Re:We need to rethink employee compensation
by icedchai on Wednesday June 24, 2015 @04:34PM
(#9774290)
Not exactly true. You can get pretty rich in ~15 years if you save and invest a good percentage. The average American consumer is incapable of doing this, of course. Why save when you can spend, spend, spend?
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Re:We need to rethink employee compensation
by aetherson on Wednesday June 24, 2015 @05:45PM
(#9774706)
Let's say that you get paid $100k for 5 years, then $150k for 5 years, and then $200k for 5 years. Nominal. So you take home $80k, $120k, $150k.
You invest half of your take-home salary, so $40k, $60k, $75k.
You invest everything at 4% real return.
That about $1 million after those fifteen years.
It's....... pretty rich, sure. It's also a LOT of savings. I'd say it's possible to get rich on salary if your salary gets high early and fast, or by the time you retire, maybe less so in fifteen years.
But, if you're able to stick to the plan you outlined you're probably living on $40k the entire time, which means you can live the rest of your life on that $1 million, due to the assumed 4% real return and 4% withdraw.