Reply to What is your HHI and how much do you save?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]I don't understand how people are say, in their 40s, with roughly a $200k income (assume didn't earn that the whole time) and have multiple millions of dollars in investments....? Were you able to max 401ks or something from day 1 at age 21?

Even if you max your 401k from age 21, it would take 20+ years to get to "multiple millions" with compounded interest[/quote]

"Were you able to max 401ks or something from day 1 at age 21?"

Married at 23, and then...yes.

"it would take 20+ years to get to "multiple millions" with compounded interest"

Correct. [/quote]

Well dang, hats off to you. Got till my 30s before even starting a 401k or accruing much savings at all (and then.... kids and daycare).[/quote]

This is why 20 somethings need to learn the importance of starting early.  My kid has been maxing their Roth since Age 17 and now out of college, at least 15% into their 401k as well.  They are quickly realizing that if they were to stop "retirement savings" at age 30, they will still have over $4M at retirement.  Obviously they won't stop, but the compounding advantage is HUGE.  Now when they marry and start having kids, they wont have to worry as much about retirement---they can focus on college savings and living life with the kids.  Sure they could have spent it all and not saved, but they are frugal and understand the advantages of early investing.

[/quote]

I love this.

You really think your kids are saving due to virtue and not generational wealth.

When I was 17 I was saving every penny for college tuition.  Worked all through college to pay for tuition, housing, and food. When I was in my early 20s I managed to scrape together a $5k emergency fund living like a pauper. I didn’t have any wiggle room for investments.

Your kids have that money because YOU have money. [/quote]

yes, that is a given that they did not have to spend what they earned in HS/college.  But now they are on their own and still saving.  
I grew up poor and spent summers and college year working to pay for everything.  I still  immediately started saving for retirement once out of college.  Married right out of college and lived off of 1 income and banked the rest via retirement and regular investment vehicles.  WE choose to live frugally to pay off high student loans in 1.5 years and save.  We lived in a decent place but nothing fancy.  WE drove older basic cars for several years.  Our vacations were drive 3-8 hours and stay in a cheap hotel/with friends--we budgeted $1.5K for vacations when we were making $85K.  We did not have family money, we simply made it a priority to save, knowing we would live much nicer in a few years if we paid off debt, and built a 6-9month emergency fund and 20%+ for a downpayment.  If we got raises, 75% went to savings and 25% for spending.  We knew that living frugally in our 20s would lead to having a much nicer lifestyle in our 30s+.  Most recent college grads do NOT do that--they want to live now.  [/quote]

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