Lifestyle > Train of Thought
The power of Compound Interest, the stock market, and your 401K plan
nibs:
--- Quote from: 7™ on December 25, 2005, 07:22:39 AM ---you mean 135k in cash or untaxed?
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i was actually thinking 135k + taxes, as if it were a salary. so only a fraction of 135k. i'm guessing it's about 100k after taxes. trauma was talking about a 401k, typically with a 401k you put a percentage of your gross salary into the account. so you're taxable income is less, and the money in the 401k account grows faster as you are putting more in upfront. but you still pay taxes on that money when it's withdrawn down the road.
--- Quote ---my father made WAY less money anyways.. 6k a month .. I wouldnt call us poor.
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i'm not saying it's poor. what i'm saying is it is not alot of money. investing for 65 years to get what effectively is 135k is not a big payoff.
Shallow:
--- Quote from: Trauma on December 25, 2005, 09:47:18 AM ---^ I don't think lack of a lower class will ever be a problem, there will always be people ignorant about money who live their entire lives without saving anything, then have to retire penniless. There will always be people who don't work very hard to educate themselves, and are forced to take lower paying jobs. There will always be unfortunate people as well who through no fault of their own have no money.
135 grand a year isn't extremely rich, but having 10 million in a savings account (which he will) IS extremely rich. Remember this is all money the kid himself had nothing to do with, as well. Anything he manages to save or invest or buy in his lifetime will be gravy. With a grandfather like this, I'm sure he'll do JUST FINE.
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I agree, I'm just saying, even if every one did this it wouldn't work. Society would just make it it so 1) the seniors with the 10 mil could never access the whole pot, and 2) everything aimed at them in the market would cost a hell of a lot more.
nibs:
--- Quote from: Shallow on December 26, 2005, 08:40:25 AM ---2) everything aimed at them in the market would cost a hell of a lot more.
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aka "inflation", which is exactly what is going to happen if the u.s. continues with these insane federal budget deficits...
Shallow:
--- Quote from: nibs on December 26, 2005, 09:11:58 AM ---
--- Quote from: Shallow on December 26, 2005, 08:40:25 AM ---2) everything aimed at them in the market would cost a hell of a lot more.
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aka "inflation", which is exactly what is going to happen if the u.s. continues with these insane federal budget deficits...
--- End quote ---
Yeah but if everyone, or even a vast majority of seniors retired with 10 million, then it would be a very extreme inflation, even if only for retirees. Old folks homes and condos would skyrocket, and the people selling to these old timers would be taxed through the ass.
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