The compound growth formula/calculator is one of the most misleading concepts common folks have been indoctrinated with in modern history.
Take a look at the image above. The math just seems so easy.
Wow, in just 10 years, I can turn an annual $20k investment totaling $120k into $198k. It’s like you’d be an idiot not to invest as much as possible, as often and early as possible, so that you could soon be a 401k millionaire, too!
Well… where are they?
All the millionaires, I mean. If this thing worked as intended, the streets would be full of the middle-class wealthy, living a comfortable and happy life.
Instead, most retirees have nothing or close to nothing. And those in the workforce are also far behind- almost universally.
As of September 2021, here are some average and median retirement savings figures for various age groups in the United States:
Ages 20–29:
- Average retirement savings: $11,800
- Median retirement savings: $4,000
Ages 30–39:
- Average retirement savings: $42,400
- Median retirement savings: $16,500
