That’s pretty privileged of you to say $7,000 is not a big outcome.

To a lot of folks it is. That’s half a down payment for a house in a lot of the US.

Plus the OTHER 32k they have saved. Over 30 years that is an extra 50,000.

You could save it for 15 and have 37k (7k interest)after 15 years. Or 0. You could save it for 30 and have 126k (54k interest) after 30 years. Or 0.

$56k of earnings in exchange for freezing $70,000 of your income for 30 years? That seems insane if I'm honest.

If it were FU levels of money, or even 100%+ returns, I might think differently. But I can't imagine someone locking away $70k of their earnings for 30 years for only a 70% return.

To be fair, $7000 in 15 years probably won't get you the house downpayment but... you're right on the privileged part.

I imagine that people actually seeing some progress over time may encourage them to save/contribute a bit more, or to put some money in to somewhat larger CDs or whatnot (even excluding stock stuff). Or... they may be encouraged to contribute a small bit to a 401k if they end up at a job that offers it.

You may $40k/year - having, say, $3k in savings can really change your outlook and susceptibility to otherwise crippling 'emergencies'.

As a return for tying up 5% of your income (which is hard to do when you're working with a household budget of ~$625 a week) for 15 years? Yes, that is a tiny outcome. It's especially tiny when you consider that a static 3% APR is absurdly unrealistic.

You could use that same 5% and have a full down payment four years sooner.