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by AFNobody 2970 days ago
http://awealthofcommonsense.com/2014/02/worlds-worst-market-...

Even with bad market timing, you still have pretty good odds if you are genuinely dedicated to the task. Keep in mind, to succeed in ~20 years in almost all market conditions you would need to save 50-60% of your before-tax income.

1 comments

MMM has done a blog post covering the issue of how long it takes to save for early [or not] retirement at a spread of savings rates.

https://www.mrmoneymustache.com/2012/01/13/the-shockingly-si...

Under his assumptions, to retire in 20 years takes a savings rate of around 44%.

His math is a little optimistic when we are talking about "almost all market conditions" and once you start factoring in things that might go wrong, like a couple years of unemployment stretched over a 20 year career.

MMM ignores a ton of statistically common problems (like 4 bouts of unemployment over 20 years).

All models are wrong, but some models are useful.
If it is obvious predictable stuff, like being unemployed that almost everyone experiences eventually it isn't useful.
"[A] couple years of unemployment stretched over a 20 year career" seems to be an extreme outlier for the tech field.

I worked through the 2000 and 2008 crashes and I can't think of anyone I worked with in tech who was involuntarily unemployed for more than a few weeks at a time and certainly not for 10% of the total time. (Voluntarily for personal reasons like they decided to stay home with a kid, sure.)

Yes, years or 10%+ of unemployment would derail retirement savings. A few weeks here and there doesn't.

So now we are going from the general case to the Bay area tech crowd?

I think you live in a bubble, honestly. Get out of it and realize how most people live.