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Originally posted by jerZ07002 my revised number of 9300+ over 40 years at 4.5% is 100% accurate (my first one was inaccurate because i used monthly compounding instead of annual RR). disregard anything else, i am pretty good with financial calculations.

Edit: I had to go back and read. Your calculation is correct (though I'd say it would be more accurate to use monthly numbers since contributions are likely monthly and interest is generally credited on a monthly basis). This is not easy, but not impossible. 4.5% is a lousy rate of return and nobody said saving a million bucks was easy.

Using an 8% rate of return, that annual contribution goes to $3860/year or $321/month.

Using my assumption of an 8% rate on a MONTHLY basis (0.66667%/month, 40 years or 480 months), the monthly contribution would go down to $286/month.

Fwiw, a $100 monthly contribution for 40 years at 15% interest gets you over the $1M mark, though that assumption is a bit aggressive for my blood.

Last edited by Shakka on May-30-2008 at 00:00

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Originally posted by Shakka Edit: I had to go back and read. Your calculation is correct (though I'd say it would be more accurate to use monthly numbers since contributions are likely monthly and interest is generally credited on a monthly basis). This is not easy, but not impossible. 4.5% is a lousy rate of return and nobody said saving a million bucks was easy. Using an 8% rate of return, that annual contribution goes to $3860/year or $321/month. Using my assumption of an 8% rate on a MONTHLY basis (0.66667%/month, 40 years or 480 months), the monthly contribution would go down to $286/month. Fwiw, a $100 monthly contribution for 40 years at 15% interest gets you over the $1M mark, though that assumption is a bit aggressive for my blood.

i used 4.5% because it is a guarantee - plus you can get that inflation indexed. i had to double take about the monthly contributions, you are right. using monthly contribution is correct.

BTW. you also have to consider a 2-3% yearly rate of inflation. In reality, to have the equivalent of $1 million in today's dollars forty years from now, you would need to invest about 9K a month for forty years at a rate of 6.5% - 7.5%. - 1 million dollars 40 years from now will be worth the equivalent of $452K (using the 2% inflation rate - which is modest).

Last edited by jerZ07002 on May-30-2008 at 01:00

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Originally posted by Q5echo wow, way to support your man in a simple intelligent discussion. if you had half a brain, or at least one testicle, you could have done so much better...fail

the day your average post reaches more than one sentence of original text is the day i consider your thoughts about how to conduct myself in pdd

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Originally posted by Shakka The long term average return of the S&P 500 is over 10%, though I think that is also a bit aggressive as it captured the anomalous period of astronomic growth in the 1990's. I'd say 7-8% is probably a fair long-term assumption to use.

you are correct about the 7-8 percent. actually, over the past 40 years, the S&P has an average annual return of 7%. The S&P hit 100 on June 4, 1968, and today it closed at 1398.

Last edited by jerZ07002 on May-30-2008 at 14:13

Altho I'm no economic expert (altho I did study it for a year at university there's a reason I dropped out!) I've noticed a slight problem in the arguments we are having about the likelihood of somebody becoming a millionaire (not to mention that your definition of a millionaire is somebody with $1,000,000 and mine is somebody with $2,000,000 so our attitudes my be somewhat different)...

The whole point of this thread is that some git at the Cato Institute is saying sod your fellow man, enjoy your own life and do what you want without having to spend you money on other people. The capitalists are arguing that this is good as it is essentially entrepreneurial which is good for society as a whole. Yet your arguments that say how many people can become millionaires hinge around having to scrimp and save your whole life so you have $1,000,000 when your 67 (giving you around 5 years of happiness!). Surely the point is that these people also have a very very good life, not just when they hit 67?

I therefore don't think your arguments can work only if you can amass $1,000,000 at retirement, it must be in your prime of life for the argument to stand. I would therefore say that whatever wage you are suggesting can earn someone $1,000,000 at retirement by having no life, needs to be adjusted upwards by enough to allow that person to have a very good life as well as being able to become a millionaire...

Who says you need to have a million dollars to retire comfortably anyway? I'd be perfectly happy with 500-600k, and that amount is doable even for someone who starts investing in their mid 30's. Don't forget we still get social security at 62. That should be enough to provide for all basic needs (food, clothing, shelter). Anything else you've saved beyond that is just a bonus that lets you afford some luxury and extra vacations during your golden years.

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Originally posted by George Smiley

i think what the "capitalists" in this thread are demonstrating is the relative ease one can amass X amount of money by a certain time using a fraction of your income during your productive years. all within the great capitalist construct accessible to just about anybody. the idea is great, no?

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Originally posted by Capitalizt Don't forget we still get social security at 62.

i don't know, will we?

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Originally posted by Q5echo i think what the "capitalists" in this thread are demonstrating is the relative ease one can amass X amount of money by a certain time using a fraction of your income during your productive years. all within the great capitalist construct accessible to just about anybody. the idea is great, no?

Er no I think we've demonstrated it is possible for a privileged few to amass that amount if they give up having a life until they are retired...

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Originally posted by Capitalizt Who says you need to have a million dollars to retire comfortably anyway? I'd be perfectly happy with 500-600k, and that amount is doable even for someone who starts investing in their mid 30's. Don't forget we still get social security at 62. That should be enough to provide for all basic needs (food, clothing, shelter). Anything else you've saved beyond that is just a bonus that lets you afford some luxury and extra vacations during your golden years.

You don't need a million dollars! But if you had your way you wouldn't be getting any social security either...

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Originally posted by George Smiley (not to mention that your definition of a millionaire is somebody with $1,000,000 and mine is somebody with $2,000,000 so our attitudes my be somewhat different)...

George, you originally posed the question:

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Can you give me the wage that you'd need to be earning to be able to save $1m by the time you retire? Or tell me how much a person would need to save each month and add their other outgoings on top of that?

If you really meant $2M then you should've been more specific. However, the examples that several of us gave were quite demonstrative of the power of saving and investing in one's future.

The counter-point to your question would be, in your socialist world, how would a person attain the same amount of savings (And please don't tell me it is the government's job to make sure everyone can retire a millionaire because I've yet to ever see a socialist society where that is anywhere close to the case. Only the political elite seem to achieve that in the socialist world. Every one else is confined to varying levels of mediocrity.)

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The whole point of this thread is that some git at the Cato Institute is saying sod your fellow man, enjoy your own life and do what you want without having to spend you money on other people.

And? So what? They key is, as you said, having to spend your money on other people. I don't believe in moral imperatives or forced charity. I prefer my generosity to be voluntary.

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The capitalists are arguing that this is good as it is essentially entrepreneurial which is good for society as a whole. Yet your arguments that say how many people can become millionaires hinge around having to scrimp and save your whole life so you have $1,000,000 when your 67 (giving you around 5 years of happiness!).

1) Are you saying then that everyone should be entitled to be millionaires when they retire, despite how good or bad their planning might've been? Who said achieving that much wealth was supposed to be easy (at least easy for everybody?)

2) What the hell do you mean 5 years of happiness? Is money the only thing that makes a person happy in your eyes? And you're a self-proclaimed socialist? wtf? I'm not rich, but I have a job I enjoy, a family I love, and friends all around me. I'd say I'm quite happy (and fortunate for that matter).

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I therefore don't think your arguments can work only if you can amass $1,000,000 at retirement, it must be in your prime of life for the argument to stand. I would therefore say that whatever wage you are suggesting can earn someone $1,000,000 at retirement by having no life, needs to be adjusted upwards by enough to allow that person to have a very good life as well as being able to become a millionaire...

You're changing your argument to fit your agenda, and you're putting words in our mouths to justify your skepticism.

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Originally posted by Shakka If you really meant $2M then you should've been more specific. However, the examples that several of us gave were quite demonstrative of the power of saving and investing in one's future.

No it's OK I did mean dollars (just a little aside to point out a cultural difference)

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The counter-point to your question would be, in your socialist world, how would a person attain the same amount of savings (And please don't tell me it is the government's job to make sure everyone can retire a millionaire because I've yet to ever see a socialist society where that is anywhere close to the case. Only the political elite seem to achieve that in the socialist world. Every one else is confined to varying levels of mediocrity.)

Well I don't want a socialist world! I've always argued for a mixed economy, with some industries publicly owned, but the majority privately owned. I just think there needs to be more regulation to prevent certain groups amassing wealth, and therefore power, as it is undemocratic and there is little equality (so, my answer would be that they can attain the same amount of savings pretty much the same way they do today, only I'd tax them to buggery!! )

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And? So what? They key is, as you said, having to spend your money on other people. I don't believe in moral imperatives or forced charity. I prefer my generosity to be voluntary.

Yes but that's the whole problem! And to get this thread back on topic (apologies) that is the whole point Obama is trying to make - if people prefer only to give voluntarily then most of them won't. If we paid no taxes, would you willingly give away the same amount as you pay in tax? No way! Yet that money is NEEDED to create the stable society we live in, it's just that people don't realise that. Obama is saying it's fine to pursue your own desires, but you should also care about your fellow man as well

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1) Are you saying then that everyone should be entitled to be millionaires when they retire, despite how good or bad their planning might've been? Who said achieving that much wealth was supposed to be easy (at least easy for everybody?)

The point is not about "millionaires" but the (imo) mistaken belief that everyone can be rich and wealthy. "Millionaires" is just a bench mark, or word for wealthy person, and in this thread we took it mathematically. I don't think you need to be a millionaire to attain the lifestyle I'm referring to, but I don't think that lifestyle is attainable for the vast majority of either of our countries. I am also not disputing that people can't become millionaires because they obviously can, but that's not the point

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2) What the hell do you mean 5 years of happiness?

I mean what's the point of giving up your life so you can have a huge pot of money waiting for you when you retire when in about 5 years you'll either be too senile to know what to do with it or dead. Basically, there didn't seem a lot of point to this example for the reasons it was given (and no, of course money doesn't = happiness, well...)

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You're changing your argument to fit your agenda, and you're putting words in our mouths to justify your skepticism.

No I'm not. It adds nothing to the argument that "everybody" can be wealthy to show how someone can amass a wad of cash to spend over 5 years when you ignore the previous 60 years!