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by whiteandnerdy
2896 days ago
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I think the objection still applies. Suppose the statistical analysis told us that millionaires mostly get where they are by comparatively risky strategies or investments. Does that tell us we should also pursue high-risk high-yield opportunities? It's impossible to know without knowing how many people acted similarly to the successful millionaires but went bust or ended up in jail. On the other hand, a low risk strategy might give you a comfortable life with high probability, but almost certainly won't make you a millionaire. You need to know the base rate to understand whether survivorship bias is a factor or not. |
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If you invest $5k per year and earn a 7% annual return with a mix of stock and bond index funds, you'll be a millionaire in 40 years. If you don't like my 7% number, then invest $16,500 at 2% (short term government bond type rates), and you'll still get there in about 40 years.
For a sufficiently frugal person on an engineer's salary, getting to a >$1 million net worth is easy, but it takes a while. It's worth noting, however, that $1 million isn't a particularly lavish retirement anymore (and will be much more modest in 40 years).
The easiest way to become a millionaire is to have boring financial habits.