Hi Guys,
I have been investing into the realestate market for over 15 years and also started investing in index funds over the last few years since discovering MMM and other similar financial blogs. In Australia people (and books I read) used to say that property doubles every 7-10 years (what a bunch of bullshit, non of my properties have done this).
All the financial books I have ready and blogs and financial superstars like Mr Buffett all say to invest in index funds such as Vanguard. My basic understanding is that 'the market' will produce goods and services that people will buy/use and 'the market' will keep pumping out dividends/profits over the long run. This cycle will not end but still a part of me questions,
Is achieving FI really as simple as:
Spend less than you earn, invest the difference in index funds.
If it is so simple then why aren't more people at least not broke at old age? If it is so simple then why isn't everyone who works 40+ years FI or close to it?
Here in America, I have been astounded at how many working people
1.) Don't know what a 401K is or just simply don't even invest in it. I even met someone in one of my meetup groups who said, don't invest in a 401K. I was like, I 100% disagree with a capital D and I hope no one here takes this advice. Your employer is giving you free money for contributing, you get the tax advantage and it grows without you even thinking about it. I know a lot of my family members barely check theirs.
2.)This is not just a 401K. My sister has ignored her debts until I knocked some sense into her. I told her, wake up and realize you are 27 and time is one of your biggest assets. Made her get a credit check, log in to mint and start buckling down. Not everyone has a family member to nag them to get their shit together.
3.) Everyone here has family. Let's face it, are all your family members living within their means? I for one know someone who earns in the six figure range but like the average American is living paycheck to paycheck.
4.) Lastly, from my work place, people drive luxury cars and even advertise how they don't save because "live for today." Cars, shoes and everything else seems to matter. I am not opposed to luxury like a lot of mustachians, but for me it's the income to buy it. IF you were making $1,000,000 a year, of course a Tesla is nothing to you, but if you are making $70,000. Well...
Also being a millennial, other than this site, I have yet to meet other millennials who are frugal. There is a guy I work with who is not frugal, hmm not even really money conscious but he knows about this site. It's funny he recommended it and I was like "I've been on that site for two years!"