106
What's the best advice you've ever received?
(sh.itjust.works)
you are viewing a single comment's thread
view the rest of the comments
view the rest of the comments
this post was submitted on 27 Apr 2024
106 points (95.7% liked)
Asklemmy
43728 readers
1699 users here now
A loosely moderated place to ask open-ended questions
If your post meets the following criteria, it's welcome here!
- Open-ended question
- Not offensive: at this point, we do not have the bandwidth to moderate overtly political discussions. Assume best intent and be excellent to each other.
- Not regarding using or support for Lemmy: context, see the list of support communities and tools for finding communities below
- Not ad nauseam inducing: please make sure it is a question that would be new to most members
- An actual topic of discussion
Looking for support?
Looking for a community?
- Lemmyverse: community search
- sub.rehab: maps old subreddits to fediverse options, marks official as such
- !lemmy411@lemmy.ca: a community for finding communities
~Icon~ ~by~ ~@Double_A@discuss.tchncs.de~
founded 5 years ago
MODERATORS
The best I ever received? Start saving and investing when you’re young to benefit from compound interest over time. I didn’t take the advice, but I received it!
Did you have money to invest when you were young enough for the advice to matter?
If you worked for $8/hr and took 5% of your income and put it towards retirement (I know 5% is a lot when you're broke) from age 18-67 assuming you got a 2% raise every year, you could retire with ~$385,000 in the bank and it would last you until you were 79. That's using the default numbers from Bankrate. If you could bump your savings rate up to 15% using those same numbers (which is admittedly unrealistic) you would be a millionaire at retirement. The moral of the story is start early and be consistent.
If you're making $8/hr, your head is going to be incredibly deep underwater. 5% is not remotely possible at that wage. At 15% you may as well be living in fantasyland.
Most people wouldn't remain at $8/hr their whole life, you would likely earn more as you gained training and experience. My point was that at the extreme low of full time wages, your savings rate at an early age helps determine where you would end up. It's doable especially at hire wages.
When I was making that kind of money, I still saved way more than 5%. Granted, after inflation, it is like $11.50 now. Still, 10% would have been pretty easy. 20% would be possible if I didn't blow money on things like spend $3K on a bike for hobby use. Also, that's assuming you don't have unexpected expenses. I lived somewhere where having a car wasn't necessary, so that made a huge different in budgeting. And when I needed surgery, I was lucky with insurance. Otherwise, that could have easily have eaten up the savings I had.
So 15% is definitely possible... with lots of luck and good circumstances.
The fucked up thing about plain money is that even if you have a million today, that million will be worth less than half when you retire, due to inflation and nrtions that keep printing more money to cover their expenses.
People with money usually don't keep it as plain money though. On average, if you just invest it in S&P500 (assuming historical returns), it'll be worth at least 4 million after adjusting for inflation after 30 years. 3 million dollars reward for having 1 million dollars. But even if you're like a gold-standard fanatic and just put it in gold, the same applies.
Which is why the second part is to invest it.
I'm not going to point out the ridiculous problem with this, since you already did before bowling over it. I'm just gonna disengage.
Saving and investing is also way easier if you don't give yourself the option to not do it. You won't manually move 10% of your money each month, but if it goes to a 401k or a separate account automatically it's far more likely to stay there.