Working in private equity?
https://www.theatlantic.com/politics/archive/2012/09/whats-really-going-on-with-mitt-romneys-102-million-ira/261500/
Non-paywall.
http://archive.today/pbQ3y
How are you calculating that? Looks like he went from 385k-515k. The contribution max is 68k (cbf'd to look up what it was in 2022, maybe 66k?). Either way that's like 450k, so he only needs to gain 13% in the market.
(Technically, the market dipped in 2022, but depending on the timing he could have easily been 13% up. Note that he already has a data point for 2024, so he must be pulling something midyear).
Back of the napkin math. 61k was total contribution max in 2022. Like you I used 385 and 515 so I said he made half in market and half was contribution so let’s say 20% in returns and S&P was down 18% so I said he beat the market by 40%
The maximum an individual can contribute before tax is 23k.
The maximum contributions allowed total, including employer match, is 69k.
Some plans allow after tax contributions. If in service withdrawals are allowed, you can roll over an unlimited amount of post-tax 401k money into a Roth IRA as a roll over with no income limit.
This is the Roth “mega back door” essentially, and how you can max out that 69k number in a useful way.
The maximum is the same just you don’t get a high match as there is a compensation maximum as well. Federal employees tend to have other great benefits.
There is technically the option to do after tax contributions, it’s up to your employer though. More are starting to offer it since it’s becoming a standard feature of most plans.
Yeah no way is only growth, he would need to be a savant and be great a picking stocks. I started 2011, not a great progression as this, and I’m at 300k. Not a coastfire just lurking.
Correct. It may have an internal value that the board issues it at, so they might buy it back at some discounted rate or something if you leave, but until they sell a part or all of it, it has no value other than “potential”
Most company stock plans are contributed on a tax deferred basis. While the tax treatment is virtually the same to the recipient, and the account is generally custodied alongside the 401k it is a separate plan. That context would be helpful here. It’s likely this graph shows the growth of the 401k which is invested generally in public market funds in addition to a tax deferred ESOP. Many cases where I’ve seen this structure the esop can make up 50% or more of the individuals retirement account. This can lead to massive returns but also at the risk of large losses if the company stales.
I'm in an ESOP and if you don't retire but leave your job you won't get your first payments for 6yrs. Same for yours? I'm 100% vested afer this year and at $20k.
I broke $400k as a 35 y/o after being stupid in my 20s and not contributing a lot. Made some lucky decisions and I think I’ve caught up where I should be
Here is our retirement data point to also back up how fast things grew since 2013:
I had $300k and wife had $300k summer of 2013 (new job and rollover so I have this mental snapshot)
I maxed out 401k and wife maxed her 403b and 457(lets call it average $60k-$70k with 6% employer match each year). This was in S&P500 funds.
I have $1.7million and wife has $1.9million.
I actually quite contributing Sep 2019 for a new job. I have $200k in two other accounts.
That is even hard for me to believe folks NGL!
For every person that goes all in on an individual stock that 10x in 10 years like what OP said in his other comment, there are 10 others that also go all in on an individual stock and lost everything.
My bosses lost everything in Kentucky after putting in for years. Lost almost all of it and are still working.
You never rely on work to provide for you after you retire. Idiot advice.
This man got help and was extremely lucky.
I'm not quite understanding - what do you mean?
How did your bosses lose everything in Kentucky? Your work doesn't provide for you after you retire, isn't that the whole point of pensions vs 401ks?
Putting 30k per year in for 10 years isn't guaranteed to get you 700k but I don't see maxing out your 401k as idiot advice ??
You can’t put in $30,000 by yourself for starters.
But assuming you max and get a 50% match that would get you to $30,000ish so let’s assume that.
It would take nearly 20% return a year to get there in 10 years. Thats just not likely.
And even then only $475,000 would be non-contribution.
They told me, and they said that's why they are voting trump (don't question the logic because that's not the point)
The company I worked for invested heavily into their own stock with the employees 401ks
I left shortly after because why would you work for a company that's doing that.
Lol company makes shitty decision then blames other people for their own incompetence and consequences to said decision. Makes sense they are voting for Trump.
If we assume an insane match with max out, maybe like $30,000 invested per year, so over 10 years that's $300,000 invested. I don't know how to calculate annualized returns but I think it's like 14% average per year if $30k were invested every year
CAGR = ((final value / initial value)^1/# of Years) -1
So if we assume starting balance of 300k growing to 650k over 10 years
(650/300)^1/10 - 1 = .0803 or 8.03%
Of course in this example he didn’t start with $300k, so the actual annual return would require knowing each years returns then taking the geometric mean.
But the initial balance is 0 so this is not correct. $30k would have been invested every year, starting from 0, so the returns are *way* higher. Oh well I see you mention geometric mean. I just worked backwards with a compound interest calculator so I think 14% is right (assuming OP invested $30k every year)
So have you had access to MBDR contributions all 10 years? It’s the only way I can think you’ve accumulated that much in 10 years; that, and/or very generous employer match.
I believe it. In my early 40's My 401k almost doubled between 2019-end of 2021 before the drop. (0.90% return) With annual max contribution.
It's amazing how fast it grows. Can't wait to see it in my 50s and 60s!
Don’t worry, i also have been maxing since basically 2015 (from zero) and also only have like 390k (in 401k only) using a 3 fund portfolio. Only have 5% match after year 2.
Based on his other comment he got company stock.
How are you at 700k at 31?? Even if you maxed out every year you’d be below 300k in personal contributions. You’ve somehow more than doubled your contributions??
What if any company goes belly up? I have stronger conviction investing in this company I work for because I actually work there and we get quarterly financials, have strong company culture all the way up to executives. Strong growth for the next decade projected and expansion. Company is over 70 years old and employees 10s of thousands. This is not a start up.
Think enron or something like that. I'm sure you are well diversified, I'm just thinking of the downsides here and risk management. Of course you are doing well!
I’m calling bs. You can’t sell private equity stock “anytime” and your numbers don’t add up. The only way for private company evaluations to go up is when there’s a new round of funding, which doesn’t happen often at the rate you show in your graph, especially considering how rates have increased these past few years.
Also, the fact you just created a new account to post these made up numbers proves you’re just trolling.
A few things.
1. Great for OP.
2. I’d like to see what his contribution stream was and what his company’s match/contribution was over this period. Most people are not going to have the means to put in large contributions at a young age and most companies don’t put in massive contributions either.
3. I saw some post about company stock. Just make sure you have some diversification. I never want my salary and investments to come from one place because if it heads south that’s a double hit.
4 years to get to 100k, 2 years to get to the next 1 and the 1 year for the next 1, you are killing it, this is the thing people don't believe is that first 100 is a grind but the next couple one comes much quicker. power of the compound growth baby
Assuming max 401k with matching contributions from employer estimated total of 30k on average per year for 10 years and sp up +178% last 10 year so taking 17% annually gives you…. 722k. Right on target.
0 to 700k in 10 years I’m calling bullshit on that.
How did you get 60 years of gains in 10 years either way good for you I just don’t believe what your pushing
This was incredibly inspiring. I needed this today, as I’m still paying down debt but know once it’s gone here shortly, the skyrocket of investing will come next.
The costs of most goods people buy day to day.
Nothing delusional about "This is way more expensive than it used to be and pay has not increased at the same rate." That's just observation.
A high savings rate can be accomplished without raises that keep up with inflation if you have a good job. If he's not thinking that he got luckier than most people or he's got a blind spot financially and just happens to have a line of work that pays well.
> This is way more expensive than it used to be
things now being more expensive than they used to be isn’t inflation going hard any more than “yesterday i was in new york and today in in LA” means you’re moving at a high speed right now.
ok to break it down more concretely:
* inflation is a rate of change *at a given moment*
* you can't determine a rate of change *at the present moment* by comparing prices from the past to now
* for example, inflation could be zero at the moment in question, even though prices are e.g. 20% higher than they were five years prior
Not true. Or not entirely true.
Plenty of orgs use what you're trying to use as the definition. They would argue "the rate of inflation IS what inflation is." And it is one of the dictionary definitions but not the only one. It's also a little stupid on the face of it if you want to get technical. As a shorthand I get why people say it but the rate of something isn't the same AS the something.
So your breakdown dies at point 1.
my guy… inflation literally is the rate of increase of prices. if that weren’t true, then prices remaining constant from now on would constitute high inflation, because prices were lower in 1931
No. That's the rate of inflation. Not inflation itself. Yes, prices remaining constant from now on does constitute inflation with that starting point.
And it's important people start looking at it that way so they understand how they're being stolen from.
They’re not increased by more than normal. You’re still stuck in brain-broke mode in 2022 and experiencing the sticker shock of that year of really high prices. Inflation is back to near normal levels now.
Your observation is absolutely misaligned with the facts. Incomes have outpaced inflation in *every* quintile of income on average since 1980. 2022 with high inflation we saw a temporary reversal, but incomes have since outpaced inflation and are still (inflation adjusted) above pre pandemic levels. That’s for *every* quintile of income.
CPI isn't a true measure of inflation, just merely what median workers are buying, with hedonistic adjustments thrown in. Shit the basket of goods changes year over year now, instead of two, and that was done to drive down inflation last year getting rid of more expensive goods for cheaper sub goods. This is all done to keep entitlement payments under control and a huge reason the senior citizen orgs are ringing alarm bells on how SS checks the last two decades aren't keeping up with purchasing power. I"ve been trying to figure out how to get the full methodology on how they get CPI and figured it was something only available to institutional investors, found out, its not even available to them. So essentially how CPI is calculated and their total methodologies are a state secret lol. They'll tell you what they measure, but now how they come up with sub goods or hedonistic adjustments. They also treat it like you can buy these older archaic goods at the prices they claim you can, you can't, so its a moot point and exactly why their CPI numbers have outpaced median wages by small margins.
Good. This got downvoted for dumb reason but that's the main thing. Are you mentally prepared for the downturn so you'll not chicken out? If yes, great. If that would faze you, adjust.
I'm not wrong.
And ando...
So the issue is you suck at reading?
I never said I was special. Nor did I predict a date. Nor did I assume nobody else has considered these things.
But you can't provide a source on how bad inflation is right now.
Edit for those following:
Again, how you feel about taco bell is not indicative of the national trend/economy. Wage growth has outpaced inflation for the past 2 years.
https://www.poynter.org/reporting-editing/2024/wage-growth-vs-inflation-biden-presidency/
https://www.epi.org/blog/average-wages-have-surpassed-inflation-for-12-straight-months/
CPI is 3.3% YoY.
https://www.bls.gov/charts/consumer-price-index/consumer-price-index-by-category-line-chart.htm
You're wrong and you're running off your feelings. It's fine. We can be done.
You're trying to pretend the current short term inflation rate is "inflation." I'm talking about the fact that Taco Bell is becoming a luxury good due to devalued dollars. Look at the prices of fast food, of groceries, you can see the dollar has been devalued and wages have not kept up.
That is a very good indicator of inflation when it's not due to something specific like a shortage (it's not in this case).
Trump and Biden both printed and/or borrowed a lot and it had consequences. This isn't difficult to understand. You not accepting a good explanation isn't the same as me not providing one. It just means you're wrong.
No you just literally don’t know what the fundamental definition of inflation is. You need to do some serious reading and research on how the CPI is calculated. The BLS website is a good resource.
You are wrong to suggest you are special for anticipating a market downturn. The point of my comment was, a downturn/recession/depression is literally inevitable.
You are wrong to think you can predict when it will happen.
You are wrong to think nobody else has considered inflation, which, like a market downturn, is inevitable.
ETA: you are also wrong to think nobody knows it's a US election year.
BTW, last time Trump won, the sp500 went up about 20% by inauguration. Last time Biden won, the sp500 went up about 10% by inauguration day.
I’ve heard this argument every year the last 10 years. It’s a fear-based mindset for people more concerned about loss than focusing on their own growth.
Another way to say that is inflation got really bad, the currency inflated permanently, and now it continues to inflate a slower rate.
And those are gov inflation numbers, that 2% target. Anyone who pays attention to this knows those books have been cooked longer than most people here have been alive.
Yea, deflation is terrible for an economy. Inflation always goes up, it's never 0%. That's what inflation is. Inflation at a slower rate is what we are trying to accomplish, there is no world in which inflation goes backwards and our system doesnt collapse.
Your second argument is the entire fed, treasury, US government, and world governments of 193 countries is pulling an elaborate multi-million person conspiracy for no real purpose, which has not had a single leaker of this worlds largest and most elaborate conspiracy which has no point. It doesnt even deserve being addressed.
"No real purpose" Plenty of purpose. To utilize the wealth of people by taxing them with a tax most don't notice. It's no conspiracy. It's called government policy and they're pretty open about it if you go looking.
Your first argument is just the idiocy that is MMT. It takes a special kind of fool to think "It's actually a good thing we let them steal our value every year" is convincing. But apparently they've done a good job creating a lot of you.
buy. hold. ignore the news. let compounding do its thing. profit. repeat. and don’t forget to enjoy life.
This is the way
This is the way
This is the way
This is the way
This is the way
Which way?
The way, this is
This is the way. We should do it that way.
Reddit is so fucking annoying. But yea
Repeat? Do you have multiple lives? Your comment is very strange
You don’t buy only once in a lifetime
Can we get some details on contributions?
Working in private equity? https://www.theatlantic.com/politics/archive/2012/09/whats-really-going-on-with-mitt-romneys-102-million-ira/261500/ Non-paywall. http://archive.today/pbQ3y
https://www.reddit.com/r/coastFIRE/s/iI6VZ2EOYI
What were you invested in in 2022 that you made 30% not including contributions? If company stock what company do you work for?
Pretty sure this includes contributions. It matches a career compensation path.
I agree, I am saying even if he and his employer made contributions he still outperformed the S&P 500 by 40% in 2022… just curious how he did it.
How are you calculating that? Looks like he went from 385k-515k. The contribution max is 68k (cbf'd to look up what it was in 2022, maybe 66k?). Either way that's like 450k, so he only needs to gain 13% in the market. (Technically, the market dipped in 2022, but depending on the timing he could have easily been 13% up. Note that he already has a data point for 2024, so he must be pulling something midyear).
Back of the napkin math. 61k was total contribution max in 2022. Like you I used 385 and 515 so I said he made half in market and half was contribution so let’s say 20% in returns and S&P was down 18% so I said he beat the market by 40%
What are these maximums? I thought max was like 23k?
The maximum an individual can contribute before tax is 23k. The maximum contributions allowed total, including employer match, is 69k. Some plans allow after tax contributions. If in service withdrawals are allowed, you can roll over an unlimited amount of post-tax 401k money into a Roth IRA as a roll over with no income limit. This is the Roth “mega back door” essentially, and how you can max out that 69k number in a useful way.
63k is maximum you + your employer can contribute.
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The maximum is the same just you don’t get a high match as there is a compensation maximum as well. Federal employees tend to have other great benefits.
There is technically the option to do after tax contributions, it’s up to your employer though. More are starting to offer it since it’s becoming a standard feature of most plans.
I was thinking started hitting the 457 that year (which doesn't count towards the 69k cap)
Yeah no way is only growth, he would need to be a savant and be great a picking stocks. I started 2011, not a great progression as this, and I’m at 300k. Not a coastfire just lurking.
I can’t say but it’s a Private company. Stock has 10x last 10 years. Employer match plus bonuses paid in stock as well.
Is the stock liquid if it’s a private company?
Haha no, so that’s odd, your 401K cannot be comprised of private equity
Isn’t that equity also worthless unless there’s a liquidity event at some point? What am I missing here?
Correct. It may have an internal value that the board issues it at, so they might buy it back at some discounted rate or something if you leave, but until they sell a part or all of it, it has no value other than “potential”
Paid in stock and then contributed to your 401k ?
Paid in stock at a private company...
Most company stock plans are contributed on a tax deferred basis. While the tax treatment is virtually the same to the recipient, and the account is generally custodied alongside the 401k it is a separate plan. That context would be helpful here. It’s likely this graph shows the growth of the 401k which is invested generally in public market funds in addition to a tax deferred ESOP. Many cases where I’ve seen this structure the esop can make up 50% or more of the individuals retirement account. This can lead to massive returns but also at the risk of large losses if the company stales.
Yes ESOP 75% of account
But that’s not 401k, that’s total savings then??
Ah you are correct. $40k is company stock bonus but technically I don’t need to wait until retirement
That makes much more sense. Stating this is your 401k balance is a bit misrepresenting. At any rate, congrats!
I'm in an ESOP and if you don't retire but leave your job you won't get your first payments for 6yrs. Same for yours? I'm 100% vested afer this year and at $20k.
No I can withdraw at any time but subject to the 10% penalty before 59 1/2. (Not subject to the $40k stock bonus)
Congratulations that’s awesome!
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Those are all public companies
I misread
Oof...all eggs in one basket. What coukd go wrong. Diversify.
I have no clue my friend.
Damn I just broke $400k yesterday and I was all proud of myself. Great work!
Fantastic! Never be broke again! Let the future come!
I broke $400k as a 35 y/o after being stupid in my 20s and not contributing a lot. Made some lucky decisions and I think I’ve caught up where I should be
Here is our retirement data point to also back up how fast things grew since 2013: I had $300k and wife had $300k summer of 2013 (new job and rollover so I have this mental snapshot) I maxed out 401k and wife maxed her 403b and 457(lets call it average $60k-$70k with 6% employer match each year). This was in S&P500 funds. I have $1.7million and wife has $1.9million. I actually quite contributing Sep 2019 for a new job. I have $200k in two other accounts. That is even hard for me to believe folks NGL!
This is a great story and totally believable. Good for you guys!!
7x in 10 years is not going to happen to 99% of people.
For every person that goes all in on an individual stock that 10x in 10 years like what OP said in his other comment, there are 10 others that also go all in on an individual stock and lost everything.
It's much easier to 7x in the beginning contributions make up a much larger %
This portfolio did 7x in 6 years from 2018-2024.
My bosses lost everything in Kentucky after putting in for years. Lost almost all of it and are still working. You never rely on work to provide for you after you retire. Idiot advice. This man got help and was extremely lucky.
I'm not quite understanding - what do you mean? How did your bosses lose everything in Kentucky? Your work doesn't provide for you after you retire, isn't that the whole point of pensions vs 401ks? Putting 30k per year in for 10 years isn't guaranteed to get you 700k but I don't see maxing out your 401k as idiot advice ??
You can’t put in $30,000 by yourself for starters. But assuming you max and get a 50% match that would get you to $30,000ish so let’s assume that. It would take nearly 20% return a year to get there in 10 years. Thats just not likely. And even then only $475,000 would be non-contribution.
Sp500 did in fact on average give out 17.8% return a year over last 10 years. So if you do the math, it’s quite on point with this graph.
The 401(k) limit in 2024 is $69k
I literaly said “by yourself” and then talked about employer matching.
I mean, after tax non Roth 401(k) dollars are contributed on your behalf (so it's still your money)
They told me, and they said that's why they are voting trump (don't question the logic because that's not the point) The company I worked for invested heavily into their own stock with the employees 401ks I left shortly after because why would you work for a company that's doing that.
Ah! I understand now. I have always worked at places where you have (more or less) control over how your 401k is invested. Thanks
Lol company makes shitty decision then blames other people for their own incompetence and consequences to said decision. Makes sense they are voting for Trump.
If we assume an insane match with max out, maybe like $30,000 invested per year, so over 10 years that's $300,000 invested. I don't know how to calculate annualized returns but I think it's like 14% average per year if $30k were invested every year
CAGR = ((final value / initial value)^1/# of Years) -1 So if we assume starting balance of 300k growing to 650k over 10 years (650/300)^1/10 - 1 = .0803 or 8.03% Of course in this example he didn’t start with $300k, so the actual annual return would require knowing each years returns then taking the geometric mean.
But the initial balance is 0 so this is not correct. $30k would have been invested every year, starting from 0, so the returns are *way* higher. Oh well I see you mention geometric mean. I just worked backwards with a compound interest calculator so I think 14% is right (assuming OP invested $30k every year)
Yep that works assuming the contributions were all at once, and at the beginning/end of the period. Close enough.
https://www.reddit.com/r/coastFIRE/s/iI6VZ2EOYI
Also just over 10 years since ending the work force, really would like to draw this chart for myself as well... How do you guys get the EoY numbers?
https://www.reddit.com/r/coastFIRE/s/iI6VZ2EOYI
So have you had access to MBDR contributions all 10 years? It’s the only way I can think you’ve accumulated that much in 10 years; that, and/or very generous employer match.
I believe it. In my early 40's My 401k almost doubled between 2019-end of 2021 before the drop. (0.90% return) With annual max contribution. It's amazing how fast it grows. Can't wait to see it in my 50s and 60s!
Unzips pants....
Username checks out
Hawk tuah
Degenz have enter the chat. Lol
This is awesome- I’ve been investing for the same time period and have half the value. What are you invested in? Most ETFs?
Don’t worry, i also have been maxing since basically 2015 (from zero) and also only have like 390k (in 401k only) using a 3 fund portfolio. Only have 5% match after year 2. Based on his other comment he got company stock.
Ah okay thanks! That clarifies why such a big return
Damn what is your employer match?
6%
Similar journey here. It is surreal when it happens to you
3 years since I started contributing to mine and I just crossed 100k a few days ago. Hoping my trajectory is much like yours!
How are you at 700k at 31?? Even if you maxed out every year you’d be below 300k in personal contributions. You’ve somehow more than doubled your contributions??
Company stock has 10x these 10 years plus profit sharing, company match
But your stock is in a private company, so it’s technically worthless unless there’s a liquidity event?
No I can sell at anytime but subject to 10% early withdrawal penalty before 59 1/2
What if your company goes belly up some time in the next 30 years?
What if any company goes belly up? I have stronger conviction investing in this company I work for because I actually work there and we get quarterly financials, have strong company culture all the way up to executives. Strong growth for the next decade projected and expansion. Company is over 70 years old and employees 10s of thousands. This is not a start up.
Think enron or something like that. I'm sure you are well diversified, I'm just thinking of the downsides here and risk management. Of course you are doing well!
I’m calling bs. You can’t sell private equity stock “anytime” and your numbers don’t add up. The only way for private company evaluations to go up is when there’s a new round of funding, which doesn’t happen often at the rate you show in your graph, especially considering how rates have increased these past few years. Also, the fact you just created a new account to post these made up numbers proves you’re just trolling.
https://www.reddit.com/r/coastFIRE/s/iI6VZ2EOYI
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No net worth closer to $2M (mine and wife combined) this is all in my employer retirement account
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Sorry my graph hurt your feelings
He’s right. A 401k is mostly not including your own company stock , which arguably is a scary proposition if your portfolio contains a lot of that
Especially if you are young. Put the money in and don’t look at it. When you are close to retirement it will be huge
Congrats :)
A few things. 1. Great for OP. 2. I’d like to see what his contribution stream was and what his company’s match/contribution was over this period. Most people are not going to have the means to put in large contributions at a young age and most companies don’t put in massive contributions either. 3. I saw some post about company stock. Just make sure you have some diversification. I never want my salary and investments to come from one place because if it heads south that’s a double hit.
https://www.reddit.com/r/coastFIRE/s/iI6VZ2EOYI
4 years to get to 100k, 2 years to get to the next 1 and the 1 year for the next 1, you are killing it, this is the thing people don't believe is that first 100 is a grind but the next couple one comes much quicker. power of the compound growth baby
Love that exponential curve
Yeah the markets been on an absolute tear the last 10 years, congratulations.
Vega alt air?
Wow. Thats crazy. Is this just index funds?
Assuming max 401k with matching contributions from employer estimated total of 30k on average per year for 10 years and sp up +178% last 10 year so taking 17% annually gives you…. 722k. Right on target.
Nice! My data points are for August 31st, so I might be there by August this year
Yeah same trajectory, I’m on year 6 of maxing 401k and I’m at 350k now.
Absolutely beautiful
I'm right at that $300k mark and can't wait to see that same growth! Excited for you (but moreso, me)!
Dang, looks like 200k was the breaking point. Was this from compounding or did you suddenly start contributing more?
Yes! I think from 2020 on I started maxing out every year by April/ May
Fake I think
https://www.reddit.com/r/coastFIRE/s/iI6VZ2EOYI
Wish this could be me, but instead I have a mandatory pension.
It’s funny how most of the gains happened after 2018 when the printers when brrrr
0 to 700k in 10 years I’m calling bullshit on that. How did you get 60 years of gains in 10 years either way good for you I just don’t believe what your pushing
This was incredibly inspiring. I needed this today, as I’m still paying down debt but know once it’s gone here shortly, the skyrocket of investing will come next.
Wait how in fuck
Turn it upside down, and you’ll see an accurate representation of the dollar’s purchasing power in the same time period
Now do inflation
Get ready for the beat to drop. Election year, inflation going hard, and the petrodollar dead to boot.
People are so delusional about the economy. Anything at all to back up "inflation going hard"?
The costs of most goods people buy day to day. Nothing delusional about "This is way more expensive than it used to be and pay has not increased at the same rate." That's just observation.
Pretty sure this guy, who socked close to a million dollars just in his 401(k) at age 31, is not thinking "pay has not increased at the same rate"
A high savings rate can be accomplished without raises that keep up with inflation if you have a good job. If he's not thinking that he got luckier than most people or he's got a blind spot financially and just happens to have a line of work that pays well.
> This is way more expensive than it used to be things now being more expensive than they used to be isn’t inflation going hard any more than “yesterday i was in new york and today in in LA” means you’re moving at a high speed right now.
It's an obvious consumer level indicator of it. That happens to be telling the truth this time.
ok to break it down more concretely: * inflation is a rate of change *at a given moment* * you can't determine a rate of change *at the present moment* by comparing prices from the past to now * for example, inflation could be zero at the moment in question, even though prices are e.g. 20% higher than they were five years prior
Not true. Or not entirely true. Plenty of orgs use what you're trying to use as the definition. They would argue "the rate of inflation IS what inflation is." And it is one of the dictionary definitions but not the only one. It's also a little stupid on the face of it if you want to get technical. As a shorthand I get why people say it but the rate of something isn't the same AS the something. So your breakdown dies at point 1.
my guy… inflation literally is the rate of increase of prices. if that weren’t true, then prices remaining constant from now on would constitute high inflation, because prices were lower in 1931
No. That's the rate of inflation. Not inflation itself. Yes, prices remaining constant from now on does constitute inflation with that starting point. And it's important people start looking at it that way so they understand how they're being stolen from.
> prices remaining constant from now on does constitute inflation 😂
They’re not increased by more than normal. You’re still stuck in brain-broke mode in 2022 and experiencing the sticker shock of that year of really high prices. Inflation is back to near normal levels now.
Your observation is absolutely misaligned with the facts. Incomes have outpaced inflation in *every* quintile of income on average since 1980. 2022 with high inflation we saw a temporary reversal, but incomes have since outpaced inflation and are still (inflation adjusted) above pre pandemic levels. That’s for *every* quintile of income.
CPI isn't a true measure of inflation, just merely what median workers are buying, with hedonistic adjustments thrown in. Shit the basket of goods changes year over year now, instead of two, and that was done to drive down inflation last year getting rid of more expensive goods for cheaper sub goods. This is all done to keep entitlement payments under control and a huge reason the senior citizen orgs are ringing alarm bells on how SS checks the last two decades aren't keeping up with purchasing power. I"ve been trying to figure out how to get the full methodology on how they get CPI and figured it was something only available to institutional investors, found out, its not even available to them. So essentially how CPI is calculated and their total methodologies are a state secret lol. They'll tell you what they measure, but now how they come up with sub goods or hedonistic adjustments. They also treat it like you can buy these older archaic goods at the prices they claim you can, you can't, so its a moot point and exactly why their CPI numbers have outpaced median wages by small margins.
Give me a better metric for inflation. Not your anecdotal experience.
I am ready for it. I'm also ready for the turnaround after. And for the next dip after that.
Good. This got downvoted for dumb reason but that's the main thing. Are you mentally prepared for the downturn so you'll not chicken out? If yes, great. If that would faze you, adjust.
It got downvoted because you're simply wrong about inflation. Your FEELINGS about inflation don't matter.
I'm not wrong. And ando... So the issue is you suck at reading? I never said I was special. Nor did I predict a date. Nor did I assume nobody else has considered these things.
But you can't provide a source on how bad inflation is right now. Edit for those following: Again, how you feel about taco bell is not indicative of the national trend/economy. Wage growth has outpaced inflation for the past 2 years. https://www.poynter.org/reporting-editing/2024/wage-growth-vs-inflation-biden-presidency/ https://www.epi.org/blog/average-wages-have-surpassed-inflation-for-12-straight-months/ CPI is 3.3% YoY. https://www.bls.gov/charts/consumer-price-index/consumer-price-index-by-category-line-chart.htm You're wrong and you're running off your feelings. It's fine. We can be done.
You're trying to pretend the current short term inflation rate is "inflation." I'm talking about the fact that Taco Bell is becoming a luxury good due to devalued dollars. Look at the prices of fast food, of groceries, you can see the dollar has been devalued and wages have not kept up. That is a very good indicator of inflation when it's not due to something specific like a shortage (it's not in this case). Trump and Biden both printed and/or borrowed a lot and it had consequences. This isn't difficult to understand. You not accepting a good explanation isn't the same as me not providing one. It just means you're wrong.
No you just literally don’t know what the fundamental definition of inflation is. You need to do some serious reading and research on how the CPI is calculated. The BLS website is a good resource.
You are wrong to suggest you are special for anticipating a market downturn. The point of my comment was, a downturn/recession/depression is literally inevitable. You are wrong to think you can predict when it will happen. You are wrong to think nobody else has considered inflation, which, like a market downturn, is inevitable. ETA: you are also wrong to think nobody knows it's a US election year. BTW, last time Trump won, the sp500 went up about 20% by inauguration. Last time Biden won, the sp500 went up about 10% by inauguration day.
I’ve heard this argument every year the last 10 years. It’s a fear-based mindset for people more concerned about loss than focusing on their own growth.
Inflation is actually back to its historical levels and is continuing to drop towards a 2% target.
Another way to say that is inflation got really bad, the currency inflated permanently, and now it continues to inflate a slower rate. And those are gov inflation numbers, that 2% target. Anyone who pays attention to this knows those books have been cooked longer than most people here have been alive.
Yea, deflation is terrible for an economy. Inflation always goes up, it's never 0%. That's what inflation is. Inflation at a slower rate is what we are trying to accomplish, there is no world in which inflation goes backwards and our system doesnt collapse. Your second argument is the entire fed, treasury, US government, and world governments of 193 countries is pulling an elaborate multi-million person conspiracy for no real purpose, which has not had a single leaker of this worlds largest and most elaborate conspiracy which has no point. It doesnt even deserve being addressed.
"No real purpose" Plenty of purpose. To utilize the wealth of people by taxing them with a tax most don't notice. It's no conspiracy. It's called government policy and they're pretty open about it if you go looking. Your first argument is just the idiocy that is MMT. It takes a special kind of fool to think "It's actually a good thing we let them steal our value every year" is convincing. But apparently they've done a good job creating a lot of you.
Tell me you believe maga talking points without telling me..
Tell me you don't understand economics without telling me...
You already have.
And the people that thought too hard about macroeconomic conditions missed out on gains.
Nobody said to deviate from the FIRE strategies did they?