[ryandrake]

There is no straightforward risk-less formula, unfortunately. You can follow all the textbook advice, have a budget, max your 401k, pay down your debt, buy a house, blah blah blah, and after 20 years still only have 1x or 1.5x your salary in total savings [ask me how I know] due to bad luck, unfortunate market timing, lack of skill in investing, emergencies, etc. I hate all this simplified, incomplete advice. If successfully saving for retirement was so straightforward and deterministic, there wouldn’t be an entire industry, with consultants and books, built up around trying to help people hopelessly navigate it.

[Veelox]

If you start at 25, saving 10% of your salary into a 401k and never get divorced, spend <30% of your gross income on housing, and don't borrow to spend more than you make 90% of the time you will come out alright.

> If successfully saving for retirement was so straightforward and deterministic, there wouldn’t be an entire industry, with consultants and books, built up around trying to help people hopelessly navigate it.

There is a full industry. Saving money (for people with incomes above the median), like losing weight is simple. Yet there are still fat people and broke people.

[cryoshon]

>saving 10% of your salary

impossible for most people

>spend <30% of your gross income on housing

impossible for many (most?) places with jobs

>don't borrow to spend more than you make 90% of the time

this factor is indeed entirely up to individuals and a perpetual point of failure... but refusing to borrow and cutting minor expenses is not a road to any kind of wealth for most people. it's a road to retiring poor. most people are on that road.

[Veelox]

> >saving 10% of your salary

>impossible for most people

Part of me is tempted to look up statistics to make the point but if you are making more than 150% of the poverty line in the US, you can save 10% of your income, it is a choice not to.

> >spend <30% of your gross income on housing

>impossible for many (most?) places with jobs

It all depends on where you are willing to live. Also, if you move to somewhere to get a job, before you accept the offer you should check to see if it is possible to move there and follow this guideline. If you, you shouldn't move there because you will become worse off.

> refusing to borrow and cutting minor expenses is not a road to any kind of wealth for most people. it's a road to retiring poor. most people are on that road.

Depends on what you count as minor expenses. If I cut out $100 a month of expenses starting at age 25, and put that in an index fund that grows at 8% until I retire at 67 it will be worth $412,077.88. If I want to retire a millionaire I need to save just under $250/month, which is 10% of a 30k a year job. At $30k I am a little sympathetic if you cannot save $250/month. If you are making $50k, it is a matter of choice.

[cryoshon]

>if you move to somewhere to get a job

you're out of touch. this is not even the same type of job that the majority of people have access to. people's standard of living is far beneath what you suspect.

>If you are making $50k, it is a matter of choice.

try having a mortgage or high rent, a medical problem, kids, parents who need care, a car, student loans, clothing that aren't tatters, an emergency fund.... and all that comes before even baseline (necessary) entertainment / low-luxuries like internet access and padded chairs.

it isn't a matter of choice for most people. nevermind that 412k isn't enough to retire on if you have any of those burdens above. sure, they could spend $20 a week less on beer. but why would they?

[Veelox]

>mortgage or high rent

Find a cheaper place to live.

>a medical problem

This is the one I have the most sympathy for, US healthcare is broken, people shouldn't have to go bankrupt to pay for life saving care.

>kids

1) Wait until you can support them until you have them. 2) Just because you spend a lot of money does not mean you will raise better children. Americans as a whole seem to think otherwise.

> parents who need care

Again, I am sympathetic but this doesn't apply to everyone, or even the majority of people.

> a car

You can find a reliable used car for ~10k often times much less than that. Getting a ~20k or worse a ~40k car every 3 years is a waste.

> student loans

On one hand, people were given really bad advice on college. On the other hand, people took really bad advice. High school need to be better informed about the long term cost of college.

> clothing that aren't tatters

Goodwill, Ross, discount stores all great places to get non-tattered clothing.

> an emergency fund

If you are disciplined enough to build an emergency fund, after it is funded, keep being disciplined and start saving for retirement.

[poulsbohemian]

Amen! I read The Millionaire Next Door when I was 22. Bought a house in a low-cost but appreciating neighborhood. Started working with an accredited financial advisor. Saved double-digit percentages of my income. Worked hard, made a six-figure income.

At forty? Here I am tens of thousands in debt, all that hard work gone. I did all the things society told me to do if I wanted to live the good life, but life can come at you in unexpected ways. For some people it is poor health, others a crazy ex and a truly unfair divorce. Businesses succeed, but sometimes they also fail.

Much like the founding story myth discussion here on HN, we might do well to hear some stories of personal financial failure as vehicles for learning.

[jbdubwub]

What happened? I'm always interested in the stories where things didn't work. People don't hear those.

[BeetleB]

>You can follow all the textbook advice, have a budget, max your 401k, pay down your debt, buy a house, blah blah blah, and after 20 years still only have 1x or 1.5x your salary in total savings [ask me how I know] due to bad luck, unfortunate market timing, lack of skill in investing, emergencies, etc. I hate all this simplified, incomplete advice. If successfully saving for retirement was so straightforward and deterministic, there wouldn’t be an entire industry, with consultants and books, built up around trying to help people hopelessly navigate it.

You can follow all the textbook advice, study hard, fill in your applications on time, get good grades in college, and once you graduate you could still not have a job for years due to bad luck, unfortunate economic conditions, lack of skill in picking your major, emergencies, etc.

What should I conclude about all the advice on studying?

[sf_rob]

I completely agree that these things are oversimplified and people don't discuss luck enough. However, if you're able to isolate your retirement savings from the rest of your life (which is a big if which doesn't apply to many people!), things aren't so bad on a long timeline. Here are two data points that I find quite compelling. The first is about a theoretical person who saves money in cash between market run-ups and only invests at market peaks (spoiler, they end up with much more than they invested). The second just points out that the S&P 500 has never had a nominal 30 year streak with less than ~8% annual growth (which is not to say it couldn't).

http://awealthofcommonsense.com/2014/02/worlds-worst-market-... http://www.businessinsider.com/30-year-sp-500-returns-impres...