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Or they create an account on an internet forum and role-play rich and successful...that's why I never take advice from an anonymous poster on a forum, my guess is that only about 10% are as perfect as they would like us to believe.
It's really hard to roll play "rich and successful". You'd be detected fairly quickly from all the errors you'd make. I can speak to my 5%er universe. I'd quickly get caught out if I tried to pretend I was a 0.1%er. I don't have the life experience.
We all live somewhere on the economic spectrum. To somebody with a near-minimum wage job struggling to get by, I'm rich. If I lost my job or totaled my car or one of my houses burned down, it would be inconvenient but my world wouldn't end. From my perspective, I'm still a working stiff. Unlike a 1%er, I can't stop working without a dramatic downscaling of my lifestyle. I'm doing what I can to retire in 8 years without having that lifestyle downscale be too dramatic and that's why I poke my nose into retirement forums. I'm refining my plan as I collect more information.
Though perhaps it was inevitable, this thread is becoming a heated exchange between upper-income earners, and everyone else. But we need to realize that even if these upper-income earners become heroic savers, and structure their lives wisely, and don't get jostled and derailed by things like illness or divorce, well, even then, they/we are all thralls of the stock market. If the stock market underperforms, none of us going to do well. Period. I'm not referring to late-90's-style go-go 25% annual rates of return. I'm talking about a more pedestrian 7%.
Look at your accounts' annual performance statements, folks – if you have the stoic fortitude. Don't focus on just one year. Look at 5, 10, 20. Now compare these cumulative returns with what's assumed by retirement planners. Notice a gap? How are you going to cover that gap? One can't save more than 100% of one's annual income.
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Originally Posted by TuborgP
... Well educated, well off and very tuned in to their finances now and down the road. They studied hard, made good career decisions and many transplanted to the DC area to grow their wealth now and down the line by working in a well paying job market with in demand skills.
Without a doubt, this is excellent advice. It's good advice in a recession, or in boom-times; in a globalized world, or one riven by tariffs and barriers. But good as this advice is, even well-compensated professionals can't do it alone. We need the cooperation of the market. And that, unfortunately, is more luck than skill.
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Originally Posted by TuborgP
One of the lessons is that two retirement packages create a world of difference and many younger folks have learned and are applying that as they weigh marriage, life and career.
Another excellent point. Over on the "Relationships" forum, the prevailing wisdom is that marriage is all about attraction, sparks flying, that ineffable joy of mutual appeal. I say instead that marriage is foremost a business-decision. Invest wisely.
I do not see many people in THIS society who are deferring their immediate gratification and sacrificing their entire life. If there were, this thread would not exist.
I see them everyday, maybe you just don't recognize them? The ones who can't do anything because they are saving for retirement, the ones who shop at thrift stores and reuse coffee pods. they are everywhere if you look.
That is because socioeconomically successful people self-segregate. They cluster together in the high cost of living economically vibrant parts of the country and then build those elaborate homes in elite towns with top school systems. If you live in one of those places, you get the false impression that everyone is like you. That isn't the case. Only 6% of tax filers max out their Social Security ($118.5k). If you're not making that kind of money and you don't have a defined benefit pension, you have no shot at creating the wealth to retire comfortably. The median household income in this country is about $50k. You're not maxing out your 401(k) for 30 years on that income. You are living paycheck to paycheck. And half of the country makes less than that.
There are tons of people on this forum that probably made far less than that who have retired comfortably. Two DINKS in a lower cost area at $120k is not unreasonable - they shouldn't have the bills that would require all of that income.
You have a good point on the lower scale of that especially with kids. Median HHI in my hometown is in the mid $30k range and while the town has a lot of retirees, many people are just straight up poor. There's your underclass right there.
The sad reality is that affluent economically and financially savvy folks tend to live and work together. They are also more prone to talking finances and giving thoughts and most importantly listening to the thoughts of others. They feed on each other growing stronger and wiser from each other. Much of what I learned was from others and much I have shared has helped others in real life. Those least financially wise tend to not want to talk and that's ok but they fail to grow and learn and tend to stay behind the eight ball and boom retirement or the want to retire. While the other group is buying a second home and enjoying and loving life. We visited a large planned community over the weekend near the beach and considered consolidating both current houses and moving there. For good reasons, cost not being one we probably won't. Lots of older folks there in expensive homes loving the recreational and fun opportunities. As we were told and expected many from the Mid-Atlantic North.
This is exactly what I was getting to earlier in the thread - like things and people tend to self-sort themselves. People that are making $250k+ a year are not likely to live in a struggling area of town where the people are struggling and making poor decisions. They often talk investment choices and advice with each other. Iron sharpens iron.
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