Just let your wealth compound over time and you’ll be a millionaire, the advice goes. If this is true why aren’t more people rich?UNDERSTAND, SHARE & PUSH BACK
This doesn’t need to be a 20 minute video.
While money in a bank does technically grow exponentially, the real value (what you can buy with that money) of the account grows slower than the economy.
Meaning each year you can actually buy less with the money you keep in a bank account. This is why retirement accounts are typically tied to the stock market, to try to tie their growth more to the economy.
partial_accumen@lemmy.world 1 month ago
Most of the video applies to a Millennial and younger audience. These generations got screwed on the necessary components for compounding to work. Forced to pay for exponentially more expensive education than generations prior put them deep into debt right out of the gate. Further, they entered the workforce during the Great Recession which forever put them 10 to 15 years behind in earning power. Lastly, saddled with the two other things, it prevented many from buying homes which appreciate in value.
In short, the younger generations got totally screwed. The compound interest promise still works for X-ers and above.
I agree with the very ending premise: We need to massively tax the ultrawealthy.
jonne@infosec.pub 1 month ago
He’s talking about his grandparents ending up at 0 or below as well. Whatever we manage to save before retirement isn’t adequate to pay for elder care (unless you’re lucky enough to drop dead randomly), and most of us can’t build generational wealth to pass on. Basically the wealthy will end up buying whatever assets you have accrued over your lifetime.