[giantg2]

Yeah, but the audience of those financial gurus are the general public. So sure, their advice might work for the top 5%, but the rest of people will never "get rich" using that advice. Even that top 5% could be better off if building passive income, businesses, etc.

[dragontamer]

But the irony is that the generic advice actually applies to the hacker news audience pretty well.

People reaching 100k/year or so single income should be able to save comfortably. And a lot of programmers are on an appropriate career path to get there in a few years

[giantg2]

I wish that were true for me.

But I think you're missing the point. The advice for most people (the target audience of the gurus) is wrong. It's just a coincidence that this article is posted on HN and it would be disingenuous to examine it from only this position/context.

[zhdc1]

> So sure, their advice might work for the top 5%, but the rest of people will never "get rich" using that advice

The median household income in the United States is $79.9K. Assuming that a family of four can live on $50K (including taxes) in - most - locations, which is twice the poverty limit, they can theoretically save $30K a year in a mix of 401K, IRA, and general investment accounts.

This amount, if invested over thirty years with a 7.5% annual return (which is lower than what the S&P has historically returned by a fair amount), would give them a nest-egg of $3M. If they only manage to save half of that amount, they would still have $1.5M by retirement.

Now, this is a very feasible scenario for families in their twenties to late thirties, which is why many of the names mentioned in the article harp on the importance of investing early. It doesn't work nearly as well once you reach that point.

However, the opposite - not saving or investing, and having a large amount of consumer debt - leads to significantly worse outcomes.

[dragonwriter]

> The median household income in the United States is $79.9K.

No, its not, that's the median family income, which only counts groups of two or more people related by birth, marriage, or adoption living in the same home, whereas median family income includes single-member households and those whose members have no family relation, and thus is significantly lower, about $65K.

[zhdc1]

If we want to be pedantic, I was using the median - family - income estimate from HUD, which includes Puerto Rico and extrapolates off of the 2018 ACS. The Census Bureau, which lags by a year or so, puts the figure at $86K.

[giantg2]

"The median household income in the United States is $79.9K. Assuming that a family of four can live on $50K (including taxes) in - most - locations, ... "

I think the main problem here lies in assumption of the distribution over the various locations. $50k+ in Appalachia is good money and you might be able to save $30k out of $80k. One would not be saving and investing in many of the large cities and their suburbs (where more people live).

One thing to note is that the $1.5M-3M is not inflation adjusted and would be worth much less than it is today. It will result in better outcomes, but it won't make people rich, like many claim. $1.5M is just enough to keep a couple out of poverty who will be retiring at 65 years old, 35 years from now. This is especially true if people live longer and the cost of healthcare continues to increase much faster than inflation.

"(which is lower than what the S&P has historically returned by a fair amount)"

The next decade is supposed to be much lower. (Past performance is not an indicator of future returns).

[zhdc1]

> in many of the large cities and their suburbs (where more people live)

A 50K expense target is comfortably doable in most locations (that is, outside of San Francisco, New York City, and VHCOL suburbs). Keep your housing and car expenses reasonable, and cook at home.

> It will result in better outcomes, but it won't make people rich, like many claim.

$3M in investments allows for a ~$150K annual withdraw at retirement in near perpetuity. Add in social security, and the average take home for a dual income family will be at or over $200K a year. With this and assuming no other changes to their expenses, every year, they can 1.) go on 4-5 overseas vacations flying business class, 2.) eat out every night, 3.) purchase a new Mercedes E or S class. This isn't a bad way to live.

> One thing to note is that the $1.5M-3M is not inflation adjusted and would be worth much less than it is today.

$3M today will be worth ~$1.5M thirty years from now, assuming a 2.5% inflation rate. Even if they have only invested $1.5M, the $30K thrown off every year by $750k when, added with social security, still makes for a comfortable retirement.

[giantg2]

Assuming a 2.5% annual inflation rate, that $200k will not be worth as much in 35 years. You would need $475k in 2056 to equal $200k today. $200k in that year is the equivalent of $85k today and after the first 15 years would be the equivalent of $58k. And that will only decrease in value further into retirement. One have to dig into the capital.

"they can 1.) go on 4-5 overseas vacations flying business class, 2.) eat out every night, 3.) purchase a new Mercedes E or S class. This isn't a bad way to live."

I find it hard to believe that people making $85k or $58k today can do these things. I think it will be even tougher with healthcare costs associated with aging.

"still makes for a comfortable retirement."

Yes, I think it would be a comfortable retirement. Where is the claim that it would make one rich? Otherwise where is the argument...

"It will result in better outcomes, but it won't make people rich, like many claim."

You also haven't addressed the $1.5M side of it properly. That $30k you're talking about is only worth $12k. If the income is $100k per year (half the $3M number), that's the equivalent of about $42K per year at retirement and only $29K after the first 15 years. I'm pretty sure money would be tight in any suburb or city on that amount. They certainly aren't rich.