I mean… $12k really is enough to put a down on a house- depending on where the house is.
But let’s say that between the ages of 20-30 you saved that money over 10 years.
Many people speak on how they can’t afford retirement. Placing that money into a Roth or 401. Using the 401 ad an example, Instead of $1200 a year let’s make it an even $1000 to keep it simple. Assume a 10% return, which outside of very bad market conditions is easily on the low side, after a year your $1000 is $1100, the next year you put in $1000 and that’s $2,100, which at 10% will give $210 making year 3 starting balance $2310. After 10 years that’s $16,801 earned.
That may not seem like a lot, especially when at $1000 a year just putting the cash in a drawer will net you $12,000, but consider:
1. You could potentially save thousands in taxes due to pre tax status of those earnings.
2. If you have other contributions or balances these numbers change quickly.
3. If you have and use employer match it can drastically change.
How much? If you put $1000 a year from 20-30 you’d have the $16k, but if you get a job with matching on JUST the first 2%, then keep doing this from 30-40 you’d have over $60k at forty.
Compare that to the $20,000 you’d save at $1000 a year by just holding onto the money for that same time. That’s nearly 3x the amount! And guess what! It compounds even more with time.
So for example, if you placed your coffee money into the 401k from 20-30 without any match or other contributions, then got a job with 2% match at 30, and put your $1000 a year coffee money AND placed another $1000 a year- at the assumed rates, at 65 years old you’d have over A MILLION DOLLARS.
That is, and should likely still be, more than enough for a down payment on any reasonable house even in 40+ years.
It’s also a not so bad nest egg.
That would come from simply taking that coffee money and saving it, and then just adding another $83 a month. Less than a common phone or internet bill.
So yes, a few dollars a day is a paltry sum over a few years or a decade, and even over a lifetime it isn’t anything impressive- but used wisely such as in the compounding gains of a 401k or in a thoughtful investment, those few dollars can literally make you a millionaire in retirement.
Now the entire old farts blaming kids for not being able to afford a house etc. is ridiculous. Buying a house most places at 20 or 30 isn’t as easy as it was for grandpa.
It isn’t feasible for many. So I agree there and I agree that “lattes and apps” aren’t the major financial hurdle for young people today- the pay is shit, advancement is stagnant across the board and expenses are insane. Inflation the last couple of years alone is enough to wipe out 5,10 years of advancement in earnings for many people even if they did get raises and promotions.
That being said I also want to challenge this “pffft- not spending $6 a day isn’t going to help” attitude. Yes. It can. You were born into when you were born. Post WW2 explosive growth, 80’s excesses and day trading, the “digital revolution,” the “dot com” days- whatever- maybe you missed it. And you weren’t 27 and thinking on the future with a good job 40+ years ago when you could buy a home in many major metro areas on a blue collar wage and gas wasn’t twenty five cents or even a dollar or two a gallon when you were the age to drive.
You missed it because you weren’t born or were a baby. Tough shit. We all missed things that could have benefitted us.
This is the reality you live in. You can change it, it’s worth trying and I’m not saying don’t- but until and if that change ever comes- you live here. Your road is harder to things like home ownership.
You can’t go bad groceries and buy a 3 bedroom in a major population center with your sole income. That’s why I think it’s critical for younger people especially to realize the game and know the rules and how to play. If you say “they were given this and I wasn’t and that’s not fair..” and then just leave it at that- you’ll likely never get it.
Yes, work to make these things more accesible for everyone- but while you do that, consider what you’ll do in the meantime or if that doesn’t happen in your lifetime. No one’s gonna give you the boomer lifestyle on a platter like so many boomers got. You want it, get clever and get serious about getting it.
It’s the way it is and some people have to work twice as hard or more to get the same things as everyone else. We can and should try to change that and I’m not saying don’t complain or that it is wrong to call out the inequity. Do. Call it out. Fight it. But while you do that- if you want this stuff- for yourself, be smart and get to it.
Do not misunderstand. I’m not saying life is hard and live with it.
I’m saying life is hard and you don’t have to live with it if you can change it and make it less hard, but until then you can only live in the world you live in.
Look, they are forgiving student loans.the path appears to be moving towards free education.
There are people with homes and families for the last 10+ years who paid what were still at the time prohibitive costs for a degree to finance those lives.
Had those people waited, they could have gotten the degree for less or maybe free, had less struggle- but then those 10+ years of their lives wouldn’t have benefitted right?
So here’s the line in the sand and the trap as well-
The only way to “win” against the system is to not play.
But if you don’t play, you can’t get the prizes for playing. So you can say fuxk credit and it’s predatory ways of funneling wealth from the less wealthy to the wealthy and acting as socioeconomic segregation- and not take loans or use credit cards. You can say fuxk predatory telecoms and corrupt car companies and bloated monoliths like Amazon and Facebook and such. You can refuse to pay into a 401 and play by the rules and fight them at every turn and not be part of the problem- but the way the system gets people to self subjugate is by offering table scraps.
No credit, some jobs, owning a house, having a certain lifestyle like your peers- these things tend to become harder or impossible to get.
If you’re making $10,000 a year off 401k and investments and such- your bankers and creditors and investment firms are probably making many times that off your money and billions off the combined money of you and everyone else doing the same things to try and get the life you want. To crush those systems doesn’t require armies or marches or press or courts. It just requires enough people to say “no. I will not gain benefit if it means enabling you.”
But let’s say that between the ages of 20-30 you saved that money over 10 years.
Many people speak on how they can’t afford retirement. Placing that money into a Roth or 401. Using the 401 ad an example, Instead of $1200 a year let’s make it an even $1000 to keep it simple. Assume a 10% return, which outside of very bad market conditions is easily on the low side, after a year your $1000 is $1100, the next year you put in $1000 and that’s $2,100, which at 10% will give $210 making year 3 starting balance $2310. After 10 years that’s $16,801 earned.
That may not seem like a lot, especially when at $1000 a year just putting the cash in a drawer will net you $12,000, but consider:
2. If you have other contributions or balances these numbers change quickly.
3. If you have and use employer match it can drastically change.
How much? If you put $1000 a year from 20-30 you’d have the $16k, but if you get a job with matching on JUST the first 2%, then keep doing this from 30-40 you’d have over $60k at forty.
Compare that to the $20,000 you’d save at $1000 a year by just holding onto the money for that same time. That’s nearly 3x the amount! And guess what! It compounds even more with time.
So for example, if you placed your coffee money into the 401k from 20-30 without any match or other contributions, then got a job with 2% match at 30, and put your $1000 a year coffee money AND placed another $1000 a year- at the assumed rates, at 65 years old you’d have over A MILLION DOLLARS.
It’s also a not so bad nest egg.
That would come from simply taking that coffee money and saving it, and then just adding another $83 a month. Less than a common phone or internet bill.
So yes, a few dollars a day is a paltry sum over a few years or a decade, and even over a lifetime it isn’t anything impressive- but used wisely such as in the compounding gains of a 401k or in a thoughtful investment, those few dollars can literally make you a millionaire in retirement.
It isn’t feasible for many. So I agree there and I agree that “lattes and apps” aren’t the major financial hurdle for young people today- the pay is shit, advancement is stagnant across the board and expenses are insane. Inflation the last couple of years alone is enough to wipe out 5,10 years of advancement in earnings for many people even if they did get raises and promotions.
You missed it because you weren’t born or were a baby. Tough shit. We all missed things that could have benefitted us.
You can’t go bad groceries and buy a 3 bedroom in a major population center with your sole income. That’s why I think it’s critical for younger people especially to realize the game and know the rules and how to play. If you say “they were given this and I wasn’t and that’s not fair..” and then just leave it at that- you’ll likely never get it.
Yes, work to make these things more accesible for everyone- but while you do that, consider what you’ll do in the meantime or if that doesn’t happen in your lifetime. No one’s gonna give you the boomer lifestyle on a platter like so many boomers got. You want it, get clever and get serious about getting it.
I’m saying life is hard and you don’t have to live with it if you can change it and make it less hard, but until then you can only live in the world you live in.
Look, they are forgiving student loans.the path appears to be moving towards free education.
There are people with homes and families for the last 10+ years who paid what were still at the time prohibitive costs for a degree to finance those lives.
Had those people waited, they could have gotten the degree for less or maybe free, had less struggle- but then those 10+ years of their lives wouldn’t have benefitted right?
The only way to “win” against the system is to not play.
But if you don’t play, you can’t get the prizes for playing. So you can say fuxk credit and it’s predatory ways of funneling wealth from the less wealthy to the wealthy and acting as socioeconomic segregation- and not take loans or use credit cards. You can say fuxk predatory telecoms and corrupt car companies and bloated monoliths like Amazon and Facebook and such. You can refuse to pay into a 401 and play by the rules and fight them at every turn and not be part of the problem- but the way the system gets people to self subjugate is by offering table scraps.
No credit, some jobs, owning a house, having a certain lifestyle like your peers- these things tend to become harder or impossible to get.