>>Do you really think that someone making minimum wage is able to save 25x their income?
To be clear, I said: "Saving 25x your _annual expenses_ is something anyone (even someone making minimum wage) can do". And yes, they can. But they need to keep their annual expenses less than their income.
>>Do you think those same people are buying "iPhone 10+++" and "fancy vacations"?
Some minimum wage earners are, yes. Rather than saving for the future, they are buying the latest iPhone, a new car or $200 shoes with an athlete's name on them.
>>Doing some basic math assuming $8/hr minimum wage at 40hr/wk with no vacation: $16,640/yr
>>Your assumption then is that someone can live off of $665 a year?
Your math is incorrect. Using your wage numbers and ignoring inflation, if that person saved $800/yr invested at 4% annual return, they would have $411,000 in 25 years. That's 25.9x of their annual living expenses of $15,840. ($16,640 - 800 = $15,840. $411,000/$15,840 = 25.9)
If they started saving at age 20, they would have 25x their expenses at age 45.
Yes, I'm over-simplifying because I'm not counting inflation which would decrease the value of their savings over time. But that would be offset to some extent by rising wages. The federal minimum wage has more than doubled in the last 25 years (from $3.80 to $7.25).
Also, my assumed rate of a 4% annual return is low. A small investor should have no trouble averaging 8-10% return over long periods with reasonable risk.
>>It's hard to even survive on minimum wage let alone save anything.
Yes, it is hard. We are a society of consumers that wants immediate gratification. Saving means delaying that gratification in favor of a bigger benefit at some point in the future.
To be clear, I said: "Saving 25x your _annual expenses_ is something anyone (even someone making minimum wage) can do". And yes, they can. But they need to keep their annual expenses less than their income.
>>Do you think those same people are buying "iPhone 10+++" and "fancy vacations"?
Some minimum wage earners are, yes. Rather than saving for the future, they are buying the latest iPhone, a new car or $200 shoes with an athlete's name on them.
>>Doing some basic math assuming $8/hr minimum wage at 40hr/wk with no vacation: $16,640/yr
>>Your assumption then is that someone can live off of $665 a year?
Your math is incorrect. Using your wage numbers and ignoring inflation, if that person saved $800/yr invested at 4% annual return, they would have $411,000 in 25 years. That's 25.9x of their annual living expenses of $15,840. ($16,640 - 800 = $15,840. $411,000/$15,840 = 25.9)
If they started saving at age 20, they would have 25x their expenses at age 45.
Yes, I'm over-simplifying because I'm not counting inflation which would decrease the value of their savings over time. But that would be offset to some extent by rising wages. The federal minimum wage has more than doubled in the last 25 years (from $3.80 to $7.25).
Also, my assumed rate of a 4% annual return is low. A small investor should have no trouble averaging 8-10% return over long periods with reasonable risk.
>>It's hard to even survive on minimum wage let alone save anything.
Yes, it is hard. We are a society of consumers that wants immediate gratification. Saving means delaying that gratification in favor of a bigger benefit at some point in the future.