Again, not literally everyone but to suggest that it's out of reach is really out of alignment with the reality of what we see people earning and saving.
> but people working average mid-life jobs at average salaries who consistently save $100/month or more can amass significant retirement wealth over 30-40 years.
You’re off by at least a factor of ten.
40 years of $100/month savings at a generous 5% compounding is $148,242. And that’s in future dollars. Drop it to 4% and you’re down $116,606.
The real formula to consider is what percentage of your monthly spending you are savings. If it’s 100%, then every month worked is one month of retirement. If it’s 50% then two months of working is one month of retirement. If you live frugally and save 400% of your spend, each month counts as four retired months.
It’s a simple fraction with the numerator as your net savings and the denominator your total spending. And lowering the denominator scales things much faster.
No he said 5% 'is in future dollars', i.e. not inflation adjusted to a present value... When in reality the nominal S&P500 returns are 10% leading to the same 'future dollars'. That is conservative.
Plus if 7% real returns (after a 3% inflation) is the historical average, how is 5% real returns generous? That's still conservative even if he meant to claim a 5% real return.
> Even many of my friends in Seattle, for example, have discovered that if they move 30-60 minutes away their housing costs plummet dramatically.
And there are plenty of nice places to live in that radius! I'm in Tacoma which I really like. And Seattle is plenty accessible for shows, events, a night out.
I did what your friends did. After 6y of paying off student loans and saving cash (not even being frugal - enjoying Seattle for sure), we looked at Tacoma and realized "oh we have our pick of wonderful homes here."
There is a lot of cheap land and even a lot of cheap houses for those willing to live in a different place. Even many of my friends in Seattle, for example, have discovered that if they move 30-60 minutes away their housing costs plummet dramatically. This has opened the door to many of them moving even farther away, unlocking an entire new world of affordability.
There was a brief moment where all of this looked like it was a very real possibility for many of us, but the rubber band is snapping back with remote work and now many are being required to move back to those few cities again to find the best jobs.
> but promising everyone that if they "work" hard enough, they too can set up their heirs, is pure marketing.
I don't think most people believe that you can just work hard and then have generational wealth for your heirs. That feels like a strawman argument. Generational wealth has always been a difficult feat for the few, not something we promised everyone could achieve.
However, people also underestimate the power of compounding for retirement savings. Obviously not helpful to someone working at McDonalds and trying to pay rent in a big city, but people working average mid-life jobs at average salaries who consistently save $100/month or more can amass significant retirement wealth over 30-40 years. Not "generational wealth" or "setting up your heirs", but enough to make big contributions to education, helping kids with emergencies, possibly leaving some non-trivial inheritance. This happens all the time and continues to happen with millenials, as it will happen with Gen Z. Again, not literally everyone but to suggest that it's out of reach is really out of alignment with the reality of what we see people earning and saving.