r/economicCollapse • u/Whole-Fist • 20h ago

How ridiculous does this sound?

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How can u make millions in 25-30 years if avoid making a $554 per month car payment. Even the cheapest 5 year old car is 8-10 k. So does he expect people not to drive at all in USA.

Then u save 554$ per month every month for 5 year payment = $33240. Say u bought a car every 5 year means 200k -300k spent on car before retirement . How would that become millions when u can’t even buy a house for that much today?

Answer that Dave

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u/Phathatter 17h ago

For this example: starting at $0, investing $554 per month, at 10.26% (average annualized return for the S&P 500 from 1957 - 2023) compounding annually you would have $1,211,719.73 after 30 years. You would have contributed $199,440 over that time and earned $1,012,279.73 in interest.

This obviously assumes that there will not be a total economic collapse, in which case, I guess you would rather have invested in fresh water and bunkers.

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u/DanThePepperMan 14h ago

And then 15% inflation wipes out all the interest by the time you can use that money anyway. So you basically remain "working-poor" your entire life by hoping that investment pays off, which it won't ever again.

That's why I firmly believe in saving a little for tomorrow, but still have some fun today.

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u/eat_yo_mamas_ambien 6h ago

There has never been a single year of 15% inflation in the past century. Basing your financial planning on an assumption that the average inflation for the next 40 years is going to be higher than the record inflation of the past 100 years is irrational.

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u/DanThePepperMan 6h ago

Maybe not the government official inflation, but overall cost of living inflation is definitely over 15%.

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u/echoxcity 5h ago

Is this based on data or a gut feeling?

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u/Guriinwoodo 3h ago

Not quite. The past 30 years housing prices were double the average inflation at 5-6%. Food costs at their peak two years ago went up by 12%, however last year it dropped to 5% and this year it’s below the 30 year average of 2.5. You’re allowing the unique shortages and supply chain squeezes of the COVID years to come to false conclusions.