Have you ever thought about how long it takes to accumulate a million dollars? Let us run through couple of examples.
Scenario 1 a person that just started a job that pays $50k (The median US income believe it or not, review page 6 of this report), and has $10K of savings and zero debt (dream on). This person saves 20% of his gross (pretax) income every year (not realistic by the way knowing that most Americans carry debts and their savings are depleted). He or she invests what they save in a secure investment that pays consistent 6% interest every year (assuming no crashes). His/her salary increases by 3% yearly and the inflation rate is 2% a year (below 20 year average) . Take a look at how long will it take average Joe/Jennifer, the person you see in the bar, eating out, riding a nice car, going to all sports events, acting like a millionaire, to collect his/her first million dollars.
Scenario 2, Now our subject makes $120k, over twice the median and in the top 10% of income the United States, his money earns 8% a year (super optimistic), and he or she saves 30% of their gross income a year (that is over 50% from take home). You would think this is the life now!!
Even with being in the top 10%, with very aggressive investing ratio, tightening the belt, and no setbacks what so ever, 14 damn years. Despite the depressing time frame, both scenarios are optimistic. Most people do not start fresh, but rather with few tens of thousands of dollars in loans. Most people do not save more that 10% of their gross regardless. Most have house and car payments. Also, kids consume a lot of that money early in life, when it is needed most.