[hello_1234]

You are completely discounting the power of compounding. Saving every penny won't make you rich in a year or even in 10 years. But think about 20 years in the future. Think about retirement. Every extra dollar that you put into your 401K will make a meaningful difference on how you retire in 20-40 years. Here's one real example for you: 96-Year-Old Secretary Quietly Amasses Fortune, Then Donates $8.2 Million - https://www.nytimes.com/2018/05/06/nyregion/secretary-fortun...

[yellowstuff]

Yes, it's a really good idea to live within your means and start saving early for retirement. No, most people who are young today will not be able to save anything like $8M doing that. Some things that are exceptional about the woman in this story:

* She worked 67 years at the same job.

* She invested in individual stocks, mostly during a period when index funds weren't available. This lack of diversification is almost unanimously not recommended for regular people because the vast majority of people who try it dramatically underperform index funds. But if enough people do it someone will dramatically outperform and you'll read about them in the paper.

* It sounds like she lived more frugally than most people would find tolerable.

* She lived in a rent controlled apartment, meaning her rent was probably closer to free than to market rates for much of her life. Needless to say, this subsidy isn't available to young people today.

* Presumably she avoided major illness or other setbacks during her long working life.

* It's also possible that she had an inheritance or some other significant source of income besides her salary.

$1M or $2M in inflation-adjusted savings is probably a realistic goal for a middle class American to have for retirement after a long career and prudent investing. $8M is not.

[thatfrenchguy]

> * She invested in individual stocks, mostly during a period when index funds weren't available. This lack of diversification is almost unanimously not recommended for regular people because the vast majority of people who try it dramatically underperform index funds. But if enough people do it someone will dramatically outperform and you'll read about them in the paper.

Sampling biais: there's no going to be any article on the people who lost all their money doing this

[blaser-waffle]

Aside from working the same job for decades, it wasn't just any job; she wasn't a secretary at a dentist's office:

> In 1947, she joined Cleary Gottlieb Steen & Hamilton, a Wall Street law firm, where she worked as a legal secretary for 67 years and observed the investment strategies of the lawyers.

> “She was a secretary in an era when they ran their boss’ lives, including their personal investments,” Lockshin tells the Times. “So when the boss would buy a stock, she would make the purchase for him, and then buy the same stock for herself, but in a smaller amount because she was on a secretary’s salary.”

So she was likely a reasonably well paid secretary at a wall street legal firm that would have access to the best financial advice available.

Also, as far as I can tell from the article, she was married but didn't have any kids.

[shantly]

> Also, as far as I can tell from the article, she was married but didn't have any kids.

That's huge. Kids are expensive (and the risk they expose you to, economically, is truly enormous) and that money tends to come out at the younger end of one's years, and when you're earning less, just to compound the pain (and maximize the opportunity cost).

[pathseeker]

>* It sounds like she lived more frugally than most people would find tolerable.

Sounds like an issue with most people.

>* She lived in a rent controlled apartment, meaning her rent was probably closer to free than to market rates for much of her life. Needless to say, this subsidy isn't available to young people today.

The subsidy is available via home purchase. Fixed-rate mortgage payments don't increase over time.

[knightofmars]

Property taxes do.

[blaser-waffle]

So does property value. Occasionally one, or both, of those goes down, too.

[rootusrootus]

> $1M or $2M in inflation-adjusted savings is probably a realistic goal for a middle class American to have for retirement after a long career and prudent investing.

I wonder what fraction of the population reaches $1M in retirement fund by the time they retire. If 401(k) median balances by age are at all accurate, then the answer seems to be "very few."