You are probably not vastly different from a millionaire, just someone with less pomp and perhaps pretentiousness than some millionaires may have.
You may even know someone who secretly holds such wealth but feels too embarrassed to make it known.
A billionaire is someone who has the social role of controlling a vast section of society, through private ownership of resources and assets that are needed by others for use.
1 million dollars in net worth is achievable with investments early in life in a 401(k) or other tax deferred retirement fund. ~$300/month starting at age 20 gets you to $1,000,000 which is about 10% of the income of someone making $40k/year. That’s not completely out of reach.
It would take you a lifetime of saving 100% of that ($1,000,000 initial investment + $40k/year), a 10% interest rate (which is ridiculous), and daily compounding to reach $1bil. That is the difference between $1mil and $1bil.
No it absolutely is not achievable for a large portion of the middle class. That’s a ridiculous thing to say. Most people don’t even know how to invest their money early in life and are unlikely to be offered a 401(k) when they’re young either. $300 a month at age 20? How many 20-year-olds could afford to invest $300 a month even if they’re being paid a middle class wage?
Do you know how expensive rent and food are now? This sounds amazingly tone deaf.
cnbc.com/…/middle-class-income-in-major-us-cities… maybe you’re defining the middle class differently than I am. $300/month is 10% of the low end of that income level. 10% of total income is a generally considered a good target for retirement savings.
Again- how many 20-year-olds have $300 a month to invest? How many middle class people in 2023 have 10% of their income to spare? It may be a good target. That doesn’t make it achievable when 62% of Americans are living paycheck-to-paycheck. They don’t have 10%. They don’t have 1%.
As far as any spare income I have? It goes to paying down medical debt.
Yeah it’s unlikely. Saving 1-10% assumes you’re making a livable amount of money with a bit extra, versus living paycheck to paycheck even after cutting all but the most vital expenses. (Ed- and not in significant debt)
Things were a lot different when I was in my 20s compared to now. A single job at an hourly wage used to actually be almost doable.
How many 20-year-olds could afford to invest $300 a month even if they’re being paid a middle class wage?
If you're making median income outside places like LA/NYC/SF and don't have children, it should be pretty affordable.
The place I work at doesn't offer a 401k either (technically I'm self-employed/contract worker, so I do offer myself a 401k), but even if it doesn't and you're not self-employed, IRAs have a $6500/year limit and that's something you just open yourself. And you can just open a brokerage account if you want more. Unfortunately, most people don't know these kinds of things, especially not at 20yo. There's definitely a education gap, which is a serious problem. And few people in their early 20s make the median wage and even if they are making that much, many are still buying lots of basic durable goods like furniture and kitchenware. So using 20 as a starting point is probably a little too optimistic...
If you’re making median income outside places like LA/NYC/SF and don’t have children, it should be pretty affordable.
Did you ignore the fact that a large majority of Americans don’t have any money to invest because they’re living paycheck-to-paycheck? Do you think they all live in those sorts of cities? Wages have been stagnant for decades now. Housing prices, rent and food prices are through the roof everywhere in the country, as is the (always) variable-rate APR on things like car loans. American household debt is $16.9 trillion.
Most people simply do not have money to save or invest. They’re not getting paid enough, essentials are too expensive, and they’re drowning in debt.
I think we should focus on raising the floor vs the ceiling. We should be taxing those who can afford it and using that revenue to help those that need it most. If that means someone like myself has to work a few more taxes to achieve my retirement goal, so be it, but I can’t bring up the low income people of this country on my own. The rich need to pay their fair share, and right now they aren’t and they’re getting tax breaks from Republicans.
Sure. Much of your observations speaks to the more conceptual differences between the millionaire and billionaire with respect to role in society. Workers generate plenty of wealth, more than enough for all to live well.
Billionaires generate no wealth, only hoard the wealth generated by workers.
I think that this is a pretty bad and deceptive way of demonstrating the size comparison. Mainly because only 60 sec go into 1 minute, not 100. Only 60 min go into 1 hour not 100. Only 24 to a day etc.
Still though I agree thet people have a hard time grasoingbthe difference between millions and billions
Why do the ratios of conversion matter at all? The point is that all three of 1 second, 11 days, and 31.5 years are human comprehensible quantities. You can look at those values and actually understand the difference without having to do mental conversions.
Well, because you can see at the result of this meme, that the result is extremely misleading. It is correct but not representative of how much more one billion is compared to a million.
1bill is just 1000 times more than 1mil. The example here makes it look like a lot more.
Instead you could compare 1mil kilograms = 22 Titanic’s where 1bill kilograms = 22000 Titanics. But that is too straight forward and people would not react the same way as they do when you use time instead of a ratio that is representative of the numbers you are trying to compare
What? It is exactly representative. The values are correct and comprehensible. The fact that the numeric orders of magnitude of the units involved don’t progress uniformly is irrelevant. The point is that they are all values that are relatable within normal human experience.
1 kilogram, 22 Titanics, and 22000 Titanics doesn’t help at all. There is no number of Titanics that is is a human relatable quantity.
This is one of the best ways I’ve seen the difference represented. Quick and simple to understand. Way easier than a visual of grains of sand or an infographic, etc
I think people can’t really comprehend this because a long time ago a million was a lot of money. Like, if you had a million in your bank account you were a rich person. Nowadays that means you are just an average person with a little extra money. Heck, in places like San Francisco having a million means you are just scraping by.
That’s… not accurate. The average American family has $62.5k in total across savings, checking, prepaid cards, money market accounts and call deposit accounts. That’s more than an order of magnitude under $1 million. Those households with $1 million dollars in assets (which also includes investments and homes/property) are in the 87th percentile. At $2 million in assets, they’re already in the 95th percentile. You’re not wrong that a million dollar net worth is not what it used to be, but it is still far far far above average.
The bay area/San Francisco does require an inordinate amount of money to be financially comfortable, but that is an outlier, not the norm. Even other major metropolitan areas like Houston don’t require even half as much money for the same financial comfort. In non-urban areas a million dollar net worth would make you among the wealthiest in the area. The context of the environment, house prices and local cost of living play a major factor in one’s relative wealth in a given area. The inequality of those factors in different parts of the country is as great as the wealth inequality in America in general.
For clarity, the scale in difference is the same between a terabyte and a gigabyte as compared to a billion and a million (a factor of 1000). But a gigabyte is not a million bytes and a terabyte is not a billion bytes Kilo = thousand Mega = million Giga = billion Tera = trillion
innumeracy. “Why would it help to have an intuitive understanding of large quantities? You think it would help grasp situations where they’re used or something?”
Think it alludes to things around if you have 5 million dollars you can live off it for the rest of your life. If you have 5 billion dollars you can buy a $500,000 house daily and never use a dollar of your initial 5 billion. (Assuming 5% interest). Creating a forever rich family that no one will ever have to work again. That interest all gets pulled from the lower & middle classes slowly draining them and in truth the 5B owner won’t be buying a new house daily, it will just rack up and maybe they will invest in a few other large companies. Until eventually you get a financial distribution that looks similar to what we have today. And it only gets worse unless you can tax in such a way that the wealth feeds back into those lower classes. A person with 20m dollars isn’t much of an issue. A person with 20b dollars can wreck an economic system over time.
The economic system is set up in such a way that rich eventually are taking food out of the poors mouths by breathing. Or not, in the U.S. we had an official state something along the lines of only a fool pays inheritance tax.
